Property ‘undervalued’ by 15k... is it fair to ask to meet in the middle?

Crashy_Time

Mickey666 said:

The bounceback from lockdown has been quick because the economy didn't collapse, it was deliberately turned down, ie there were no fundamental underlying problems.

I wouldn't be surprised to see record growth over the coming few quarters because there will be a pent-up demand from  the majority of people exiting lockdown with money to spend, saved up over the past year because they've not been able to go out or on holidays.  Indeed, perhaps many people are already putting those savings towards house deposits, which along with the SDLP holiday, is helping to push up house prices? 

That's why I'd say covid is more of a slowdown than a collapse.  We can debate the degree of either descriptions, but I think we'd agree it's just a 'blip' in the grand scheme of things . . . assuming the vaccine roll-out helps the world get back to normal. 

Apart from the biggest property bubble in history, zero interest rates for too long, Brexit, trade wars etc. etc. ?

Crashy_Time

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

You're a keen advocate of making very low offers because you believe house prices are too high, which most people would regard as being cheeky and shows you're not serious about buying.  But there's always a chance that a cheeky low offer would be accepted, perhaps because of all manner of reasons in the seller's life that you don't know about.  In which case you win, and win big.  Nothing wrong in that.

But the converse is also true.  A seller might believe their house is so special that they put it on the market at a very cheeky high price.  Like you, most people would probably think this shows they are not serious about selling.  But there's always a chance that someone will offer that high price, perhaps because of all manner of reasons in the buyer's life that you don't know about.  In which case the seller wins, and wins big.  Nothing wrong with that either

All true, but if mortgage rates rise there will be less chance of the second one happening as much IMO.

I'm not so sure.  I've had mortgages with interest rates up to 15% (briefly), though mostly in the 8-12% region.  I didn't notice it stifling the housing market then and I'm not convinced it would do so again.

Sure, higher interest rates will mean higher mortgage payments but they do nothing to stem the demand for houses because people will still need somewhere to live.  So all that will happen is that people will have to spend more on their mortgage (or rent) and be forced to cut back on other spending that is not so essential.

Which just means the economy collapses (again) and more people can`t pay their (higher) mortgage. Would you class the late 80`s property price collapse and resulting negative equity nightmare as a "stifled" market? It will only take small rises to mortgage rates now to put a lot of people in trouble IMO, the best bet all round for society is very cheap property for ordinary working people.

I think 'collapse' is a bit dramatic.  The economy is always moving up and down but there has been no real 'collapse' since the 1920s depression.  Not even covid-19, with it's government-enforced lockdowns has caused 'economic collapse'.  A slowdown, yes, but not a collapse.   Much of the negative equity 'nightmare' was a result of the, frankly, stupidity of people borrowing 110% mortgages and relying on rising prices to save them . . . which actually they eventually did, if they could hold on long enough. 

But yes, short term it was a nightmare for those people - but whose fault was it really?  I'm guessing you'd blame the banks, but it takes two to tango.  Irresponsible lending needs an irresponsible borrower.  You can defend such a borrower as not being financially literate, but we're not talking here about someone falling into negative equity because house prices dropped a little, we're talking about people who borrowed themselves into negative equity on day one!

The whole sub-prime lending fiasco could be characterised as borrowing being made so easy that people were not responsible or financially literate enough to see the risks of over-extending themselves or their exposure to markets risks. 

But regardless of who was really to blame, the inevitable response has been the tightening up of borrowing criteria such that in a time of historically low interest rates when it has never been cheaper to have a mortgage, it is now very difficult/impossible to get high LTV mortgages, with all the implications for needing larger deposits, which as we all know affects FTBs the most.

I was talking about the late 80`s property crash, not the 2007 one, I doubt you were paying 15% in the run up to the 2007/8 crash? All historically low rates do are encourage more people to join a debt bubble that will eventually pop.

Mickey666

Crashy_Time said:

Mickey666 said:

The bounceback from lockdown has been quick because the economy didn't collapse, it was deliberately turned down, ie there were no fundamental underlying problems.

