Isn't anybody tired of hearing the same old

gabyjane

I use lots of other sites and many of them for the quotes make it easier to read if the colours are different..i apologise if this is not the norm, hadn't really thought about it tbh..i find sometimes the text just blends into each other somtimes if not? anyway i will stick with black if that's the case!

WTF?_2

EdInvestor wrote: »

Because house prices are a function of how much people can afford, and that is based on how much they can borrow, which is based on how much they have saved plus how big their salaries are.

The more time goes by, the bigger the deposit they will be able to save and the higher their salaries will become, thus the more affordable the property and the less likely there will be any crash.

Er savings are at an all time low, borrowing is at a long-time high and one of the biggest sectors for mortgages were 100% LTV (or higher!) loans. Now, those high LTV loans have disappeared and even getting a mortgage with a decent deposit and a good credit history is getting tough and expensive......

.....good to see your posts follow a consistent track record for accuracy. Consistency is very important in investing, I hear.

trudiha

gabyjane wrote: »

Danny I am very happy, i have a good job, lovely (affordable)house, good social life etc it's everyone else that moans!!

I genuinely pleased for you and hope that things stay exactly like that forever but don't you ever get a bit, I don't know quite how to phrase it...uncomfortable about the social consequences of the property boom on those less fortunate than ourselves?

There has been a woman posting about her experiences of trying to find a home for herself and her disabled son in the Home Counties, I think she's called BlueMonkey. She can't afford anywhere to rent and even if she could her son's condition makes it impossible.

There is a thread running currently about a young woman about to be made homeless, she is classed as a 'vulnerable person' and her local authority don't seem to be in a position to help.

If you have a look on the mortgage board there is story after story from people who through changes in circumstances can no longer afford to pay their mortgages.

There was even a guy a few months back who posted about not paying his mortgage because his daughter was diagnoses with cancer so his wife stopped working.

Even if you aren't going to personally become a victim to over inflated house prices, can you not see that having to step over all of these people in the streets in going to impact a little on your enjoyment of your home?

Sisyphus

teabelly wrote: »

There is only less money for lending while the credit crunch is still going on . Once the liquidity returns then lending levels will return and house prices will carry on rising as other reasons will keep demand higher than supply. There are plenty of people that still can afford to buy. The market no longer depends on FTBs, there are plenty of investors willing and able to jump in their shoes. Now property is considered more of an investment you can bet your last pound that the banks will do anything to make sure property prices are kept high as they'll be up a creak if they don't and they know it. Banks might make some effort to say they are being more fussy to try and counter the moral hazard argument but be certain in a couple of years they'll be lending to anyone with a pulse.

You make it sound like the Credit bubble is the normal status quo to which we will return once those pesky journalists stop talking the market down. How can a person on an average salary afford to buy an average home 10x his earnings without a massive loan? The banks can't borrow enough money for themselves 2% above base rates let alone lend it out on new sub-prime. How long will it take to return to these lending levels? Will the market just stand still in the meantime? Will sellers just queue up and wait in a nice orderly queue? What planet do you live on?

borntobefree

To the op,

There is nothing to be scared of in a falling market.. I sold my first flat for less than I paid for it. My generation all had negative equity in the early 1990s. We don't now though do we? If we'd been scared off by a falling market we'd still be renting. If you had £20k negative equity, or £40k negative equity then - so what? It makes no difference now, does it? Just as whether you have £650k equity now or £200k makes difference either- it's not real.

Interest rates are still low and buying still seems a better deal than paying rent. If my kids were old enough I wouldn't let the current market put me off buying them a flat. Rent is dead money and the market moves up and down, that's just the way it is.

Hope you find a lovely home.:D

Sisyphus

gabyjane wrote: »

Boring 'IF YOUR'E A FTB DON'T BUY NOW'
Anyway my outlook is if you can afford it buy, if not or it's going to stretch you then don't..common sense really..seriously all of you saying wait, people have brains and can decide for themselves wether to go for it or not can't they??

