House Price Crash Discussion Thread

bjm81

pickles110564 wrote: »

But when their mortgage term runs out, they will have paid and bought their own home yet you renters have just poured your money down the drain and helped pay the LL's mortgage off.

It is a sad fact that there are many simpletons like you in this country with the same mindset.

In the long term, buying a property is almost certainly more cost effective than renting. However, stepping on to the 'property ladder' at this point in time is likely to lead to financial hardship. House prices are significantly out of line with any affordability measure you care to choose. Someone buying today will be exposing themselves to a significant loss as the months go by. If they put down a big deposit (say 30%+) then it will be their own money that evaporates before their eyes. If they are more highly leveraged then they will be in negative equity for many years. If they can still afford the repayments and they manage to keep their job during the coming recession then they may be lucky and pull through. Those who got suckered in, taking on the max debt they could afford at the time and now find themselves facing a remortaging payment shock due to the credit crunch are going to find the next few years pretty painful.

Contrast this with someone deciding to rent for the next few years....
It is likely that the rent will be less than the equivalent interest only mortgage payment. The tenant is not exposed to the losses incurred with the depriating value of the house. If a 200k house drops 30% then the tenant will be able to buy the same house in a few years for 140k. He will also have saved more money than the equivalent 'owner' due to the lower rental payments vs owning, no repair costs, buildings insurance etc

renting is not dead money if it does not exceed the equivalent interest only mortgage payment for that value of property (100%LTV). In a rising market it may make sense to buy even if the mortgage is more expensive than renting but in a falling market it is financial suicide.

you believe what the VI press tell you if you want but it will make you poorer. Remember it is in their interest to flog you a house as it = more profit for them. The pending HPC will have a major impact on this country's economy. I dread to think how much of our GDP and employment stems from Brits flogging overpriced hooses to each other! The further house prices decline the deeper the recession this country faces.

I look forward to the day when house prices are a fair multiple of average earnings so honest working folk can afford a house without becoming a mortgage slave to the banks. The current state of affairs is truly disgusting.
Anyone who thinks otherwise must have no children or interest in the future of this country.

wymondham

bjm81 wrote: »

It is a sad fact that there are many simpletons like you in this country with the same mindset.

In the long term, buying a property is almost certainly more cost effective than renting. However, stepping on to the 'property ladder' at this point in time is likely to lead to financial hardship. House prices are significantly out of line with any affordability measure you care to choose. Someone buying today will be exposing themselves to a significant loss as the months go by. If they put down a big deposit (say 30%+) then it will be their own money that evaporates before their eyes. If they are more highly leveraged then they will be in negative equity for many years. If they can still afford the repayments and they manage to keep their job during the coming recession then they may be lucky and pull through. Those who got suckered in, taking on the max debt they could afford at the time and now find themselves facing a remortaging payment shock due to the credit crunch are going to find the next few years pretty painful.

Contrast this with someone deciding to rent for the next few years....
It is likely that the rent will be less than the equivalent interest only mortgage payment. The tenant is not exposed to the losses incurred with the depriating value of the house. If a 200k house drops 30% then the tenant will be able to buy the same house in a few years for 140k. He will also have saved more money than the equivalent 'owner' due to the lower rental payments vs owning, no repair costs, buildings insurance etc

renting is not dead money if it does not exceed the equivalent interest only mortgage payment for that value of property (100%LTV). In a rising market it may make sense to buy even if the mortgage is more expensive than renting but in a falling market it is financial suicide.

you believe what the VI press tell you if you want but it will make you poorer. Remember it is in their interest to flog you a house as it = more profit for them. The pending HPC will have a major impact on this country's economy. I dread to think how much of our GDP and employment stems from Brits flogging overpriced hooses to each other! The further house prices decline the deeper the recession this country faces.

I look forward to the day when house prices are a fair multiple of average earnings so honest working folk can afford a house without becoming a mortgage slave to the banks. The current state of affairs is truly disgusting.
Anyone who thinks otherwise must have no children or interest in the future of this country.

Well said - excellent first post!

frank.hopper

Originally Posted by pickles110564
But when their mortgage term runs out, they will have paid and bought their own home yet you renters have just poured your money down the drain and helped pay the LL's mortgage off.


