Haven'tGotAScooby

You'd like to see my family and thousands like mine having to put their children through the trauma of losing the safety and security of the family home?...shame on you.

pslewis

I did not say that - and you should not say things like that while hiding behind an alias account!

Although I am fully aware that you are attempting to draw me into a statement you can infract upon ...........you should have, with all due respect, have bought within your means and then you would have no worries ..... you are singularly responsible for your financial choices.

kingofturds

iTrader: (1)

On the other hand it would be nice to be able to get on the property ladder 190k for a 2 bedroomed house, when my maximum mortgage is 140k means I am stuck renting

new2scoobs

I'd like to see that, I'd also like to see all the other people who acted in such an imprudent manner get the same treatment.

It's called 'sowing as you reap' although it doesn't seem to be all that fashionable of a concept in the 'naughties'.

GC8WRX

Im with you mate, house prices are ridicolous and the only people who will say otherwise are people who are mortgaged up to the hilt, and cant go out cos they owe 1,000 a month for a three bed semi!

Petem95

I dont think it really makes too much difference which way they tweak interest rates.

Inflation is rising, so they cant cut rates much, and with consumer spending and house prices down sharply they cant rise much.

However either way you look at it the economy is screwed - WAY too much debt which has resulted in massively over-inflated house prices, consumer spending boom on easy credit and MEW'ing to fund lots of things that people cant really afford, but the illusion of wealth makes them think they can.

All this when the economy is doing well - now we are on the downwards slope, and things could potentially turn very nasty.

I think crashing house prices should be the least of peoples worries to be honest.

Suresh

I have a vision of you sitting in a dimly-lit room, you typing furiously hunched over your ash-covered keyboard with a ciggy hanging out of the side of your mouth. Am I right?

How long have you been predicting doom fella and what's your hit rate on those predictions so far this decade?

Petem95

It's been inevitable for some time, and now it seems its happening! Jump out of a plane at a unknown height into a dark sky, and sooner or later you'll hit the ground!

I just hope the pound holds out long enough for me to get out the country and move to Oz, Switzerland or NZ, which I plan to do within 2-3 years!

Chip Sengravy

Couldn't agree more. I work on the ignorance is bliss ethos, and it's served me well.

lpski1

thank dog for Pete, what would we do without him

if only we all knew as much as him, his head is full of hindsight and i think we should all take a farking big note, everyone is so easy to write him off, tsk tsk.

fast bloke

Pete - Can I give you some bad news - At some stage in the future you will be dead. Now you have two options - Live like you are already dead, or continue to live like you aren't quite dead yet. Why do you choose to live like you are already dead? Make todays decisions based on todays information. Don't make todays decisions based on what will happen at some indeterminate point in the future

lozgti

Like the B of E

pslewis

Just seen a mention this morning that house prices, adjusted for inflation, passed their 1989 peak in 2002 ...... since then they have risen 50%.

Now, taking a logical view of this, there were certain things which destroyed the market in late 1989 .... the end of multiple MIRAS and high Interest Rates - as well as a lack of confidence and over pricing.

So, a fall of 50% I would not expect - but a 30% drop over the next 4 years should not be considered an impossibilty ..... I saw plenty of people sticking their heads in the sand in 1989 - it's all happening again, but more and more people are talking of a massive correction in house values.

T4molie

I'd agree with both of you Bought my house about 6 1/2 years ago approx 110k... couple bought the place next door to us which is near identical altho mine is better They paid approx 190k - I said to the Mrs at the time that there's no way I'd pay that much for a place the same as ours!!

House prices = way over the top....

Andy

Mitchy260

Doesn't neccessarly mean you are stuck renting. You could opt for an interest only mortgage in order to afford it. The property would be yours, you wouldn't be wasting money and you would have an investment.

If you buy a house on the intent of actually living in it, the growth of the property by the end of the mortgage term should be enough and more to pay off your original capital.

Too many people are in the housing market to make a quick buck, rather than to buy a house and live in that house 10-20 years.