Well duh, those that can decide for themselves wouldn't look for an opinion on a discussion forum that discusses house prices would they now?

WTF?_2

borntobefree wrote: »

There is nothing to be scared of in a falling market.. I sold my first flat for less than I paid for it. My generation all had negative equity in the early 1990s. We don't now though do we? If we'd been scared off by a falling market we'd still be renting. If you had £20k negative equity, or £40k negative equity then - so what? It makes no difference now, does it? Just as whether you have £650k equity now or £200k makes difference either- it's not real.

Interest rates are still low and buying still seems a better deal than paying rent. If my kids were old enough I wouldn't let the current market put me off buying them a flat. Rent is dead money and the market moves up and down, that's just the way it is.

To the OP, who might have been reading the above:

There's nothing to be afraid of in a falling market if you have a lot of equity already in your home. Sure, you'll see your equity go up in smoke and it's bad news if you have to make a forced sale but if you want to trade up then it's cheaper.

The problem is that anyone buying now is likely to find themselves going substantially into negative equity in the coming couple of years. That means no moving house, difficulty getting credit,big losses if you are forced to sell for some reason.

Also the problem with buying now is that houses are phenomenally over-priced and you'll be taking on large amounts of debt at a time when economic slowdown is looming large.

borntobefree wrote: »

Interest rates are still low and buying still seems a better deal than paying rent. If my kids were old enough I wouldn't let the current market put me off buying them a flat.

For most in the UK, buying is most certainly not a better deal than renting (though there was a poster here who lives in the cheapest place in Britain where it is the case). Do the sums and if it turns out your mortgage repayments are lower than rental payments then by all means buy.

borntobefree wrote: »

Rent is dead money and the market moves up and down, that's just the way it is.

Rent is no more dead money than the interest you pay on a mortgage. If mortgage interest is less than rent then it's time to think about a mortgage. Beware of interest free products though as it's a lot like renting but you take on all the responsibilities of ownership of the house as well as paying 'rent'.

teabelly

It doesn't matter whether the person on an average salary can afford the average home. What matters whether there are enough other people ie better paid or investors that can. If someone is buying it doesn't matter who. If rents increase to cover higher mortgages then BTL investors will start soaking up property higher up the price bands rather than concentrating on the cheap stuff at the bottom. After a certain point in income it isn't as critical that certain multiples are maintained assuming all other outgoings are equal as that person will have more cash left per month to service a mortgage compared to someone earning much less on a lower multiple with the same fixed costs. It is still coming back to affordability.

The median average person earns 20k at worst and most people buy with a partner so the average home at 200k is 5x joint average income. Chances are at that level they won't be FTBs and will be second buyers with at least 1x joint salary in equity anyway. As second time buyers income is likely to be higher as they will be older so it will be more like 3.5 times joint income. Days of the sole breadwinner are gone.

It is hard for FTBs but it always has been and always will be. It was hard for me, it was hard for my parents, my friends and everyone else I know that bought. You just learn to deal with it and keep to a tight budget until your wages rise and you are over the hardest first few years. It involves sacrifice and todays young folks just want everything now without having to wait or work for it. People my age aren't always that patient in saving up and doing without either

Turnbull2000

teabelly wrote: »

It is hard for FTBs but it always has been and always will be. It was hard for me, it was hard for my parents, my friends and everyone else I know that bought. You just learn to deal with it and keep to a tight budget until your wages rise and you are over the hardest first few years. It involves sacrifice and todays young folks just want everything now without having to wait or work for it. People my age aren't always that patient in saving up and doing without either

You've been on this forum since 2006 and you come up with that paragraph?

brit1234

Don't buy now, wait and save.

Buy to let investors are getting repossessed at ever greater waits and their mortgages are being pulled fall quicker than residential ones. Buy to let is dead.