House buying risks

Crashy_Time

getmore4less said:

Just seen the parents post, a lot more comfortable than I was thinking.

Why the anxiety about rising mortgage rates then in that case?

MobileSaver

Crashy_Time said:

FreeBear said:

As for voting for a party that would trash the economy to such an extent that the housing market would plummet to a level that even a C_T could afford, not on my watch bud.

High house prices/rents are trashing the economy!

The economy is being "trashed"? And high house prices/rents are the cause?!?!

Any evidence of this or is it just more random stuff that you're making up?

UK economy set to grow at fastest rate in more than 70 years

Mickey666

Crashy_Time said:

Keswick1uk said:

So, our son has asked for our advice. He has saved enough for a 20 percent deposit and costs for a £200k home.  This will likely be a 2 bedroomed terraced place or a 3 that needs work doing, which he is happy to do a room at a time. He can then try and raise a 160k mortgage on his 36k salary. His work is stable.

He currently rents a studio for £550 a month.

This makes me nervous when he asks for advice as to where he might be after a 5 year fix, if interest rates rise. They can double and still be a low rate, but that would make affording the house so expensive,  and will likely cause a reduction in value too and possible negative equity.

These worries stem from us being caught in negative equity and high interest rates in 1990s. 

So, I'm looking for your views on what your advice would be to help temper our experience a bit (or back us up!) Don't mind which it is. 

Rising interest/mortgage rates will reduce the house value yes, because new borrowers won`t get such favourable fixes as your son might get now.

Well that didn't happen in the 80s/90s when interest rates were into double figures and fixed rate mortgages were hard to find.
My first early-80s house increased in price by 44% in three years and the second one increased by about 80% in six years.  My third house increased by 400% over 20 years.

Or perhaps these prices would have risen even faster if interest rates had been around 3% as they are now?

I'm not convinced that interest rates are the main factor in determining house prices.  People need somewhere to live and will the basic options are to rent or buy and, for an equivalent property, buying will always be the cheaper option over the long term.

The bad thing about rising house prices is that they prevent some people from ever being able to afford to buy, which locks them into the more expensive renting option.

So, there are many ways of looking at things but buying a house over 25-ish years is always going to be the cheaper option than renting one for life.  Always has been, always will be.

Crashy_Time

MobileSaver said:

Crashy_Time said:

FreeBear said:

As for voting for a party that would trash the economy to such an extent that the housing market would plummet to a level that even a C_T could afford, not on my watch bud.

High house prices/rents are trashing the economy!

The economy is being "trashed"? And high house prices/rents are the cause?!?!

Any evidence of this or is it just more random stuff that you're making up?

UK economy set to grow at fastest rate in more than 70 years

It just suffered it`s biggest hit in 300 years, LOL. 

Crashy_Time

Mickey666 said:

Crashy_Time said:

Keswick1uk said:

So, our son has asked for our advice. He has saved enough for a 20 percent deposit and costs for a £200k home.  This will likely be a 2 bedroomed terraced place or a 3 that needs work doing, which he is happy to do a room at a time. He can then try and raise a 160k mortgage on his 36k salary. His work is stable.

He currently rents a studio for £550 a month.

This makes me nervous when he asks for advice as to where he might be after a 5 year fix, if interest rates rise. They can double and still be a low rate, but that would make affording the house so expensive,  and will likely cause a reduction in value too and possible negative equity.

These worries stem from us being caught in negative equity and high interest rates in 1990s. 

So, I'm looking for your views on what your advice would be to help temper our experience a bit (or back us up!) Don't mind which it is. 

Rising interest/mortgage rates will reduce the house value yes, because new borrowers won`t get such favourable fixes as your son might get now.

Well that didn't happen in the 80s/90s when interest rates were into double figures and fixed rate mortgages were hard to find.
My first early-80s house increased in price by 44% in three years and the second one increased by about 80% in six years.  My third house increased by 400% over 20 years.

Or perhaps these prices would have risen even faster if interest rates had been around 3% as they are now?

I'm not convinced that interest rates are the main factor in determining house prices.  People need somewhere to live and will the basic options are to rent or buy and, for an equivalent property, buying will always be the cheaper option over the long term.

