Housing market

Grissle

Grissle

Grissle

Associate
Joined
3 Dec 2008
Posts
182
How long do you guys think it'll take before those hit hardest break even again on the housing market?

I bought a flat about 3 years ago for 100k, currently it's worth about 88k. I'm feeling the burn, I wasn't intending on spending such a large proportion of my adulthood in a 1 bed flat but it's increasingly becoming apparent. I was hoping it would take another 3 years to fix, but is that wishful thinking?
 
My view is that it will be quite quick. There is a shortage of housing, and I think that once the recession is fully over it will be pretty much business as usual.

There may be more restrictive lending by the banks, but there will still be demand from those who want to get on the property ladder...
 
RadioheadR6 said:
There is a shortage of housing...

There may be more restrictive lending by the banks, but there will still be demand from those who want to get on the property ladder...
Click to expand...

"Demand" has virtually nothing to do with house price. House prices are set by money supply - they are how much people can borrow/afford. House prices increased in the past because money supply increased and fell as money supply dried up.

There is no evidence of "business as usual" which wasn't usual at all, the last decade has been unprecedented, returning any time soon. What there is evidence of is higher taxes, reduced public spending, higher unemployment and higher interest rates over the coming decade. None of those things suggest increasing house prices.
 
NathanE said:
5-10 years. And that's assuming a new bubble is allowed to grow.

To be honest you've not really lost much compared to most. Some properties have lost £100,000 or more.
Click to expand...

It's all relative though, my house is worth a lot less and I'm a lone first time buyer that falls into a lower salary bracket. What's more people who have older, larger family homes that are losing more are far more likely to want to stay there... where as I don't really have my eyes set on this place to raise a family :(
 
I was in the same situation last time round Grissle.

I bought a one bed flat in 88 for around £60k and four years later it was only worth £38k. The only option I had was to let the flat out and get a second mortgage to buy the houser i wanted. Fortunately, the banks were still quite happy to lend then unlike this time round. This was of benefit to me because I took advantage of both ends of the market.. the house I bought was much cheaper and I sold the flat when the value returned but it took around 8 years to get back to what I paid for it.

The irony is, that if I'd kept it another 5 years, the sale of the flat would have paid the balance of my mortgage on the house.
 
Grissle said:
How long do you guys think it'll take before those hit hardest break even again on the housing market?

I bought a flat about 3 years ago for 100k, currently it's worth about 88k. I'm feeling the burn, I wasn't intending on spending such a large proportion of my adulthood in a 1 bed flat but it's increasingly becoming apparent. I was hoping it would take another 3 years to fix, but is that wishful thinking?
Click to expand...

you purchased at teh peak of the bubble, house prices still have a long way down.
 
What difference does it make what your flat is worth unless you are looking at moving?
If it had doubled in price your mortgage would still be exactly the same and if you wanted to move to upgrade those other houses would have gone up even more.
Your house may have dropped by 12k but a bigger house will have dropped even more.
 
I suspect house prices are going to stagnate for 5 years at the very least (best case for you). More likely would be a futher (albeit small) falls over the next few years when the payback for the bailouts begin and interest rates rise, and the middle class are squeezed, and then a long period of stagnation. This is bad news for you, so just make sure you overpay as much as you can.

The money market is at its new level of output, the recovery has happened, and the current lending levels is the new precedent. The return of 2002-2007 lending will never return. For this reason alone, ignoring the mountain of other problems, prices cannot rise.

The "ladder" you and many other bought into has broken. You've unfortunatly experienced what it is like being at the bottom of a pyramid scheme before collapse.
 
chipperhead said:
What difference does it make what your flat is worth unless you are looking at moving?
If it had doubled in price your mortgage would still be exactly the same and if you wanted to move to upgrade those other houses would have gone up even more.
Your house may have dropped by 12k but a bigger house will have dropped even more.
Click to expand...


People that bought expect capital gains, just like those that bought before them. Its a classic ponzi scheme model.
 
clv101 said:
"Demand" has virtually nothing to do with house price. House prices are set by money supply - they are how much people can borrow/afford. House prices increased in the past because money supply increased and fell as money supply dried up.

There is no evidence of "business as usual" which wasn't usual at all, the last decade has been unprecedented, returning any time soon. What there is evidence of is higher taxes, reduced public spending, higher unemployment and higher interest rates over the coming decade. None of those things suggest increasing house prices.
Click to expand...

what about the people that still have money and dont need to borrow.

around here (london) the lack of supply and huge demand has sent prices sky high again
 
I was worried about our house, bought 3 years ago for £135k. However, next doors has gone up for sale at £155k, only difference is a small conservatory.

finger crossed if I can do the extra work I want to we could be pushing £180-200k :D
 
RadioheadR6 said:
My view is that it will be quite quick. There is a shortage of housing, and I think that once the recession is fully over it will be pretty much business as usual.

There may be more restrictive lending by the banks, but there will still be demand from those who want to get on the property ladder...
Click to expand...

Why do you think it will be quick?
I am on a decent salary, above the national average and without a hefty deposit, I am not going to be able to afford a property AND have a decent lifestyle. on a 140K mortgage I am looking at over £900 in repayment on the current interest, if it goes up am going to be struggling.
Were do you think the recovery will come from, people cannot afford the current house prices never mind if they start rocketing.
The last boom was based on stupid lending and BTL, BTL is unattracive and lending has thightened up.
 
chipperhead said:
What difference does it make what your flat is worth unless you are looking at moving?
If it had doubled in price your mortgage would still be exactly the same and if you wanted to move to upgrade those other houses would have gone up even more.
Your house may have dropped by 12k but a bigger house will have dropped even more.
Click to expand...


I know what you are saying but it doesn't quite work like that.. The sale of the flat would redeem the exisiting mortgage. Since there is negative equity on the flat then there is a shortfall that has to be found, regardless of the value of the purchase property. Otherwise the banks will be lending 100+% mortgages which isn't going to happen.
 
You must log in or register to reply here.
Back
Top Bottom