House Price Crash Discussion Thread

Rachman_2

HammersFan wrote: »

Excatly what mess are we in? Employment is at a record high. Interest rates very reasonable and inflation, at worst, 3-4%. even the stockmarket is pretty solid. If we were in a mess I'd concede your point. I guess we might be in a mess at some point in the future. But to say we are in one, when we aren't is just wrong.

I guess you will quote some survey or other back at me....but my parents saved until they were in their 60's to buy a house for cash. They now enjoy a very comfortable retirement as a result.

You are on a wind up right ?

Unemployment is low. True, but there are 10million adults in the UK who derive the majority of their income from benefits other than state pensions. There are 5million people on the long term sick and claiming full time benefits. We have about 2million students (over 18), most of whom are going into serious debt to do joke degrees and come out with a poor quality degree from a crap university and they have quite frankly wasted their time and money. Ther eare about 300,000 people who leave the UK every year - the majority of which are the 'baby boomers', also known as the spenders, the ones with the money. We have 750,000 more non-jobs created in the public sector since 1997 - what do these people do ? We have several million immigrants, the majority of which serve to do no more than keep wage inflation down. Our social security burden is up from £32Bn in 1996 to £82Bn this year- what are we getting for it ? Our debt burden as a nation (personal) has tripled to £1.4trillion in the last decade. Our 'leader' sold our gold at record lows. The stock market is acknowledged to be on the longest sustained bull run in history - what do you think happens after a bull run ?

Your parents paid cash for their house - presumably in their 20's. Imagine doing that now ? Your parents only 'needed' (typically) one income and the average man in the average job could keep a wife and family on his wages and live in a house.

The tax take is up from £180Bn in 1996 to £540Bn this year (projected) - we have budget deficits and our services are not measurably better today than they were a decade ago, we are more reliant on foreign power and resources than ever before, we have inflation (in the real world) that is running at 7-10%.

But it's OK, because Rightmove and the Labour Party say there's no problem and my house earned more than I did last year.

secondtoughest

Rachman, word to your whole post. It's amazing what the public at large swallow.

Just because we can 'obtain' money doesn't mean we have it. It's like FTBs or BTLs who take out a whopping great interest only mortgage and think they're sitting on thousands of pounds worth of money. In fact they're just sitting on debt.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/16/cnhouse116.xml
http://www.guardian.co.uk/money/2007/dec/09/investmentfunds.property
http://money.independent.co.uk/personal_finance/loans_credit/article3255589.ece
http://business.timesonline.co.uk/tol/business/columnists/article3055812.ece

Happy Christmas from the papers... dear oh dear

budget_counsellor_shaz

secondtoughest wrote: »

Rachman, word to your whole post. It's amazing what the public at large swallow.

Just because we can 'obtain' money doesn't mean we have it. It's like FTBs or BTLs who take out a whopping great interest only mortgage and think they're sitting on thousands of pounds worth of money. In fact they're just sitting on debt.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/16/cnhouse116.xml
http://www.guardian.co.uk/money/2007/dec/09/investmentfunds.property
http://money.independent.co.uk/personal_finance/loans_credit/article3255589.ece
http://business.timesonline.co.uk/tol/business/columnists/article3055812.ece

Happy Christmas from the papers... dear oh dear

You can't always believe what you read in the papers......:rolleyes:



But it does make me feel a bit better about not having bought another house yet. We nearly bought in September:eek:

neverdespairgirl

DreamBreaker wrote: »

I will say once more, London is not comparable to the rest of the country and it does sound like you have made the right decison to rent there. It is unusual to find the same case elsewhere in the country though!

Possibly London is different - but you did say it was stupid to rent, not stupid outside London (-:

But it isn't just London either - in mid-Kent, the rural part where my sisters live, renting is quite a bit cheaper than buying as well.

DreamBreaker wrote: »

I would still argue that even though the rent you are paying is by the sounds of it your most sensible option, it is still "dead money". To explain, it is not buying you more than a roof over your head for one month, just as renting a car only buy's you a car to get you from A-B and has to be returned to it's owner in the end, with you getting nothing!

