House buying risks

SpiderLegs

Crashy_Time said:

mrlegend123 said:

Inflation will continue to increase - Get those rates up!!!
Canada has already pre-warned borrowers to expect higher rates.....
Exciting times for borrowers who have maxed out 

The PTB REALLY want their inflation this time, and seem to be getting it! Covid has really shaken the money masters it seems?
People sitting on big piles of mortgage debt are going to start to feel very uncomfortable if things start moving up.....

People who’ve kept paying their landlord’s mortgage for the last ten years in the hope of some non-existent crash are going to (continue to) feel very uncomfortable if things don’t start moving up...

Sunsaru

SpiderLegs said:

Crashy_Time said:

mrlegend123 said:

Inflation will continue to increase - Get those rates up!!!
Canada has already pre-warned borrowers to expect higher rates.....
Exciting times for borrowers who have maxed out 

The PTB REALLY want their inflation this time, and seem to be getting it! Covid has really shaken the money masters it seems?
People sitting on big piles of mortgage debt are going to start to feel very uncomfortable if things start moving up.....

People who’ve kept paying their landlord’s mortgage for the last ten years in the hope of some non-existent crash are going to (continue to) feel very uncomfortable if things don’t start moving up...

But at least in 25-35 years time they'll get some if not all of their deposit back! So it's not all bad.

mrlegend123

Crashy_Time said:

mrlegend123 said:

Inflation will continue to increase - Get those rates up!!!
Canada has already pre-warned borrowers to expect higher rates.....
Exciting times for borrowers who have maxed out 

The PTB REALLY want their inflation this time, and seem to be getting it! Covid has really shaken the money masters it seems?
People sitting on big piles of mortgage debt are going to start to feel very uncomfortable if things start moving up.....

yes I want inflation - let's embrace it. 

mrlegend123

Mickey666 said:

mrlegend123 said:

Inflation will continue to increase - Get those rates up!!!
Canada has already pre-warned borrowers to expect higher rates.....
Exciting times for borrowers who have maxed out 

. . . and also for retired outright home owners sitting on their pension pots that have seen low growth over recent years.  A bit of inflation might be just the thing to boost their fortunes - both their pensions AND their house prices

pensions will go down due to inflation...... so will house prices. BoE said this week 1% increase in mortgage rates would reduce house prices by up to 11%.

Also, 1% increase in 'REAL' interest rates may reduce asset prices by 20% - BoE report from couple years ago. 

SpiderLegs

Oh how awful. ‘Up to’ 11% off. That would put us back to pre COVID prices. Nightmare.
😱

MobileSaver

mrlegend123 said:

Also, 1% increase in 'REAL' interest rates may reduce asset prices by 20%

When do you think this 1% increase in real interest rates might happen?

mrlegend123 said:

BoE report from couple years ago

That will be the report that concluded "it does not suggest that house prices are likely to move lower" and explains that this would mean "a reversal of a 30 years trend which is unlikely" and there is "little sign" of this happening. Was it that report?

SpiderLegs

MobileSaver said:

mrlegend123 said:

Also, 1% increase in 'REAL' interest rates may reduce asset prices by 20%

When do you think this 1% increase in real interest rates might happen?

mrlegend123 said:

BoE report from couple years ago

That will be the report that concluded "it does not suggest that house prices are likely to move lower" and explains that this would mean "a reversal of a 30 years trend which is unlikely" and there is "little sign" of this happening. Was it that report?

I remember the horror of the last time rates went up. Around 2018, when they skyrocketed by 0.5% and the result was house prices collapsed. Oh no they didn’t they just carried on going up.

Hannimal

Crashy_Time said:

As I said, people shouldn`t have to take in lodgers to be able to afford a house, hopefully people this guy`s age are awake to that fact by now.

what are the options though. Also they literally do not let you buy a house if you cannot afford it without a lodger. the affordability tests are quite stringent.

AnotherJoe

OP, not sure if its come up before but your question is posed in a very one sided way.

What about "NOT buying a house" risks?

Long term, the near certainty of house price inflation pricing you out from EVER being able to buy a house.

Autonomy - do what you want to your house, not be forced to move on account off LL.

More control over how much you pay, since mortgage debt is gradually erased by payments and inflation (eventually to zero)

Cheaper longer term.

getmore4less

AnotherJoe said:

OP, not sure if its come up before but your question is posed in a very one sided way.

What about "NOT buying a house" risks?

Long term, the near certainty of house price inflation pricing you out from EVER being able to buy a house.

Autonomy - do what you want to your house, not be forced to move on account off LL.

More control over how much you pay, since mortgage debt is gradually erased by payments and inflation (eventually to zero)

Cheaper longer term.

the real issue is the OP is not buying the property but have a skewed negative view from what they have said.
So, our son has asked for our advice. He has saved enough for a 20 percent deposit and costs for a £200k home. 

Its the Son that should be posting not his mum. who may be filtering the answers.

IN his position most of the real risks are mitigated away and the long term of paying the same as a rental is going to be much better..