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Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.Thinking of selling up but what about Brexit?
Comments
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If you buy a house and that house increases it does not mean you borrow more. if you pay off some of that mortgage because the rates reduce then yes someone can have a smaller mortgage... That has nothing to do with prices...
Well if your house price increases, and you want to realise that gain, someone ( a buyer) has to have a bigger mortgage than you had? The banks are tightening, the interest rates are going up, Trump is going to cause bond market volatility, the property bubble is going to burst, just stop fighting it, embrace it, run towards the light!0 -
Crashy_Time wrote: »Well if your house price increases, and you want to realise that gain, someone ( a buyer) has to have a bigger mortgage than you had? The banks are tightening, the interest rates are going up, Trump is going to cause bond market volatility, the property bubble is going to burst, just stop fighting it, embrace it, run towards the light!
How many people do that? Maybe before the crash not now... Mortgage interest rates really are not going up, they are going down.. Trump might be a bit of a loony and have an effect on the world but you have to understand he can't just do what he wants, just like in the uk the prime minster has to get things through parliament, this filters the insanity.
I don't doubt there will be a crash...... At some point, you would be fool hardy to ignore history that tells us a crash will happen sooner or later but saying a crash is imminent with flaky logic does not make you right... You have been saying there will be an imminent crash for years, a broken clock is right twice a day, keep peddling the same rubbish for long enough and im sure eventually you will be "Right".
I almost followed the "light" as you say 13yrs ago, thankfully I ran the other way and have done very well, Hows your rented bedsit?0 -
How many people do that? Maybe before the crash not now... Mortgage interest rates really are not going up, they are going down.. Trump might be a bit of a loony and have an effect on the world but you have to understand he can't just do what he wants, just like in the uk the prime minster has to get things through parliament, this filters the insanity.
I don't doubt there will be a crash...... At some point, you would be fool hardy to ignore history that tells us a crash will happen sooner or later but saying a crash is imminent with flaky logic does not make you right... You have been saying there will be an imminent crash for years, a broken clock is right twice a day, keep peddling the same rubbish for long enough and im sure eventually you will be "Right".
I almost followed the "light" as you say 13yrs ago, thankfully I ran the other way and have done very well, Hows your rented bedsit?
The point you miss, or ignore, is that a few years ago the central banks were COORDINATING their efforts, now they seem to be out for themselves, that is a MASSIVE difference if you are dabbling in holding large debts.0 -
OK Crashy, two basic principles for you:
There is a direct correlation between rent fees and mortgage interest rates. Rates go up, so do rents. Unmortgaged properties then usually raise price in line with "going rate"
Investment in property should be viewed exclusively as long term. If you are in the market long enough, you can ride out any hitches (as many now have in the wake on 2008 crash)0 -
armchaireconomist wrote: »OK Crashy, two basic principles for you:
There is a direct correlation between rent fees and mortgage interest rates. Rates go up, so do rents. Unmortgaged properties then usually raise price in line with "going rate"
Investment in property should be viewed exclusively as long term. If you are in the market long enough, you can ride out any hitches (as many now have in the wake on 2008 crash)
So reading your first point it seems you would agree that I`m correct in saying rents have gone nowhere in over ten years? However your basic point might have been valid in the 80`s and 90`s, maybe even into the 2000`s, but not now, people are too stretched to take much in the way of rent rises and as wages stay put and housing benefit is further cut landlords will learn to take less.
I don`t agree with your second point, you don`t want to be trapped in a highly illiquid asset for years hoping for gains at some ill defined point in the future (fine if you WANT to stay put for years maybe) better to try that strategy with global equity trackers where you can take gains almost instantly and either rent cheaply or buy the cheapest property you can after a bust. (which would have happened in 2008 but for massive central bank intervention. The next property bust will be all the greater because of this intervention IMO)0 -
By that logic crashy, the vast majority of landlords in England would be charging rent at a lower rate than their mortgage payments. They don't just decide "well, people can't afford to pay that much so i'll not bother"... these are directly correlated.