I wouldn't be surprised to see record growth over the coming few quarters because there will be a pent-up demand from  the majority of people exiting lockdown with money to spend, saved up over the past year because they've not been able to go out or on holidays.  Indeed, perhaps many people are already putting those savings towards house deposits, which along with the SDLP holiday, is helping to push up house prices? 

That's why I'd say covid is more of a slowdown than a collapse.  We can debate the degree of either descriptions, but I think we'd agree it's just a 'blip' in the grand scheme of things . . . assuming the vaccine roll-out helps the world get back to normal. 

Apart from the biggest property bubble in history, zero interest rates for too long, Brexit, trade wars etc. etc. ?

But are those things 'fundamental problems' or just 'stuff that happens' and the economy deals with it?

Yes of course there will be blips and corrections, things have always been a bit bumpy for as long as I can remember, but I don't detect the imminent fall of capitalism as a consequence.  Most of us have lived through bad economic times - recessions, black monday, collapsed banks, etc and most of us are still here.  Indeed, the people who are best placed to ride out such blips are those outright homeowners who are best able to 'hunker down' and weather the temporary storms that are inevitable from time to time.

Mickey666

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

You're a keen advocate of making very low offers because you believe house prices are too high, which most people would regard as being cheeky and shows you're not serious about buying.  But there's always a chance that a cheeky low offer would be accepted, perhaps because of all manner of reasons in the seller's life that you don't know about.  In which case you win, and win big.  Nothing wrong in that.

But the converse is also true.  A seller might believe their house is so special that they put it on the market at a very cheeky high price.  Like you, most people would probably think this shows they are not serious about selling.  But there's always a chance that someone will offer that high price, perhaps because of all manner of reasons in the buyer's life that you don't know about.  In which case the seller wins, and wins big.  Nothing wrong with that either

All true, but if mortgage rates rise there will be less chance of the second one happening as much IMO.

I'm not so sure.  I've had mortgages with interest rates up to 15% (briefly), though mostly in the 8-12% region.  I didn't notice it stifling the housing market then and I'm not convinced it would do so again.

Sure, higher interest rates will mean higher mortgage payments but they do nothing to stem the demand for houses because people will still need somewhere to live.  So all that will happen is that people will have to spend more on their mortgage (or rent) and be forced to cut back on other spending that is not so essential.

Which just means the economy collapses (again) and more people can`t pay their (higher) mortgage. Would you class the late 80`s property price collapse and resulting negative equity nightmare as a "stifled" market? It will only take small rises to mortgage rates now to put a lot of people in trouble IMO, the best bet all round for society is very cheap property for ordinary working people.

I think 'collapse' is a bit dramatic.  The economy is always moving up and down but there has been no real 'collapse' since the 1920s depression.  Not even covid-19, with it's government-enforced lockdowns has caused 'economic collapse'.  A slowdown, yes, but not a collapse.   Much of the negative equity 'nightmare' was a result of the, frankly, stupidity of people borrowing 110% mortgages and relying on rising prices to save them . . . which actually they eventually did, if they could hold on long enough. 

But yes, short term it was a nightmare for those people - but whose fault was it really?  I'm guessing you'd blame the banks, but it takes two to tango.  Irresponsible lending needs an irresponsible borrower.  You can defend such a borrower as not being financially literate, but we're not talking here about someone falling into negative equity because house prices dropped a little, we're talking about people who borrowed themselves into negative equity on day one!

The whole sub-prime lending fiasco could be characterised as borrowing being made so easy that people were not responsible or financially literate enough to see the risks of over-extending themselves or their exposure to markets risks. 

But regardless of who was really to blame, the inevitable response has been the tightening up of borrowing criteria such that in a time of historically low interest rates when it has never been cheaper to have a mortgage, it is now very difficult/impossible to get high LTV mortgages, with all the implications for needing larger deposits, which as we all know affects FTBs the most.

I was talking about the late 80`s property crash, not the 2007 one, I doubt you were paying 15% in the run up to the 2007/8 crash? All historically low rates do are encourage more people to join a debt bubble that will eventually pop.

OK, but what happened in the 'late 80s property crash'?  I can't remember anything specifically out of the ordinary that could be fairly described as a 'crash', and I'm speaking as someone who moved house in 1986 and then again in 1992, so I think I might have noticed a 'crash'.