You do have options, renting in my opinion is the wrong one as at the end of the day when you're 65 and dont have a property or an income (apart from pension) where are you going to live? The landlord will still be wanting his rent. You will have paid hundreds and thousands in rent, but its dead money.
At least by having you're own property, you're paying into it every month and in effect, its a little savings account. At the end, you get all your mortgage payments back by having a house worth 3-4x its initial bought value and no mortgage to pay on it after 25yrs. Renting you get absoloutly zilch.

The way i see it anyway, any house is better than no house. Rent should only be a short term solution and waiting on the housing market crashing, well thats a very risky gamble.

fast bloke

If you go interest only, at what point is the house paid off?

Mitchy260

The same as it would be on a repayment mortgage, at the end of the term. Be it 20 yrs, 25 yrs?

Chip Sengravy

My old man paid 25K for his house in 1980, now worth about 350. He would have only have to save 5K a year for the last 5 years of his term to pay it off.

fast bloke

Oh dear - I hope you don't have an interest only mortgage and have a belief that one day it will simply disappear.

On a repayment mortgage, you pay the interest every month and a small chunk of capital. Eventually all the small chunks of capital add up to the amount that you borrowed.
On an interest only mortgage, you pay only the interest every month. The amount that you borrowed remains the same - forever. It is cheaper in the short term because you do not pay the small chunk of capital they you do in a repayment mortgage.

TopBanana

Worth mentioning that the amount of money reduces in real terms because of inflation.

fast bloke

It works OK providing you have high wage inflation for some period of the mortgage, as long as you are aware that you will have the entire debt to pay at some stage

Chip Sengravy

No, I don't believe it will dissapear. What do you think I is; Stupid? . I have IO, and put aside what would be going into paying the capital on a repayment into an account that offsets against what I am paying on the IO.

Some months I can put a bit more in, some months a bit less. I can't have that flexibility with standard repayment.

Leslie

It even reached 17% under Callaghan's government Pete-bet that hurt too!

This is a panic move in an effort to make people borrow more and make the economy appear to look strong. Our economy is built on borrowing which is a dangerous state to be in. Government borrowing over recent years is the highest ever and no one has yet explained why Flash was forced to sell half of our gold reserves at a rock bottom price losing us over £2 billion..

Why was that Pete?

Too much to hope for an answer from you though!

Les

fast bloke

Sorry - my posts was directed at Mitchy260, who seems to think it will disappear.

You could look at a fully flexible mortgage with an overpayment/borrow back facility. The main difference is that you have to pay tax on the interest from your savings, while you don't have to pay tax on the interest saved from your borrowing.

Haven'tGotAScooby

I think at the moment we are in the best case scenario for the housing market.

House prices dropping..which will enable more people to get on the ladder.

Interest rates have a generally downward trend in the near future...meaning current home owners won't be too stretched.

Also, the FTSE 100 is currently over 6500 and unemployment rate steady around 5%.

Even if unemployment does start to rise, a high proportion of immigrants in this country to work will bugger off to somewhere with better job prospects and restore the balance over here.

Or should I trade in these specs' for something a little less rosy?

Gear Head

iTrader: (2)

Change your specs!

Mitchy260

Dont know where you read in my post that i would think it would dissapear I'm struggling to find where you may have interpreted that from?

I said i'd rather have an interest only mortgage than none at all and renting.

The growth from the house in a 25yr term should/would be enough to pay off the original capital. In my parents case, £35000 mortgage, house now worth £350,000. Increased by 10x its value since 1992. They haven't paid a penny of the original £35000 yet and have a mortgage of something daft like £125 a month. Less than what they pay per month for council tax.

fast bloke

But you say it will be paid off in the same time as a repayment mortgage. It won't, unless you change to repayment at some stage or save up the money, or sell the house and downsize

Mitchy260

Mis interpretation

Yes the original capital will still be there, but the growth in the house should cover this 1 off payment. Of course, yes you would need to downscale and release some capital, or set aside an endownment to cover it