cock-eyed octopus

Can you think of anyone who would buy a house if they thought they would go into negative equity? I would implore anyone contemplating buying a house to fully consider the implications of this predicament. But, ultimately, it MUST be the individual's choice.

You are exactly right. At the moment renting is, in many parts of the country, the less stressful option. I suppose my reaction is coloured by my own experience - I've always felt insecure living in a house somebody else owns (yes, I know the bank owns "your" house, but at least there is the prospect of paying it off; &, yes, If there's no prospect of paying it off you're daft to take it on). Also I know a young couple who have a much better flat (on an IO mortgage) than their previous rented flat (same monthly payment) round the corner. Both flats in Islington, moved last summer. They're saving like mad & both seem less stressed than previously. Yes, You'd need to be happy that the house you're buying won't drop below your equity, otherwise don't buy - but that must be down to the individual's judgement. If HPs rise then you're in a better position than someone who'd been paying rent (if similar to your mortgage).

"Yup" Yup "I have two friends who have bought flats on the fringe of London for over 200K. They not being very bright IMO; one has an IO mortgage, god knows about the other but he has recently jacked his job in. The rest of my mates are priced out. I am not that clever, I haev just taken the time to my research - mortgages are a fairly hefty commitment afterall. People who bought over 5 years ago are fine, and shou;dn't be stung, unless they loaded up on MEW or BTL. I do fear for my friends who have bought, but they won't listen to me." <{POST_SNAPBACK}> So you're asserting the necessity of HPC on the behaviour of a % of a % (ftbs)? Important though the disaffection of you & some of your friends may be, there are a hell of a lot of other factors to consider - some of which do point to HPC, some do not.

I disagree with just about everything on this post 1) Risk assessment. Just about all my non-housing costs have dropped over thr past 20 years (as a proportionn of income). What do I do with the remainder? 2)I would call it optimism, without which we might all just as well commit suicide. We're all dead in the end anyway. The trick is to balance it with the realism that the external world imposes upon us. 3)Not as much in time & stress in living somewhere you hate. 4)Yes, the "when did you stop beating your wife" question is unsupportable, but why do MOST people want to own their own house? Remember, people are paying off mortgages ealier than ever. 5) "Experts" have a crap record in economics (& always will have). When ALL his friends have done well out of owning their own house then it is eminently sensible to follow suit. 6)NOBODY knows what tomorrow may bring; the past is the only pointer we have. And the supervolcano might erupt & bird flu might wipe us out. Again it's risk assessment. In the long term, we're all dead. 7)If you're living in the asset & can afford to do so there 's no problem. This is the position that the vast majority of people are in. Interest rates are crucial. And yes, it's the % rise in the % that matters, so 0.25% now is like 1% in 1990. In the last crash several things happened at once. I don't think people are as daft as you think. If their £300k house is now worth £200k & their £50k mortgage has ten years to run. they won't lose too much sleep. They'll just carry on with their lives. Your whole point of view is predicated upon: I am clever; everybody else, except my clever friends, is stupid

Pardon my ignorance; what do the figures refer to? Grateful for a reply

I think it was about 1970 when I realised the world economic situation was bonkers. Unions were demanding ( & getting ) huge wage increases when most of the world was living near the poverty line. I've always thereafter thought that the situation was morally unjustifiable in principle & unsustainable in practice ; personally I think we are luckily heading for a "soft landing" in global economic terms, but this can only be achieved by our staying ahead of the game in terms of technology & innovation.

I'd be grateful if posters could specify whether the % falls they're expecting are referenced to the asking price, or to their opinion of a realistic price (i.e. % overvaluation). I have seen several posters quoting the same % for both in the same post. Thanks

Knew a guy who got 65mpg out of his Seat Leon diesel (TDi from memory) - saw it on his dashboard display. Mind you, he was a bit strange. Have you looked at a Focus TDCi? I hired one (reluctantly) for a few days & it was a revelation. Went like s**t off a shovel & was lovely to drive. Did about 45-50 mpg. And I HATE Fords...