The thing is, there are two parts to a mortgage, as I see it. The first is the interest on the loan, the second is the repayment of the capital. The interest is essentially the same as rent, to my way of thinking, renting the bank's share of the house. So if rent is less than the interest part of the mortgage, you are quids in to rent. You can save the extra money, and the capital repayment part as well.

DreamBreaker

neverdespairgirl wrote: »

Possibly London is different - but you did say it was stupid to rent, not stupid outside London (-:

I never used the word "stupid"! I said I think it is dead money IMO! I also pointed out that in your situation it sounds like you are doing the correct thing. Once again, I don't think anyone is stupid they just have an alternate opinion. If only more people on here could see things that way instead of trying to tear people to peices on this forum. Its a debate not a fight!

neverdespairgirl wrote: »

The thing is, there are two parts to a mortgage, as I see it. The first is the interest on the loan, the second is the repayment of the capital. The interest is essentially the same as rent, to my way of thinking, renting the bank's share of the house. So if rent is less than the interest part of the mortgage, you are quids in to rent. You can save the extra money, and the capital repayment part as well.

I don't disagree I think some people get an interest only mortgage with the wrong intention, they will never be able to afford the repayment mortgage. However, for some people there can be benefits, I have made these points in a previous post so will not write them again, if you want to know what IMO some of the benefits can be then feel free to search for it. Just because I point out the benefits though does not neccessarily mean I believe interest only mortgages are a good thing in every situation.

neverdespairgirl

DreamBreaker wrote: »

I never used the word "stupid"! I said I think it is dead money IMO! I also pointed out that in your situation it sounds like you are doing the correct thing. Once again, I don't think anyone is stupid they just have an alternate opinion. If only more people on here could see things that way instead of trying to tear people to peices on this forum. Its a debate not a fight!

I don't think I've said anything trying to tear you (or anyone else!) to bits, I'm just trying to discuss it.

OTOH, I know someone who lives alone most of the week, her parents come to stay at weekends, in a 6 bedroom, 4 reception house with 90 acres of land, and pays £55 a week in rent. She'd be mad to move out, but then again her landlords are her parents :rotfl:

beingjdc

On this - the cheapest property to buy near my parents, in suburban West Yorkshire is £150k if you don't want to be on the very bad council estate. So an interest-only mortgage would be £750 a month (plus insurance, groundrent as it's a flat, etc).

An identical property to rent is £575 a month.

It's not just London, it's almost everywhere.

DreamBreaker

neverdespairgirl wrote: »

DreamBreaker wrote: »

I never used the word "stupid"! I said I think it is dead money IMO! I also pointed out that in your situation it sounds like you are doing the correct thing. Once again, I don't think anyone is stupid they just have an alternate opinion. If only more people on here could see things that way instead of trying to tear people to peices on this forum. Its a debate not a fight!

I don't think I've said anything trying to tear you (or anyone else!) to bits, I'm just trying to discuss it.

OTOH, I know someone who lives alone most of the week, her parents come to stay at weekends, in a 6 bedroom, 4 reception house with 90 acres of land, and pays £55 a week in rent. She'd be mad to move out, but then again her landlords are her parents :rotfl:

Sorry if I misunderstood you, I just don't like people suggesting I said something I didn't, the reason being people are very quick to bite on these forums, people attack with thing others say I didn't want to be attacked for something I didn't say I have in the past few days experienced and witnessed others who simply cannot have a debate and it "gets my goat". Again if you are just trying to debate then fair enough, my apologies

DreamBreaker

beingjdc wrote: »

On this - the cheapest property to buy near my parents, in suburban West Yorkshire is £150k if you don't want to be on the very bad council estate. So an interest-only mortgage would be £750 a month (plus insurance, groundrent as it's a flat, etc).

An identical property to rent is £575 a month.

It's not just London, it's almost everywhere.

I looked at possible rental properties in the Yorkshire Area and if your talking about a 2 bed town/terrace house then I don't know where your looking but I know many areas where you can get one for £110,000 - £130,000 and these are very good areas!!

Is this for a semi detached property I presume? If so I would say rents are usually charged at at least £650 pcm. Still lower than an interest only mortage granted but not as bigger difference as you are trying to portray

dunnomate

I would put the cash in the bank instead !