Perhaps we need to all agree on a definition for 'crash' in this context.  What percentage reduction of average house prices constitutes a 'crash'?

Here's an interesting thought:

Separating housing fact from fiction

So what is really going on in the UK’s housing market? Let’s start with a very basic statistical observation: there is no period in modern history where house prices have been lower than 20 years earlier.

https://www.investorschronicle.co.uk/shares/2018/10/05/what-s-happening-to-house-prices/

Crashy_Time

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

You're a keen advocate of making very low offers because you believe house prices are too high, which most people would regard as being cheeky and shows you're not serious about buying.  But there's always a chance that a cheeky low offer would be accepted, perhaps because of all manner of reasons in the seller's life that you don't know about.  In which case you win, and win big.  Nothing wrong in that.

But the converse is also true.  A seller might believe their house is so special that they put it on the market at a very cheeky high price.  Like you, most people would probably think this shows they are not serious about selling.  But there's always a chance that someone will offer that high price, perhaps because of all manner of reasons in the buyer's life that you don't know about.  In which case the seller wins, and wins big.  Nothing wrong with that either

All true, but if mortgage rates rise there will be less chance of the second one happening as much IMO.

I'm not so sure.  I've had mortgages with interest rates up to 15% (briefly), though mostly in the 8-12% region.  I didn't notice it stifling the housing market then and I'm not convinced it would do so again.

Sure, higher interest rates will mean higher mortgage payments but they do nothing to stem the demand for houses because people will still need somewhere to live.  So all that will happen is that people will have to spend more on their mortgage (or rent) and be forced to cut back on other spending that is not so essential.

Which just means the economy collapses (again) and more people can`t pay their (higher) mortgage. Would you class the late 80`s property price collapse and resulting negative equity nightmare as a "stifled" market? It will only take small rises to mortgage rates now to put a lot of people in trouble IMO, the best bet all round for society is very cheap property for ordinary working people.

I think 'collapse' is a bit dramatic.  The economy is always moving up and down but there has been no real 'collapse' since the 1920s depression.  Not even covid-19, with it's government-enforced lockdowns has caused 'economic collapse'.  A slowdown, yes, but not a collapse.   Much of the negative equity 'nightmare' was a result of the, frankly, stupidity of people borrowing 110% mortgages and relying on rising prices to save them . . . which actually they eventually did, if they could hold on long enough. 

But yes, short term it was a nightmare for those people - but whose fault was it really?  I'm guessing you'd blame the banks, but it takes two to tango.  Irresponsible lending needs an irresponsible borrower.  You can defend such a borrower as not being financially literate, but we're not talking here about someone falling into negative equity because house prices dropped a little, we're talking about people who borrowed themselves into negative equity on day one!

The whole sub-prime lending fiasco could be characterised as borrowing being made so easy that people were not responsible or financially literate enough to see the risks of over-extending themselves or their exposure to markets risks. 

But regardless of who was really to blame, the inevitable response has been the tightening up of borrowing criteria such that in a time of historically low interest rates when it has never been cheaper to have a mortgage, it is now very difficult/impossible to get high LTV mortgages, with all the implications for needing larger deposits, which as we all know affects FTBs the most.

I was talking about the late 80`s property crash, not the 2007 one, I doubt you were paying 15% in the run up to the 2007/8 crash? All historically low rates do are encourage more people to join a debt bubble that will eventually pop.

OK, but what happened in the 'late 80s property crash'?  I can't remember anything specifically out of the ordinary that could be fairly described as a 'crash', and I'm speaking as someone who moved house in 1986 and then again in 1992, so I think I might have noticed a 'crash'.

Perhaps we need to all agree on a definition for 'crash' in this context.  What percentage reduction of average house prices constitutes a 'crash'?