Thank you for that well-reasoned contribution to the debate. How's the therapy going?

HELP! EXACTLY! ABSOLUTELY! = low IRs? stable living costs? I'm sure you wouldn't Why? What I am saying is that it is possible to repay a much larger mortgage than that derived purely from income multiples. The level of risk is up to the individual's judgement. I am not saying that I advocate this, certainly not without a large cash backup.

Just checked the figures. Checks out OK, but probably nearer £600p.m. Does not includ spending on house refurbishment, however.

All I'm saying is that the income multiple is irrelevant. The balance of risk is the problem, I quite agree. I wouldn't advocate anyone taking out such a large proportion of their income UNLESS they have substantial cash backup to tide them over for a period of time. But this MUST be an individual's personal choice. If everyone was like my mum, for example, there'd be no such thing as mortgages, or debt of any sort. In fact, we'd probably all be sitting in rented houses & doing the washing between two stones down the canal. Bless her.

At any time the market is full of overpriced crap. At the moment - when prices have shot up & everyone can see they've peaked - it is at its worst. I suspect that the majority will drop or drift away over the next couple of years. All talk of % increases or falls is always far too simplistic. As I have said before, I saw 1 house reduced by nearly 30% in a few months (in the late 70's). The feeling I get is that people here want the house they desire to drop by the same amount as the overpriced crap & I can only say my experience tells me otherwise. Incidentally, does anyone have any figures for HPs in Cambridge during the late 80s/90s crash? I'd be seriously interested to know. Income multiples don't make much sense to me. My non-mortgage expenditure is £500-£600 p.m. tops. That's about 1/3rd my net income (when I've got one!) so I could spend 2/3rds on a mortgage; I'm not saying I'd want to, but it's possible without financial duress. Houses that have increased in price dramatically over the last few years; is it possible some were underpriced to begin with? A final small point. Somebody here mentioned the number of parents MEWing to help their children buy. How prevalent do you think this might become? If the parents have ende up with no (or small) mortgage & can afford to repay the increase, then it seems eminently sensible to me; I've done it myself, without realising.

Substitute "down" for "up" Ring any bells?

Not that it makes any difference, but there is a random problem with NHP (& Ourproperty) in that I can't find results for 4 properties that I know to have sold betwen 2000 & 2004. I'm sure sales are down though. If this is like previous market busts, I expect to see 80% less houses for sale this time next year.

I have terrible trouble with this whole HPI/HPC thing. In 1991 I got valuations for my house from £175k to £260k. Put it on @ £225k. The EA we used said it was £225k now, £200K next year, £175k year after... 2 viewings in 9 months later dropped to £175 & sold in a month for£176k. Rented for 1 yr. (hated it) & bought for £66k. Although I can't prove it, I'm convinced that house didn't go up OR down for 6 or 7 years. When we sold, in 2000, something very interesting happened, but that's another story... What I'm trying to say is: did the first house crash? or only 1 EA (£175k) get it right? Why didn't 2nd house keep falling, as per graphs? Around here as well, most house sales seems to be HPI followed by HPC. This has been going on for the 4 yrs. I've lived here. It's all very confusing.

The chavs, like the poor, are always with us. Listen to "Block'eads" off Ian Dury & the Blockheads sublime 70's album "New Boots & Panties". In fact, listen to the whole album... 'Ad a luv affair wiv Tina In the back o' my Cortina A seasoned-up Hyena Could not-'av-been-more obscener She took me to the cleaners And uvver misdemeanours But I got right up between 'er Rum & 'er Ribena Oh, you ask Joyce & Vicki...

Wow! This is actually more frightening than Nazism, which could be construed as a cultural aberration. However, your post does indicate an underlying triumphalism. perhaps inherent in the German psyche? I bow to no one in my admiration for German cultural acheivements, especially in the fields of music, philosophy & science, but surpassing all others?? Or is there another culture you admire more?? Maybe not. Anyway WE must be the best, apparently we're all running 3 minute miles now.

