Prof

Mortgage payment = £500 per month. Other expenses = £500 per month. Income = £1000 per month. Mortgage rate goes up by 0.25%. I`d say that could be crippling. Obviously, a very simple example. Add the next increase to the few we have had recently, then factor in those who are finishing 2-3 year fixed deals, that could be crippling for some. However, I agree, taken on it`s own, a 0.25% increase can`t be described as "crippling".

Great timing, or just a coincidence ? IMO, the next 0.25% increase will be the one that finally tips the balance. When these higher base rates filter through to mortgage payers bank balances, that will be major shift into negative HPI. At a guess, I`d say that by November, things will get a bit nasty. Pity the next chancellor, how is it going to be possible to keep the plates spinning ?

Sounds good to me......... but - 1) £750 p/m should be enough to be buying a place like that. £750 p/m isn`t, that`s why you are happy with the deal. 2) If you are managing to save plenty of £££ for your retirement, then that`s fine, as you`ll need a good pension if you want to continue renting a decent place when you give up work. 3) If your landlord decides to sell up, are going to have the hassle/expense of moving. Having said this, buying is not really an option at the moment, so it seems like you are in a good situation.

TalkSport/Radio used to be good in the days of Tommy Boyd. That Human Zoo show he did was sometimes too funny. A regular caller was "Cyril The Wasp" and also the double act "Mr Table and Mr Chair". Complete loonies ! There was also a guy that regularly called in and stated "You love Timmy Mallet" ! I must admit to appearing on the Human Zoo once, and I got a compliment from Mr. Boyd and his sidekick Ash. One of the first times I tuned into Tommy Boyd`s afternoon show, he was having a debate about "throwing a sicky" to get a day off work. He was having a go at those people who did this. I seem to remember that when I tuned in the next day, Tommy was off "sick". He had several debates that had me in stitches. I`m sure that there are websites where you can download some of his best "work".

Thanks. "Use a long spoon" - nice one !

I agree, the banks play a huge part in encouraging and maintaining HPI. There are ways to fight back (not literally !) against the banks/lenders. Here`s what I do - 1) I didn`t get sucked into "climb the property ladder" hype. I could have borrowed more, and moved, but I`m cautious (maybe too cautious !), so I didn`t want to expose myself to too much debt. OK, I`m not sitting on a huge amount of equity, but my mortgage doesn`t give me sleepless nights, and doesn`t prevent me from having "spare" cash to spend if I want to. 2) I actively search for the best savings deals. Yes, even when I invest in a 6%+ ISA or savings account, the bank is probably making money out of me, but it`s better than being lazy and letting the bank get away with paying me a poor rate of interest. 3) I don`t spend money that I don`t need to. Careful budgeting will allow me to save more, when I need to replace my car/computer/shoes/carpet etc, I will not need to borrow from the bank. 4) My bank recently offered me a "special" current account that offered certain benefits in return for a monthly fee. When I looked at what they were offering, it diodn`t look like a good deal, so they aren`t getting my £10 a month. 5) Credit card ? I ditched my bank`s Mastercard, got a Morgan Stanley Platinum, they pay me to use it. I compare the lenders to drug pushers, one they`ve got you hooked, it isn`t easy to kick the habit. As far as I am concerned, debt should be used with caution. Listen to Martin Lewis (moneysavingexpert.com), the man talks a lot of sense !

Hard-earned wealth ? More like borrowed wealth !

Absolutely spot on. As long as the person on the next rung down is brainwashed into paying a little bit more, with a little more "cheap" money from the bank, the pyramid will grow taller. The moment the banks stop being so "generous", or the money becomes a bit too expensive, the pryramid will start to collapse. Yes, HPI may have been helped along by a housing shortage, but I wonder if the so called shortage is largely part of the brainwashing.

If there is any justice, your plan should pay off. Good luck to you. It will be a double whammy for you as you buy your affordable property at a sensible price, while others who fell under the spell of "must buy a property, no matter what" suffer. This property pyramid can only last for so long. Most of us have been predicting, or waiting for a crash, it can only be a matter of time before it happens.

Lambs to the slaughter ? Probably. In my (limited) experience, if there`s an easy way to make a lot of money, there is usually a large risk. The fools who are now betting their financial future on property investment should remember what has happened to a lot of company and private pensions over the past 10 years. The reason they are investing in property is probably due to the bad news they hear about pensions, do they not know that property investment is not immune from problems ? Some are now finding out that there is no such thing as a free lunch. My strategy ? Spend as little as possible (within reason). Save as much as possible, deposit accounts and a few funds. Avoid debt. Above all, don`t be greedy.

