what a crazy housing market

Crashy_Time

Thrugelmir said:

mubeye said:

Crashy_Time said:

Flugelhorn said:

just been to see a property - house over 500K, multiple people viewing -at least one offer already in, much work needed, lots of bad DIY and covering up of problems etc - very uninspiring

just wondering how long it will be before the madness stops  and people can take time to consider whether the property is really worth it ?

When mortgage rates rise people`s minds will become very focussed on the amount of debt load they are carrying.

Sure, but they might have paid off a big enough chunk of their mortgage by that point, to not care. 

Mortgage terms have become longer and longer over the past 40 years. Surprising how little capital you repay in the early years of the mortgage. 

Yes, and surprising how few people stop to consider this when buying over-priced flats/houses.

Crashy_Time

getmore4less said:

Thrugelmir said:

mubeye said:

Crashy_Time said:

Flugelhorn said:

just been to see a property - house over 500K, multiple people viewing -at least one offer already in, much work needed, lots of bad DIY and covering up of problems etc - very uninspiring

just wondering how long it will be before the madness stops  and people can take time to consider whether the property is really worth it ?

When mortgage rates rise people`s minds will become very focussed on the amount of debt load they are carrying.

Sure, but they might have paid off a big enough chunk of their mortgage by that point, to not care. 

Mortgage terms have become longer and longer over the past 40 years. Surprising how little capital you repay in the early years of the mortgage. 

Rates are lower so people pay off the debt faster in the early years.

there is a leveling effect.

The problem is that when rates rise you are paying more to maintain the debt as the property value falls, and as lower rates have encouraged people to take on more debt than they probably should have there will be trouble ahead for many if mortgage rates rise.

[Deleted User]

The insanity will never end. Too many people are too invested in the value of their property. A crash back to reasonable prices would put millions in negative equity.

getmore4less

TripleH said:

I was told to get a bid in on a property on the market if I was interested as there were offers on the table.

I wasn't (as I thought it overpriced for the area) and it was still on the market 4 weeks later whenI last checked.

I also agree with Crashy, I think a lot of people might come unstuck if interest rates rise in 5 years time (or so) when mortgage terms are up for renewal. We have always set ourselves a price limit that is capable of accommodating interest rate increases.

Once you agree with crashy its a sign you have lost the plot.

Untill something comes along that really impacts the market prices will generally stay level go up.

Brexit and covid did nothing, and the financial crash was just a small blip.
( crashy missed that one to get back in)

Destresed sellers are a lot rarer than people would like.

There will be regional and local market along with unpopular property that will have bargains but most places will stay as people just hang on if they don't get what they want.

Crashy_Time

[Deleted User] said:

The insanity will never end. Too many people are too invested in the value of their property. A crash back to reasonable prices would put millions in negative equity.

Unfortunately the value is decided by global credit markets, not the people holding the mortgage debt.

lookstraightahead

[Deleted User] said:

The insanity will never end. Too many people are too invested in the value of their property. A crash back to reasonable prices would put millions in negative equity.

Just total greedy chaos. Been in negative equity and also had interest rates sky high. Most don't ever think it will happen to them. 

Crashy_Time

Yes, greedy chaos sums it up I think, and most of the property people are bidding large amounts of debt on isn`t even that special?

MovingSiren

Crashy_Time said:

Flugelhorn said:

just been to see a property - house over 500K, multiple people viewing -at least one offer already in, much work needed, lots of bad DIY and covering up of problems etc - very uninspiring

just wondering how long it will be before the madness stops  and people can take time to consider whether the property is really worth it ?

When mortgage rates rise people`s minds will become very focussed on the amount of debt load they are carrying.

Not if they've fixed for long enough and overpaid through those years as well. Plus even if rates rise and prices stagnate, unless they lose their jobs, the payments should not increase drastically

Slithery

Crashy_Time said:

getmore4less said:

Thrugelmir said:

mubeye said:

Crashy_Time said:

Flugelhorn said:

just been to see a property - house over 500K, multiple people viewing -at least one offer already in, much work needed, lots of bad DIY and covering up of problems etc - very uninspiring

just wondering how long it will be before the madness stops  and people can take time to consider whether the property is really worth it ?

When mortgage rates rise people`s minds will become very focussed on the amount of debt load they are carrying.

Sure, but they might have paid off a big enough chunk of their mortgage by that point, to not care. 

Mortgage terms have become longer and longer over the past 40 years. Surprising how little capital you repay in the early years of the mortgage. 

Rates are lower so people pay off the debt faster in the early years.

there is a leveling effect.

The problem is that when rates rise you are paying more to maintain the debt as the property value falls, and as lower rates have encouraged people to take on more debt than they probably should have there will be trouble ahead for many if mortgage rates rise.

Lenders have had to stress-test customers for increased inflation for years now. If they couldn't afford it they wouldn't have been lent the money.

What makes you think that property prices are going to fall? You've been consistently wrong about this so far.

Scotbot

Slithery said:

Crashy_Time said:

getmore4less said:

Thrugelmir said:

mubeye said:

Crashy_Time said:

Flugelhorn said:

just been to see a property - house over 500K, multiple people viewing -at least one offer already in, much work needed, lots of bad DIY and covering up of problems etc - very uninspiring

just wondering how long it will be before the madness stops  and people can take time to consider whether the property is really worth it ?

When mortgage rates rise people`s minds will become very focussed on the amount of debt load they are carrying.

Sure, but they might have paid off a big enough chunk of their mortgage by that point, to not care. 

Mortgage terms have become longer and longer over the past 40 years. Surprising how little capital you repay in the early years of the mortgage. 

Rates are lower so people pay off the debt faster in the early years.

there is a leveling effect.

The problem is that when rates rise you are paying more to maintain the debt as the property value falls, and as lower rates have encouraged people to take on more debt than they probably should have there will be trouble ahead for many if mortgage rates rise.

What makes you think that property prices are going to fall? You've been consistently wrong about this so far.

Or interest rates rise? BoE is well aware of the level of govt borrowing and the effect a rise would have. Won't happen