House Prices and the economy - according to the boe

Hades said:
I think rather not say on a forum. I'd never be able to afford it nowadays and even ten years later we still have to make a lot of sacrifices to afford it (no new cars, haven't been on holiday for five years, still can't afford to do much work on the house, etc). Yes there would be some margin after downsizing but the amount I'd be giving away to solicitors and in stamp duty would hurt. A lot. It would be like tipping a years salary down the drain.
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Relocation completely out the question? Seems like such a solid position to be in, though perhaps that's why you don't want to change!
 
Fusion said:
Relocation completely out the question? Seems like such a solid position to be in, though perhaps that's why you don't want to change!
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Yes we could relocate somewhere much further out and that would free up a lot more money. But both our jobs and our children's schools are commutable from here. So it would be a radical change to our lives. My wife's family are near here too so she isn't keen on moving. Money isn't that tight for us to need to do that. Personally if it were just up to me I'd have sold the house and travelled around the world instead :)
 
billysielu said:
This is being investigated atm - in the context of one of the reasons why elderly people don't downsize - so expect the situation to change somehow in the foreseeable future.
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I don't think it is a problem just for the elderly - I think the issue affects further down the age range. I doubt @Hades is at retirement age, if he's thinking about helping children through education, and stamp duty was a big factor in us (45 and 36) not deciding to move earlier this year, as it would have been just under £25,000. Small enough compared to the overall price of the house, but still a massive chunk of money for updating records on the Land Registry, especially when we paid over £10,000 to move a few years earlier.
 
The_Abyss said:
I don't think it is a problem just for the elderly - I think the issue affects further down the age range. I doubt @Hades is at retirement age, [...]
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Yep I didn't mean it was a problem only for them - just that the current investigation into housing for the elderly has highlighted that downsizing doesn't make financial sense.
 
Caged said:
Pretty sure the guy with the house and the income has done the sums on whether it's worth downsizing
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Hey it's almost like this is a discussion, weird huh?

Nothing wrong with asking the question.

I could get a house, but I'd ha e to take a loan out first which beats the point, Hades could probably downsize but the initial outlay would probably mean he's out of pocket for a bit.

Not even sure why I'm replying to you tbh :p
 
The housing market has got to be a major factor in the UK's low productivity. We have a system that rewards those who have been productive in the past over those who are productive now.
 
Tunney said:
The housing market has got to be a major factor in the UK's low productivity. We have a system that rewards those who have been productive in the past over those who are productive now.
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Not even that, it simply rewards those who existed in the past and weren't even productive. So many people hit up right to buy and now have ex-council houses worth hundreds of thousands.
 
Tunney said:
The housing market has got to be a major factor in the UK's low productivity. We have a system that rewards those who have been productive in the past over those who are productive now.
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It is just a dice roll to be perfectly honest. When it comes to housing, if you were born in the 60s you had some hard times but things came good, born in the 70s you have never really experienced any difficulty with housing, born in the 80s and you have had a challenge, born in the 90s and you have got little to no chance.
 
wesimmo said:
And people's ability to get a mortgage.

I've just bought the house we already live in, as part of the process I pretended we were looking to sell and got 3 estate agents to value it.

I'm still getting phone calls to see if I want to let it out at a price that would bring in double what I'm paying for the mortgage.

Ok I put down about 20% deposit, but that tends to be the issue, getting the lump sum and not the monthly payments, if my experience is anything to go by.

I've inadvertently ended up with 2 properties and both I could double the mortgage in rent if I chose to.
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Some great yields in your area! What neck of the woods are you in?
 
In reference to the initial quotation by the OP linking house prices to consumer spending.

How did I feel when one of my properties went into negative equity from 2008 to 2011? I do not believe that it changed my spending behaviour but there was a concern that it would cost more than I could afford to sell it and move on. It resulted in me staying in the property a couple of years longer than I would have liked.

I suppose if house prices are increasing, home owners could get confidence that he economy is booming and that they could effectively remortgage to pay for that expensive holiday or that car that they wanted. This, however, has to be counteracted by those who are aiming to get on the housing ladder, effectively they might be trying to save at a level that will never fall in line with the bubble. Do they try to chase an ever moving target or do they say **** it and accept that it will never happen and spend accordingly?

In respect of BTL property yields, my properties in Hertfordshire are very lucrative and sit at around 9 to 10%.

My property in Bedfordshire sits at around 6.5%. Significantly lower. However we didn't buy this initially to be a BTL, it was supposed to be our dream home so the rental market wasn't important for us at the time. If we ever move back to the UK I would love to move back into this house.
 
House prices have stabilised where I live but that was down to banks refusing to give mortgages saying the house wasn't worth it. Not for the lack of people wanting to pay the prices.
 
To be fair to the article posted in the OP, the BOE hasn't said that they encourage house prices to rise in order to improve consumer confidence. They are just drawing conclusions that as prices increase, consumer confidence grows. The article linked doesn't require tinfoil hats.

I agree that the housing market in the UK is broken right now though.
 
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