"The pension funds should be using their surpluses to secure defensive market positions, so they are protected during the following downswing." I would hope so. That`s the advantage of stock market investment, it is far easier and quicker to change your strategy than if you need to sell property. I will also point out that each payment into my pension fund doesn`t include an interest charge, unlike mortgages. Also, if I hit hard times, I can temporarily reduce or stop the payments into my pension, not so easy with a mortgage. I think I`m just trying to convince myself that I made the right decision when I started paying into my pension 20 years ago !

Don`t a lot of people use property as their pension investment? Are property valuations not in surplus ? If so, why not share this out ? I`ll love it, just love it, if property prices start to fall (properly) and traditional pension funds/stock market continue to do well. This will be a futher lesson to the sheep that flocked around property. Anyway, those that have saved money into pension funds have had a few rough years, so good luck to them if things are turning around. At least some of their money may have been invested in real businesses, not just piles of bricks.

Teachers want 10% pay rise to help them afford a home to live in. If they get what they want, the taxpayer will have to stump up the extra cash. Meanwhile, a lot of other public sector workers will be holding out their hands for more money, so the tax bill may increase even further. Private sector workers will also want more, self employed and small businesses will try to charge more. In other words, most of us will end up paying for HPI, whether we own a home or not. HPI isn`t money for nothing. I know I`m stating the obvious to the members on this forum, but Joe Public who has generally welcomed HPI, is starting to realise that it might not have been such a good thing. Reality is starting to rear it`s ugly head.

Sorry, I just thought that I summed up the last five years of HPI. Anyway, I`m glad to say that I did sleep well, and should I get further inspiration, I shall post again. Maybe if I eventually "truly see light", then I should be able to afford to move house.

Sold signs - Subject to contract by any chance ? OK, so the reductions are repeated a few times. If the property market is still healthy, why am I seeing so many properties for sale ? Why are so many properties taking so long to sell ? Why did one of my customers fail to sell his property after being on the market for over 12 months (that was last year) ? The crash may not be here, but it`s near

It`s obvious ! We all live in houses. We all need a house to live in. Here in the UK, we`ve lost the plot. We have lost our competitive edge when it comes to industry or business that the rest of the world requires. One of the only businesses that is doing well is one that everyone in this country relies on. A business that can only be effectively maintained by the local population. A business that a majority have a vested interest in, or a job that is involved in. That business is the property market. As property is relatively expensive comapred to other commodities, there is plenty of "margin", so landlords,estate agents, banks, lawyers etc can all take a piece of the action. Meanwhile, the rest of us have been fooled into thinking that we are also doing well out of property. Slowly, this situation is becoming more obvious to the general public. The problem is that while the bankers, estate agents, government (stamp duty, inheritance tax) have taken their £££, the punters will have paid for it. Many will escape with minor wounds, but some will perish. No doubt we will not learn from this experience, we`ll be here again in another 10-15 years, if we`re lucky.

I`m in no Rush to be a bull.

In 2013, I won`t be a bull, I`ll just be hoping that hard working individuals will be able to buy a home to live in. If they have a few quid to enjoy themselves, that will be a good thing. If you want to make a profit, work hard.

A bit of history. I left school at 15. I was always a working class lad who wanted to actually do something practical. I didn`t want to talk about it, think about it or plan it, I just wanted to do something "real". Even then, doing something "real" was becoming unfashionable, and relatively poorly paid. I went into consumer electronics repair - yet another industry with negative prospects. From day one, my chosen trade was blighted with negative inflation, the prices of the products that I worked upon were in decline. This made it more difficult to make a decent living as each year went by. Technology was racing ahead, but not our wages. It was a slower death than that suffered by the miners and other industries, is that a blessing or a curse ? Anyway, in my early 20`s, I considered climbing onto the "property ladder". This coincided with the last "boom". Very quickly I realised that I was being left behind. I couldn`t comfortably afford to buy a home to live in. I felt increasingly angry that only the relatively well off could afford to buy a home. I came close a couple of times, but always felt uncomfortable with taking on a relatively large debt. Eventually, after the last crash, I was able to take a step on that ladder. It`s never been easy to take on and pay a mortgage, but like millions of others, I did. For a few years the property market was fairly docile. That was OK, I just worked hard and paid the mortgage, not bothered about what my house was worth. 2001, my house is worth a bit more than what I paid for it 40K increased to 60K, a sensible increase over 7 years (about equal to the rise in my income). Since then, wooooooosh ! Prices have doubled, trebled or more for some. This is way out of line with incomes and the real economic strength of our country. That is the way I see it. It`s simple, property prices have gone mad. I`ve worked quite hard, saved as much as I can. The only way I can move up to the next rung (a similar size place in a better area) is to blow my savings and take on more debt. I`m not about to do that, but plenty have in the hope that they`ll make a few quid. It looks as though the early 90s are about to be repeated. For the next generation, I hope so.

