No, I don't take any statistic at face value. It's far too easy to misrepresent or manipulate. Collection methods, starting assumptions etc can all alter the validity of the data or the way it should be intepreted.
House prices..
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No, I don't take any statistic at face value. It's far too easy to misrepresent or manipulate. Collection methods, starting assumptions etc can all alter the validity of the data or the way it should be intepreted.
Great article from The Telegraph today, shows bank forecasts for what they are.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/19/bcnhouse219.xml
This backwards thinking is a problem - also illustrated by Dolph clinging to "...still show annual growth rather than decline...". We need to look at the past, *think*, then arrive at a forecast of the future. The Telegraph recognises how the lenders are failing on the *think* stage, at least in what they publish.
Soldato
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Just sold our house and got 75k more than we payed for it, so im happy.
Soldato
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Congrats. How long have you owned it though? Betcha it's more than a year!
15 years more than a year lol
But your new home you buy will also have increased the same proportion. So the gain is negated.
But your new home you buy will also have increased the same proportion. So the gain is negated.
Unless the prices continue to fall and he buys in say 6months time.
And thats exactly the kind of thought that causing this recession. As soon as there is a perceived drop in house prices, people will be raring to buy. This is just a temporary lull manufactured by the media.
Do you really believe that's ALL it is?
lol - thats all i have to say.
They might be ready to buy but will the banks be ready to lend, and will those people wanting to buy have enough deposit to satisfy the lenders? With inflation and bills shooting through the roof, I'd expect that saving (nevermind paying a mortgage) as a FTB will be much harder for those on average wages.
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Soldato
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Even if he had a previous 100% interest only mortgage (which is unlikely) he would have a £75k deposit.
Nonsense.
You are right that once prices have fallen by a certain amount then there will be more people who think it's a financially good investment to buy a house again.
But at the moment a lot of people cannot afford to buy a house because they cannot get a mortgage sufficient enough to afford what they want.
This hasn't been manufactured by the media, it has been caused because banks aren't lending as money as cheaply and as freely as they used to.
It was the fact that credit (mortgages) were cheap and easy to come by that led to such a huge rise in the first place. Just about every man and his dog was able to 'afford' a house, because banks would give them whatever they needed to be able to buy it (100% mortgage or even 110%) and the interest rates were relatively low as well.
Now it is much harder for people to borrow the money needed to buy a house and so a lot more people have been forced out of the market. This has led to the drop in prices we are now seeing.
Of course there is a bit of a 'panic' factor created by the media now that it has started, but it was always going to happen eventually - as banks relied upon cheap lending to keep bringing new buyers into the housing market and keep pushing prices up. Whilst prices were gonig up, the banks weren't really taking any risks, because, if anyone defaulted on payments they could recoup their losses by selling the property.
But now that banks have had to tighten up their lending, there is no longer an easy and relatively cheap way for a lot of people to start joining the housing market (at the bottom). This means that house prices start to fall, which in turn means that banks get even more cautious about who they lend to, which means even less credit for many people, which means less demand in the housing market, which means more falling prices.
Urm... that's not the way the housing market works. Not in this country during the previous crashes or other markets that have crashed. People don't see a small fall, think 'yey' and buy. They see a falling market and back well away until they think it's stopped falling. Hence it always takes several years to go from peak to trough.
Soldato
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There is a drop i prices, Im not raring to buy though, buy then watch your 80% mortgage turn into a 100% one? No thanks.
Thanks media all the same
Soldato
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This is like burying your head in the sand and pretending it's not happening.
The Nationwide and Halifax are saying prices are falling and will continue. The Bank of England expects houses to continue to fall and the economy to slow further. Even the Government expect prices to fall by up to 11% this year.
I'm not hearing anybody speculating another boom or recovery just yet.
Wishfull thinking, mainly because you bought a house less than a year ago?
Soldato
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That would be top of the market then. Unfortunately probably worth less today.
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I have to say surely this really only affects people who are trying to sell?
I'm not denying that readily available credit is to blame - 'cos it is. It's the whole buy it now, pay later attitude that's caused the mess(as I understand it?), that and sub-prime mortgage lending.
If I was to get a mortgage for £150,000 and over the next 12 months the value of my property declined to less than that - yes there'd be an issue - but surely it would only be a real issue if I was trying to sell? That probably makes no sense.
After 25 years when that mortgage is paid off - the property is mine to do with as I please.. and lets be serious, prices arent going to fall for ever...
I'm not denying that readily available credit is to blame - 'cos it is. It's the whole buy it now, pay later attitude that's caused the mess(as I understand it?), that and sub-prime mortgage lending.
If I was to get a mortgage for £150,000 and over the next 12 months the value of my property declined to less than that - yes there'd be an issue - but surely it would only be a real issue if I was trying to sell? That probably makes no sense.
After 25 years when that mortgage is paid off - the property is mine to do with as I please.. and lets be serious, prices arent going to fall for ever...
Sure. But why buy today for £150k when you could buy the same place for £135k in a years time? Or buy a better house for the same £150k in a years time. Sure it only 'matters' if you are trying to sell, but losing £15k (10% of £150k) is still losing £15k. The argument that it's okay to buy at the top of the market assuming you'll stay put for a decade or more is rubbish - it's still better not to buy at the top.