Here's an interesting thought:

Separating housing fact from fiction

So what is really going on in the UK’s housing market? Let’s start with a very basic statistical observation: there is no period in modern history where house prices have been lower than 20 years earlier.

https://www.investorschronicle.co.uk/shares/2018/10/05/what-s-happening-to-house-prices/

https://www.propertyinvestmentproject.co.uk/property-statistics/house-price-crash-from-the-early-90s/

Some people definitely noticed it, the difference now of course is that far more people are carrying seriously heavy debt loads, that just wasn`t the case for the majority back then, moves on the US ten year yield for example mean an awful lot more for a lot more people nowadays (hence the intense attempts at "curve control" from the CB`s over the last few years)

Crashy_Time

So again I would say, don`t meet in the middle, go for 15 - 20k off if at all possible.

Mickey666

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

You're a keen advocate of making very low offers because you believe house prices are too high, which most people would regard as being cheeky and shows you're not serious about buying.  But there's always a chance that a cheeky low offer would be accepted, perhaps because of all manner of reasons in the seller's life that you don't know about.  In which case you win, and win big.  Nothing wrong in that.

But the converse is also true.  A seller might believe their house is so special that they put it on the market at a very cheeky high price.  Like you, most people would probably think this shows they are not serious about selling.  But there's always a chance that someone will offer that high price, perhaps because of all manner of reasons in the buyer's life that you don't know about.  In which case the seller wins, and wins big.  Nothing wrong with that either

All true, but if mortgage rates rise there will be less chance of the second one happening as much IMO.

I'm not so sure.  I've had mortgages with interest rates up to 15% (briefly), though mostly in the 8-12% region.  I didn't notice it stifling the housing market then and I'm not convinced it would do so again.

Sure, higher interest rates will mean higher mortgage payments but they do nothing to stem the demand for houses because people will still need somewhere to live.  So all that will happen is that people will have to spend more on their mortgage (or rent) and be forced to cut back on other spending that is not so essential.

Which just means the economy collapses (again) and more people can`t pay their (higher) mortgage. Would you class the late 80`s property price collapse and resulting negative equity nightmare as a "stifled" market? It will only take small rises to mortgage rates now to put a lot of people in trouble IMO, the best bet all round for society is very cheap property for ordinary working people.

I think 'collapse' is a bit dramatic.  The economy is always moving up and down but there has been no real 'collapse' since the 1920s depression.  Not even covid-19, with it's government-enforced lockdowns has caused 'economic collapse'.  A slowdown, yes, but not a collapse.   Much of the negative equity 'nightmare' was a result of the, frankly, stupidity of people borrowing 110% mortgages and relying on rising prices to save them . . . which actually they eventually did, if they could hold on long enough. 

But yes, short term it was a nightmare for those people - but whose fault was it really?  I'm guessing you'd blame the banks, but it takes two to tango.  Irresponsible lending needs an irresponsible borrower.  You can defend such a borrower as not being financially literate, but we're not talking here about someone falling into negative equity because house prices dropped a little, we're talking about people who borrowed themselves into negative equity on day one!

The whole sub-prime lending fiasco could be characterised as borrowing being made so easy that people were not responsible or financially literate enough to see the risks of over-extending themselves or their exposure to markets risks. 

But regardless of who was really to blame, the inevitable response has been the tightening up of borrowing criteria such that in a time of historically low interest rates when it has never been cheaper to have a mortgage, it is now very difficult/impossible to get high LTV mortgages, with all the implications for needing larger deposits, which as we all know affects FTBs the most.

I was talking about the late 80`s property crash, not the 2007 one, I doubt you were paying 15% in the run up to the 2007/8 crash? All historically low rates do are encourage more people to join a debt bubble that will eventually pop.

OK, but what happened in the 'late 80s property crash'?  I can't remember anything specifically out of the ordinary that could be fairly described as a 'crash', and I'm speaking as someone who moved house in 1986 and then again in 1992, so I think I might have noticed a 'crash'.

Perhaps we need to all agree on a definition for 'crash' in this context.  What percentage reduction of average house prices constitutes a 'crash'?

Here's an interesting thought:

Separating housing fact from fiction

So what is really going on in the UK’s housing market? Let’s start with a very basic statistical observation: there is no period in modern history where house prices have been lower than 20 years earlier.

https://www.investorschronicle.co.uk/shares/2018/10/05/what-s-happening-to-house-prices/

https://www.propertyinvestmentproject.co.uk/property-statistics/house-price-crash-from-the-early-90s/

Some people definitely noticed it, the difference now of course is that far more people are carrying seriously heavy debt loads, that just wasn`t the case for the majority back then, moves on the US ten year yield for example mean an awful lot more for a lot more people nowadays (hence the intense attempts at "curve control" from the CB`s over the last few years)

I'm sure some people did.  My point is that 10 years later it was largely forgotten and the next doom & gloom story was across all the media . . . which is what sells the newspapers.