It's not as illiquid asset though is it? It's a home. You still need somewhere to live. You can pay X mortgage, of which you get Y in equity back (minus interest), or you can pay X mortgage, gain nothing of Y back in equity PLUS a profit margin for the landlord. All that for the benefit of more flexibility and insecurity. That's before we talk about that rent is indefinite, whereas mortgage is fixed term.
FYI I do have global equity trackers, as well as having spent around £5k and added £15k value conservatively in value in the last 2 years. As well as having a nice home. As well as having security. I've no plans to move for a while, why do I care if the market crashes? It will have beyond recovered by the time I plan on leaving. Only difference is I will get a return on my money, as opposed to lining the pockets of a landlord.0 -
armchaireconomist wrote: »By that logic crashy, the vast majority of landlords in England would be charging rent at a lower rate than their mortgage payments. They don't just decide "well, people can't afford to pay that much so i'll not bother"... these are directly correlated.
It's not as illiquid asset though is it? It's a home. You still need somewhere to live. You can pay X mortgage, of which you get Y in equity back (minus interest), or you can pay X mortgage, gain nothing of Y back in equity PLUS a profit margin for the landlord. All that for the benefit of more flexibility and insecurity. That's before we talk about that rent is indefinite, whereas mortgage is fixed term.
FYI I do have global equity trackers, as well as having spent around £5k and added £15k value conservatively in value in the last 2 years. As well as having a nice home. As well as having security. I've no plans to move for a while, why do I care if the market crashes? It will have beyond recovered by the time I plan on leaving. Only difference is I will get a return on my money, as opposed to lining the pockets of a landlord.
No, most landlords will take as much rent as the wages/type of tenant in their area will allow, that is just good business sense, although a few may go under the market rent to get long term tenants, but your point was that rents go UP when rates go up, and that is different from saying that landlords would charge rock bottom rent because of rock bottom interest rates, plus it hasn`t been tested in over ten years, so what is the basis for your assertion?0 -
armchaireconomist wrote: »By that logic crashy, the vast majority of landlords in England would be charging rent at a lower rate than their mortgage payments. They don't just decide "well, people can't afford to pay that much so i'll not bother"... these are directly correlated.
It's not as illiquid asset though is it? It's a home. You still need somewhere to live. You can pay X mortgage, of which you get Y in equity back (minus interest), or you can pay X mortgage, gain nothing of Y back in equity PLUS a profit margin for the landlord. All that for the benefit of more flexibility and insecurity. That's before we talk about that rent is indefinite, whereas mortgage is fixed term.
FYI I do have global equity trackers, as well as having spent around £5k and added £15k value conservatively in value in the last 2 years. As well as having a nice home. As well as having security. I've no plans to move for a while, why do I care if the market crashes? It will have beyond recovered by the time I plan on leaving. Only difference is I will get a return on my money, as opposed to lining the pockets of a landlord.
You need to re-think your definitions of Liquid and Illiquid IMO, many people have been treating housing like a cash deposit account, with very high interest rates, that approach is going to come unstuck pretty soon (it already has actually)0 -
Crashy,
On what planet is charging rent below mortgage repayment rates good business sense? They are intrinsically linked.
Also nobody said it was a liquid asset. In the long term however, it is almost always substantially cheaper to buy a house, not to mention the additional security. You made a mistake in the 90s, just accept it. Spending your time plaguing a forum with your irrational and nonsensical drivel isn't going to change that.0 -
armchaireconomist wrote: »Crashy,
On what planet is charging rent below mortgage repayment rates good business sense? They are intrinsically linked.
Also nobody said it was a liquid asset. In the long term however, it is almost always substantially cheaper to buy a house, not to mention the additional security. You made a mistake in the 90s, just accept it. Spending your time plaguing a forum with your irrational and nonsensical drivel isn't going to change that.
That is the reason many BTL landlords will sell up, or try to, when rates rise, and you said "It's not as illiquid asset though is it? It's a home." Or did you mean "Not as illiquid as you might think"? Many people have been assuming that their home is also a liquid asset (with a high fixed or rising price) that will be a costly mistake for many IMO.0
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