I`ve just looked at a few local areas. Hold tight!

I agree with you. I think you have just helped to sum up what I was trying to say in my original post. What is wrong with buying a home just to live in ? The fact that a fair number of people in this country buy a property with "investment" in mind, has a large part to play in the fact that we have had a property boom. If some of the vast sums of the public`s money had been invested in shares, businesses, savings etc, we would have more affordable homes and less people getting into serious debt problems. Maybe less people would be unemployed or on minimum wage. IMO, the property boom has effectively drawn money away from many people`s pockets, savings, pensions etc and put it into bank`s profits, estate agent`s BMWs and builder`s bank balances. If anyone believes that it`s mainly down to supply and demand, let`s see what the demand is like as interest rate rises take hold. Are there too many eggs in the basket ? I think so.

"dont know % wise , but 20grand under excess price , luckily im not in a huge rush so ill hold on to it till i get what im after what its worth !" Excuse me, but your house may be "worth" £400K, but it`s real value will be what you get for it. An offer of £380K isn`t bad given recent interest rate rises and the current uncertainty, IMO. I wonder if this person will be as generous when an offer is put in on their next property ? Prediction, and I`m only guessing, but £380K may be regarded as a VERY generous offer by the time the house sells (if it sells).

I listened to the Jeremy Vine house price crash debate last night. It has got me thinking (a dangerous thing !). I heard the "Bull" say that in the medium-long term, property is a good investment. "Here we go again", I thought, "the same old argument from a Bull". If I understood him correctly, he was saying that although there is a tiny chance of a crash, and maybe a possibility of a slow-down, propspects for property are good. I wonder if he really has thought about what this means, if he is correct ? At the moment, it is generally agreed that property prices are too high, to some degree. If the Bull is correct, and in the medium term, property prices keep rising, where will we be in 10-20 years time (medium-long term ?) The young generation are no doubt finding it difficult at the moment to climb onto "the ladder" (I hate to use the term), so IF the Bull`s predictions materialise, I assume that in 10-20 years time, it will be even more difficult for FTBers. I strongly believe that the real measure of wealth is the number of zero`s in your (positive) bank balance, or the thickness of your wallet. It`s OK having a house, car, jewellery, shares etc that are worth £££, but until you sell, you can`t spend the gain in your investment. For property to be a good investment (and by that, I mean an investment that performs generally better than what you can get from guaranteed savings accounts, or outperforms wage rises), then property will be more expensive with respect to your income, or have appreciated more than guaranteed savings. Even if that happens, in my opinion, you`ve only done well if you can convert this gain into some real money. I know that a house isn`t a pure investment if you live in it, it also serves a very important job of providing you with somewhere to live. If you only consider a house as your home, why worry if it goes up in value ? As long as you can afford to maintain it, keep up with the mortgage payments and have a few quid left over to have a bit of fun, surely that`s enough ? My home has increased in value about 3x over the past 10 years, and as I`ve said before, "so what ?". It gives me no pleasure to sit here and think of the yonger generation being priced out. In fact, it makes me feel quite angry. I don`t have children, but I have friends who do, and they are quite concerened for the financial future for their offspring. What is really annoying is the Bull that I listened to yesterday, who if effectively promoting financial hardship for my friend`s children. If he was prediciting further HPI, but telling us it wasn`t a good thing, that would give me a different opinion of him, but from what I heard, he`s just another greedy, greasy Bull(sh*t) merchant. My prediction is for a correction (crash?) at some point soon, it may have already started. The next boom may be a long time coming, as current personal and government debt levels are high, and UK Plc doesn`t seem to offer the rest of the world anything of substance. I can only see a large proportion of the UK population`s wages coming under pressure from economic migrants and increased global competition. I feel that we have been living in a slight dream for the past 10 years, but it can`t be long before the alarm clock goes off. Rant over.

I assume you are a Liverpool fan, then.