The bad thing about rising house prices is that they prevent some people from ever being able to afford to buy, which locks them into the more expensive renting option.

So, there are many ways of looking at things but buying a house over 25-ish years is always going to be the cheaper option than renting one for life.  Always has been, always will be.

So nobody that bought property in the mid 80`s suffered any financial loss during the period `89 - `96?

MobileSaver

Crashy_Time said:

MobileSaver said:

Crashy_Time said:

High house prices/rents are trashing the economy!

The economy is being "trashed"? And high house prices/rents are the cause?!?!

Any evidence of this or is it just more random stuff that you're making up?

UK economy set to grow at fastest rate in more than 70 years

It just suffered it`s biggest hit in 300 years, LOL. 

Are you seriously suggesting this "biggest hit in 300 years" was caused by "high house prices/rents" and not caused by one of the worst global pandemics in recent history?!?! Your theories become more absurd by the day.

Regardless, can you share a link to the evidence for this? Perhaps there's a YouTube clip from David Icke that I missed?

Crashy_Time

MobileSaver said:

Crashy_Time said:

MobileSaver said:

Crashy_Time said:

High house prices/rents are trashing the economy!

The economy is being "trashed"? And high house prices/rents are the cause?!?!

Any evidence of this or is it just more random stuff that you're making up?

UK economy set to grow at fastest rate in more than 70 years

It just suffered it`s biggest hit in 300 years, LOL. 

Are you seriously suggesting this "biggest hit in 300 years" was caused by "high house prices/rents" and not caused by one of the worst global pandemics in recent history?!?! Your theories become more absurd by the day.

Regardless, can you share a link to the evidence for this? Perhaps there's a YouTube clip from David Icke that I missed?

High debt levels for housing are a massive drag on social mobility, that this needs to be argued on a moneysaving site is absurd in the extreme IMO!

Crashy_Time

MobileSaver said:

Crashy_Time said:

MobileSaver said:

Crashy_Time said:

High house prices/rents are trashing the economy!

The economy is being "trashed"? And high house prices/rents are the cause?!?!

Any evidence of this or is it just more random stuff that you're making up?

UK economy set to grow at fastest rate in more than 70 years

It just suffered it`s biggest hit in 300 years, LOL. 

Are you seriously suggesting this "biggest hit in 300 years" was caused by "high house prices/rents" and not caused by one of the worst global pandemics in recent history?!?! Your theories become more absurd by the day.

Regardless, can you share a link to the evidence for this? Perhaps there's a YouTube clip from David Icke that I missed?

Obviously I am suggesting that the best "uptick" for 70 years (due to reckless money printing) easily gets swallowed by a 300 year "downturn", think "Moonraker" if you need to visualise it, but looking at the U.S jobs figures I wouldn`t bet on the massive "upswing" just yet (of course the spin is that the recovery has such crazy momentum that they can`t recruit fast enough (or some similar drivel)

MobileSaver

Crashy_Time said:

MobileSaver said:

Are you seriously suggesting this "biggest hit in 300 years" was caused by "high house prices/rents" and not caused by one of the worst global pandemics in recent history?!?!

looking at the U.S jobs figures I wouldn`t bet on the massive "upswing" just yet

Are there any other foreign countries' jobs figures we should be looking at instead of our own?

If the U.S. jobs figures exceed expectations in the coming months then should we all be celebrating boom times ahead or are their jobs figures only relevant when worse than expected?

Keswick1uk

People did lose houses in the mid 90s.
Our house fell from 69k to 48k. Luckily we bought when it was 52k, so didn't have to cover too much loss. Although we still lived on basic rations for 9 months to save it and get another deposit together to move.

When we moved in 1994 most homes we viewed were repossessions. It was very sad times. One had a kitchen ripped out leaving only a standalone oven and a lovely lounge carpet cut right through the middle. Our home here had been on the market for nearly two years, although it wasn't a repossession.  It's hard to imagine today with houses with sea views attracting buyers currently sat waiting.

Thing is many people didn't actually see this as they just lived where they did throughout the whole crisis. One thing I remember vividly though was how the Government didn't step in to help these people at all. And whilst we might like to think they would, the way they are currently treating leaseholders with cladding doesn't inspire me with great hope.