Will there really be a crash?

Thrugelmir

ukcarper wrote: »

But the majority of people don't do that, the vast majority pay off thier mortgage and end up living rent free.

There's a large rump of late 90's early 00's lending that's still on an interest only. Switch to repayment basis is a relatively new requirement. With some 96% of new mortgages being granted on a repayment basis. In the next decade we will see how the historic issues unwind.

lisyloo

There's a large rump of late 90's early 00's lending that's still on an interest only.

I had one until very recently. Just paid it off (actually mine was 2008).

In the next decade we will see how the historic issues unwind.

Yes, we don't actually have any way of knowing how many people have plans and can pay them off and how many don't.
It isn't necesarily a massive problem.

andrewf75

Crashy_Time wrote: »

The point you really don`t seem to get (or want to get) is that buying "Just a home" has become a very expensive and risky endeavour because of financial engineering by the banks

Nowhere near the risk of not buying though. You’ll be paying the same in rent and will have nothing at the end.

ukcarper

Thrugelmir wrote: »

There's a large rump of late 90's early 00's lending that's still on an interest only. Switch to repayment basis is a relatively new requirement. With some 96% of new mortgages being granted on a repayment basis. In the next decade we will see how the historic issues unwind.

I didn't say all and it doesn't mean that all those who did take interest only mortgages will not have paid them off when they retire. Many will have a repayment plan other will have moved by time they retire and be on a repayment mortgage.

Jack_Johnson_the_acorn

The Wirral is booming at the moment. We were considering a detached house recently. 2/3 years ago we could have bought 1 for £190k now they're going for £240k-£280k. Semis were £140k-£170k you'd need £170k-£220k today.

Anything 1/2 decent is snapped up with a couple weeks or less. I think the NW is generally having a mini boom of HPI. Anything left unsold is either in poor condition or in an undesirable area

Crashy_Time

andrewf75 wrote: »

Nowhere near the risk of not buying though. You’ll be paying the same in rent and will have nothing at the end.

Renting cheaply and building a liquid diversified portfolio of equities, bonds and cash etc. will mean you have plenty at the end and in between as well. The key thing is to have multiple years living expenses that cover your lifestyle expenses, whether you pay mortgage, rent or are mortgage free. Borrowing (especially somewhere like London) to buy at the wrong time can be very very costly, as many are now probably finding out, as they will be in negative equity plus have little chance of selling to move etc. IME people who talk about "getting on the ladder" and "getting into BTL" etc. tend to be pretty economically clueless, when the market turns (it already has) they will be rabbits in the headlights most of them.


Unfortunately (for the "get on the ladder" brigade) life is about more than living in fear of not being able to supply shelter for yourself in old age (lets face it, the state is going to do it anyway if people really need it) and many people don`t make it to old age anyway. The key is to understand the power of living within your means, the power of the markets, the power of a regular savings habit, and the power of renting cheaply and ignoring the brainwashing that says debt is good (because you will end up homeless when you are older otherwise :rotfl:) I might buy a house when there is value to be had, and it will be cash, no debt, and if value doesn`t appear I will keep renting and saving and investing

ukcarper

Crashy_Time wrote: »

Renting cheaply and building a liquid diversified portfolio of equities, bonds and cash etc. will mean you have plenty at the end and in between as well. The key thing is to have multiple years living expenses that cover your lifestyle expenses, whether you pay mortgage, rent or are mortgage free. Borrowing (especially somewhere like London) to buy at the wrong time can be very very costly, as many are now probably finding out, as they will be in negative equity plus have little chance of selling to move etc. IME people who talk about "getting on the ladder" and "getting into BTL" etc. tend to be pretty economically clueless, when the market turns (it already has) they will be rabbits in the headlights most of them.


Unfortunately (for the "get on the ladder" brigade) life is about more than living in fear of not being able to supply shelter for yourself in old age (lets face it, the state is going to do it anyway if people really need it) and many people don`t make it to old age anyway. The key is to understand the power of living within your means, the power of the markets, the power of a regular savings habit, and the power of renting cheaply and ignoring the brainwashing that says debt is good (because you will end up homeless when you are older otherwise :rotfl:) I might buy a house when there is value to be had, and it will be cash, no debt, and if value doesn`t appear I will keep renting and saving and investing

I suppose if spend your life renting a bed sit is OK for some but most people want more than that.

Jonbvn

Jack_Johnson_the_acorn wrote: »

The Wirral is booming at the moment. We were considering a detached house recently. 2/3 years ago we could have bought 1 for £190k now they're going for £240k-£280k. Semis were £140k-£170k you'd need £170k-£220k today.

Anything 1/2 decent is snapped up with a couple weeks or less. I think the NW is generally having a mini boom of HPI. Anything left unsold is either in poor condition or in an undesirable area

Evidence suggests the same is happening in Wales (where we live). In our area (Cardiff), I am seeing premium properties flying off the shelves. According to an article in the FT, this is being driven by buyers from London/SE, which I find quite surprising. Interestingly, I am hearing some are working short weeks in London, and telecommuting.

https://www.ft.com/content/df201386-d06f-11e8-9a3c-5d5eac8f1ab4
(behind a paywall)

Is this a re-balancing away from London?

lisyloo

Crashy_Time wrote: »

Renting cheaply and building a liquid diversified portfolio of equities, bonds and cash etc. will mean you have plenty at the end and in between as well. The key thing is to have multiple years living expenses that cover your lifestyle expenses, whether you pay mortgage, rent or are mortgage free. Borrowing (especially somewhere like London) to buy at the wrong time can be very very costly, as many are now probably finding out, as they will be in negative equity plus have little chance of selling to move etc. IME people who talk about "getting on the ladder" and "getting into BTL" etc. tend to be pretty economically clueless, when the market turns (it already has) they will be rabbits in the headlights most of them.


Unfortunately (for the "get on the ladder" brigade) life is about more than living in fear of not being able to supply shelter for yourself in old age (lets face it, the state is going to do it anyway if people really need it) and many people don`t make it to old age anyway. The key is to understand the power of living within your means, the power of the markets, the power of a regular savings habit, and the power of renting cheaply and ignoring the brainwashing that says debt is good (because you will end up homeless when you are older otherwise :rotfl:) I might buy a house when there is value to be had, and it will be cash, no debt, and if value doesn`t appear I will keep renting and saving and investing

If you have a family then renting cheaply is difficult and may be impossible.

If you are Male, able-bodied then getting social housing is nigh on impossible. It a ridiculous strategy to rely on the state if you are fit and well. We don’t provide housing for fit and well people.

I personally have never lived in fear of property prices and that includes the times the paper value was less than the mortgage - yes for the majority negative equity doesn’t affect them.

A certain amount a fear is necessary otherwise we’d all get knocked down by cars, but your fear of commitment is out of proportion.
Do you have a partner BTW?
I’d hazard a guess your fear of commitment extends to relationships, which is why your financial outlook only takes account of one persons needs.

I don’t have kids but I have empathy and understand that most people do. You have no empathy and need to understand that not everyone is a single bloke who can save by living in a dump.

lisyloo

A mortgage can help not hinder other savings/investment.
I’ve been paying £100 per month mortgage for a few years which can enable me to put a five figure sum in my pension and hence hope to be able to retire in my fifties,
There’s not way I’d be able to do that renting even if doing so cheaply becuase it wouldn’t be £100 and it wouldn’t be zero.