Would you mind telling us how old you are?

I'm 63 and while I wouldn't claim to have seen it all I've seen a fair bit and I've lived through all these 'crashes' and recessions you keep talking about, I've twice worked for companies that have gone into administration, and have had numerous mortgages with interest rates up to 15%.  I can now add that I've lived through the unprecedented lockdown of the entire country and you know what . . . we're still blessed with living in a G7 country, geographically tiny though we may be.  So excuse me if I can't quite believe our economy is fundamentally flawed..

I'm sorry that the impending collapse of the housing market (how long have you been predicting it now . . . 7 years is it?) is keeping you awake at night, but I can tell you that I'm sleeping as soundly now as I was through all those previous recessions and crashes that were supposedly going to be the end of life as we knew it.

The markets go up and down all the time.  It's what they do.  Even professional, long-in-the-tooth, hardened economists can't predict things any better than the weather forecasters.  They are good at telling everyone what happened today, not bad about what's going to happen tomorrow, fairly flakey about next week, and just plain guessing (or as good as) about the months ahead.  

Thinking about, perhaps I'm being a bit harsh about taking seven years to predict a house price crash 

Crashy_Time

None of that changes the fact that it is really only super low interest rates that are holding it all up now, the times in the past that you mention were signposts on the journey to this super debt bubble but we can`t really compare the historical with now, for one thing as I stated earlier people are WAY more indebted than at any time in the past and interest rates matter to them a lot now. Sorry to be harsh with you but an economy that needs super low interest rates and new borrowers continually borrowing more than the last borrower for basic shelter is fundamentally flawed. Obviously your age group would be hit hard by a property price correction (especially the "interest only" gang!) but that doesn`t mean it can`t happen, and obviously banks starting to "undervalue" are a clear sign that the market makers believe it is overheated.

Mickey666

Crashy_Time said:

None of that changes the fact that it is really only super low interest rates that are holding it all up now, the times in the past that you mention were signposts on the journey to this super debt bubble but we can`t really compare the historical with now, for one thing as I stated earlier people are WAY more indebted than at any time in the past and interest rates matter to them a lot now. Sorry to be harsh with you but an economy that needs super low interest rates and new borrowers continually borrowing more than the last borrower for basic shelter is fundamentally flawed. Obviously your age group would be hit hard by a property price correction (especially the "interest only" gang!) but that doesn`t mean it can`t happen, and obviously banks starting to "undervalue" are a clear sign that the market makers believe it is overheated.

Throughout all the years I lived with high interest rates (and consequently high inflation), a common complaint was that the economy was in trouble because of the high interest rates and that if only they were reduced then everything would be fine.  Now that interest rates are really low, a common complaint is that they are too low.  Funny old world

As for my age group being hit hard by a property price correction, I think that's unlikely.  For a start, the majority of home owners in the UK are outright owners, ie they have no mortgage, and I suspect that 'my age group' (63) includes most of them.  If the value of my home dropped by 50% tomorrow how would it affect me?  Indeed, if its value doubled tomorrow then how would it affect me?  I would still have my home and my living costs would be unaffected.  Isn't that one of the main attractions of outright home ownership - being independent of such market fluctuations?

You may have mistaken my posts as some sort of campaigning for ever higher house prices and/or being against a house price crash -  but they are nothing of the sort.  True, I do not believe there is going to be a house price crash (for all the many reasons discussed) but I'm honestly not that bothered what happens to house prices because, like all outright homeowners, they no longer affect me.  Thus I'm simply making observations, I'm not hoping for anything in particular.

Crashy_Time

The economy is now in trouble because of the high prices, or it will be when the high rates come back. LOL. U.S yapping about rate hikes today again although I doubt the amount of stimulus Biden is talking will make it through intact.