With regard to the first quote, I can see no justification for these assertions. You are asking other people to fund one of three things: i) Time to enable you to acquire more knowledge/proficiency in something that interests you ii) Time to enable you to acquire more knowledge/proficiency in something that financially profits you iii) Both the above I would assert that learning & self improvement are up to the individual; you do not need to enter college to learn about something which interests you. Providing an environment which encourages people to understand complex & important subjects is a different matter & I don't see what it has to do with student loans. Where is the "time & time again" proof? If i) then I respectfully decline your request, if ii) or iii) then I would expect you to contribute financially. This is, of course, a far more complex situation than the bald analysis above would suggest; however, the basic principle applies & I would contend that nearly all advances in human understanding occurred through self-motivation (Einstein was a patents office clerk, remember). The second quote seeks to justify replacing student loans with grants by extraplolation to the limit. However, strangely enough , the same principle, individual's gain vs. society's gain, applies. Historically it would be very difficult to deny the case for universal basic education to benefit the whole of society. Likewise, basic healthcare for all has raised the happiness quotient for everyone. Very few like to see others in sickness & suffering. Again, paying for a police force to enforce the law impartially (!) & ubiquitously (!) helps all citizens to feel safer, rich & poor alike. I would suggest the debate is about whether or not society is extrapolating to the other extreme: i.e. increasing levels of funding for ever more nebulous fields of "study", abuse of the NHS to pay people who do not wish to work (also, you could spend the entire NHS resource keeping one person alive), & the perception that the justice system is on the verge of collapse, perhaps because the law cannot deal with the changing nature of society.

I think you mean winning an argument. Don't understand this, unless it's the Python version. Your "argument " is based on the limited information about BL & her offspring obtained from this website. Very dangerous. I mean, I might conclude you're a whining, freeloading little gobshite. But I wouldn't, because I don't know you.

I just do not understand this. You're talking as if the vendors control the market. Everybody here says prices are dropping. How can this be if EAs only push prices up? Transactions are dropping like a stone anyway! So what does the EA do?Just quietly go bust? I don't think so. The obvious route to try is to get the seller to take a lower price & the buyer to pay more. Thus ACTUAL prices will drop - usually by more than the asking price. If neither side budges, then no sale. EAs certainly have a vested interest in prices going up - in the long term; in the short term they'll do whatever it takes to survive.

Gotcha! It's the people's poet! When did you change your name from Rwic? Alltogether now: "The Ypung Ones Darlin' we're The Young Ones..." I'd stay in Cwedibility Stweet if I were you, with that lovely landlord...

Cottage opposite me up for 225k last Spring, SSTC, for sale, SSTC, sold, for sale again(?) @ 210k, now @ 205k. No sign of life for months. Last July another nearby cottage: for sale board for one day, then SSTC next day. Advertised @ OA 175k. New owners moved in < 1 month. Just found out on nethouseprices sold @ 192.5k. ALL PROPERTY???

At last! A sensible thread. For what it's worth, my advice is to ignore generalities & go with the specifics of each potential purchase. Use your own gut feeling (which is actually the net result of all the information you've gleaned being weighed up consciously/unconsciously). Try to ignore prejudiced, if strongly held, opinions of others. And, particularly, spurious moral aguements. 1n 1971 I bought my 1st house for 4.75k. 5 years later I had it back on for 11.5k. After a few viewings (no offers) a young couple + friend came to look & smiled a lot . Half an hour later I got a phone call "we've just seen your house & want to make an offer. How does 8.5k sound?... " I sold it shortly after for 11.25k After that I offered on a mid-terraced thatch converted (very badly) from 2 tiny ones, The price had been reduced from 32k to 23k (HPC hadn't been invented then), but I couldn't get a mortgage. The next year the smaller of the 2 sold for 26k. I can't remember how many houses I've bought & sold; generally I've been OK - got caught out in 1989 though - ended up STR - but when I look at a house I try to form my own opinion & act accordingly. And remember... All things must pass