Yes, bjm81, many good points in your post! very foolish to buy at the present time as you've stated, but you diden't address the last part of pickles post 'pay the LL's mortgage off' pickles is 'an old timer' at the game, ( I believe he is;) given his previous posts ) won't renters, the longer their not buyers, pay off Mr pickles BTL mortages ? if he's capital & interest.

bjm81

frank.hopper wrote: »

Originally Posted by pickles110564
But when their mortgage term runs out, they will have paid and bought their own home yet you renters have just poured your money down the drain and helped pay the LL's mortgage off.


Yes, bjm81, many good points in your post! very foolish to buy at the present time as you've stated, but you diden't address the last part of pickles post 'pay the LL's mortgage off' pickles is 'an old timer' at the game, ( I believe he is;) given his previous posts ) won't renters, the longer their not buyers, pay off Mr pickles BTL mortages ? if he's capital & interest.

Depends when he bought it. If he purchased the property before prices went crazy then the mortgage (capital repayment) will likely be less than the rent so the tenant will be paying off his capital. However, if he bought a property within the last few years then it is unlikely that the rent will cover his mortgage. If the rent is <= interest only then the tenant is not paying off his mortgage!

Anyway, people under 30 cant help being born at a time that has put them at a disadvantage in entering the property market. It is irrelevant whether the tenants rent is paying off his landlords mortgage since this depends on when the landlord purchased the property. You dont need me to tell you that the tenant has no control over this! What is relevant is the cost of renting relative to owning at this point in the cycle and the future short term direction of house prices. Try some real numbers........

I am renting a 4bed detached house for £800/month. The current price for these properties is circa £250k.
repayment mortgage over 25yrs@ 6%= £1630/month
Interest only mortgage @ 6%= £1250/month

The owner purchased this property in 2005 i think for 163k.
Repayment mortgage over 25years @ 6%=£1063/month
Interest only @6% = £815/month

So I reckon that I am £450/month better off by renting and I am not exposed to falling property values. Once the rent comes close to the interest only mortgage then I will consider buying.

As I said in my earlier post, buying beats renting over the long term. Renters and not going to continue renting once property prices fall to level that makes buying a more sensible option.

I struggle to understand why people dont understand the logic I have laid out. I think it is because the population have been brainwashed into thinking property is a one way bet and 'prices only ever go up', 'better buy now before you miss the boat'!!!etc etc. Well the Titanic has sailed and I'm glad I'm not on it.

TT1_3

skap7309 wrote: »

Bit misleading there -
1)I AM a FTB with around a 20% deposit, can i get even close to getting a mortage? Certainly not.
2)With no FTBs desperate for a home but cannot get close to the eye-watering prices (like me and many others on these forums) in the market then no chains can start and the housing market stops literally in its tracks.
3)I wouldnt agree with it being a slow down but a crash is a little harsh, now people are realising the market cannot be saved prices are falling faster than you imagine.

NO ITS NOT! Your post is misleading.

1) I AM also a FTB with around 20% deposit, could i get a mortgage? VERY, VERY easily, i was offed both i applied for. Whats more, i did it at 90% LTV, the banks didn't even know about the other 10%.
You need to tell us your special circumstances as to why you can't get a mortgage, rather than posting as though nobody can get one.
3) Prices are falling but only on certain homes we looked at, the ones where they had to sell for one reason ro another, the rest are sitting tight or taking them off the market.

TT1_3

bjm81 wrote: »

I think it is because the population have been brainwashed into thinking property is a one way bet and 'prices only ever go up', 'better buy now before you miss the boat'!!!etc etc.

So does this statement not make you think property prices won't crash?
Prices start to drop and FTB who couldn't get on the ladder before jump on quickly while they can, so as not to miss the boat?

m00m00

'not to miss the boat'

bull bingo

*MF*

Snapshot of position here:

http://www.hometrack.co.uk/commentary_dashboard.aspx

For me the "mortgage approvals" figure is telling, whether you are selling or buying, the possibility of getting a mortgage (for the majority) will be the key determinant on future prospects.

Lotus-eater

Whats happening round here in the house market.... in one word, nothing.
Property bee shows out of 270 houses around a third have already dropped the price, in the last week, 2 have dropped, one has sold STC and thats it. Estate agents must be fighting each other to get sales. We have 3 estate agents offices to support, approx 9 or 10 agents themselves.

John_Pierpoint

*MF* wrote: »

Snapshot of position here:

http://www.hometrack.co.uk/commentary_dashboard.aspx

For me the "mortgage approvals" figure is telling, whether you are selling or buying, the possibility of getting a mortgage (for the majority) will be the key determinant on future prospects.

Interesting posting.

Anybody know what defines "Sold" on "Hometrack" ?

What is "Basel II" ?