Saturday, Sep 26, 2009
We know it but do "they"?
Lovemoney.com: Don't be suckered into buying property
"Friends who missed the opportunity to buy property when it was still affordable ended up buying rubbish flats in dodgy areas at unmentionable prices - if they could afford to buy at all."
"It still costs too much!
The average first-time buyer property has fallen slightly since the start of the year, by nearly £6,000 to £154,205. But with finance tight, that still leaves the average first-timer needing a £55,700 deposit to be eligible for the best mortgage deals.
That is down from £66,900 in January, but still absolutely outrageous. When I bought my first flat in south-east London back in 1997, my deposit was just £10,000 on a property valued at £87,000."
Lots of Comments that may be of interest.
Posted by techieman @ 10:09 PM (900 views) Add Comment
12 Comments
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1. mander said...
You see apart from the Lib Dems no other politicians want to do anything against the property bubble simply because they want the home owners vot. We will have to wait like Japan to have the houses back to real values. Too long and too painful.
2. Fallingbuzzard said...
Correct mander, they will only make moves to support the market until they no longer need to. End of May 2010.
3. quiet guy said...
Nice post techieman but I have one small gripe.
"Don't be suckered in just yet, or you'll get it in the neck, especially if inflation and interest rates start rising."
If we get high inflation, property might not be such a bad idea compared to savings accounts, assuming that you can stay solvent long enough to benefit.
4. techieman said...
QG - Even if inflation rears its head in a big way the question will be will asset prices be chased up by wages inflating too. Its all very well saying that inflation is good for highly leveraged assets, because the assumption is that the debt gets eroded by inflation. But if the cost of everything rises and wages are squeezed, then that means that there is less money available to service the debt, particularly if we are near a peak.
Your last sentence is the point. How many can?
5. techieman said...
when i say peak i mean peak in terms of personal indebtedness. There is only so much debt people can physically service. A BTLr makes a good point - he is kept in the game by the service costs being low (he is on a tracker). And that is the gamble - if the IRs can be kept low enough, then yes the falls may be kept in check. Not what i think but .... anything is possible.
6. crunchy said...
If inflation takes off wages don't have to rise.
This is why inflation will be that much more painful this time round.
Contary to most here I see inflation being more of a threat rather than an asset to the housing market.
7. Neil B said...
@ Mander - you are incorrect: During Japan's bubble/burst, it only took 2 years from the date that the bubble burst for house prices to shed 50% of their value.
8. alan_540 said...
What a sensible article. Shame that the mass media don't report the housing market/economy in this balanced way.
What concerns me is the comments section... people are angry with the author for daring to suggest it's a bad time for FTB'ers to buy... just goes to show there's still a lot of people out there who think the worst is over and it's gonna be up up up from here.
9. krustyatemyhamster said...
@alan_540
I think the comments section shows there's a lot of people out there who want the worst to be over.
10. alan_540 said...
@krusty
We all want the worst to be over. The difference is that we here on HPC think that it's not over just yet. The comments section in this article indicate that there are clearly many people who think that the worst IS already over, and who think that the author is giving bad advice by advising first time buyers to stay out of the market until it returns to long term trend affordability. I feel that it is a shame that there are people who are still so desperate to get onto the property ladder that they are willing to pay inflated prices in the middle of a recession.
11. Another_pleb said...
"a desperate old hag living off its glory years while demanding an unseemly price for its favours"
That bit mad me blow tea out my nose. Why can't the national broadsheets produce stories like this?
12. techieman said...
alan_540 i have said in many occasions that the fact that so many people don't believe that prices can go lower, is the very justification for that. If you watch the video on share prices, you will see what i mean. My only question is are there more people to be sucked in before the market re-instates the downtrend and how will that be shown in the indicies?