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Timm

I'm Conflicted...

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On the one hand, I’m wishing I bought the house I saw in January for 2.5x my household income when I could have got a ten year fix at less than 5%.

On the other hand, I’m feeling like it is 2007 all over again. Prices are going up, but a few of us can see the whopping great cliff coming up fast. I’m becoming more and more convinced that there is a perfect storm brewing that will make the last two years look like a walk in the park. Why? Well, all the downward pressures still exist, or have grown. The debt overhang is still there. The affordability crisis is still real (unless you are on a tracker). Credit is still tight. But the whole thing is being kept afloat by unsustainably low rates, the feverish pumping of printed money and media manipulation.

But this can’t last. Inflation is already present in food and fuel. People are coming off of teaser rates now, and available new rates are edging up again. Government rescue schemes are being exposed as failures, and there is pressure on all sides to get the deficit under control. At the same time unemployment is rising and wages are capped or falling. The housing market is currently characterised by low supply and demand made up almost entirely of the cash rich. It looks like the pent up supply is going to hit just as the cash rich begin to run out of steam and household expenses start to shoot up. I can’t see the money printing having much of an effect without wage inflation. Having called Biflation for a while now, I’m thinking I may need to prefix a scary adjective to it.

Of course, I may yet wish I had bought that house, but I don’t think it will be because prices go up.

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House prices are currently rising quicker than you can save for one, I wouldn't want to be in the position of deciding when to buy right now, could go either way.

I reckon house prices will continue to rise as long as mortgages are available for less than 5% though, might be a while

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I'm not committing to anything until I see some kind of stability, not just economically either. I really need to move but I'm happy with what I've managed to build in the last few, tough years and don't want to put any of it in jeopardy for the sake of having a "nice" roof over my head. Tough decisions ahead. :huh:

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I just don't see the point in buying. Renting is so cheap with all the flexibilities it gives (lose your job, no problem, move to where there is one).

The gains of the last few months have only regained what was lost the previous month. Make no bones about it, we're still heading down fast.

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It's still obvious to me that house prices are massively overvalued.

Remember your Fred Harrison. 2010 is the year depression takes hold.

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On the one hand, I’m wishing I bought the house I saw in January for 2.5x my household income when I could have got a ten year fix at less than 5%.

On the other hand, I’m feeling like it is 2007 all over again. Prices are going up, but a few of us can see the whopping great cliff coming up fast. I’m becoming more and more convinced that there is a perfect storm brewing that will make the last two years look like a walk in the park. Why? Well, all the downward pressures still exist, or have grown. The debt overhang is still there. The affordability crisis is still real (unless you are on a tracker). Credit is still tight. But the whole thing is being kept afloat by unsustainably low rates, the feverish pumping of printed money and media manipulation.

But this can’t last. Inflation is already present in food and fuel. People are coming off of teaser rates now, and available new rates are edging up again. Government rescue schemes are being exposed as failures, and there is pressure on all sides to get the deficit under control. At the same time unemployment is rising and wages are capped or falling. The housing market is currently characterised by low supply and demand made up almost entirely of the cash rich. It looks like the pent up supply is going to hit just as the cash rich begin to run out of steam and household expenses start to shoot up. I can’t see the money printing having much of an effect without wage inflation. Having called Biflation for a while now, I’m thinking I may need to prefix a scary adjective to it.

Of course, I may yet wish I had bought that house, but I don’t think it will be because prices go up.

I admire your decisive nature.

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I just don't see the point in buying.

Because rent lasts a lifetime, and a mortgage only lasts 25 years....... Or much less even if you only overpay a little, and increase those overpayments in line with wage inflation.... :rolleyes:

Renting is so cheap

There are many parts of the country where this is not the case.

Examples----- 3 bed terrace in Aberdeen, rent £900 per month, purchase price, £160K. 3 bed terrace in Preston, rent 450, purchase price, 65K.

Renting can be more than the cost of a full repayment mortgage.

with all the flexibilities it gives (lose your job, no problem, move to where there is one).

That flexibility is over rated. If you own, and are deperate to move, you can rent your house out and rent another somewhere else. If you are made redundant, the government will help with mortgage interest. Etc etc etc.

What if you have kids, and need to live in a certain catchment area for a good school? Renting is insecure, and could seriously impact your kids future if you are forced to move and cant find another house for rent in the right area.

I have owned for over 20 years, and have lived all over the world in that time, whilst keeping a house here. Owning a house never made me think twice about moving.

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Because rent lasts a lifetime, and a mortgage only lasts 25 years....... Or much less even if you only overpay a little, and increase those overpayments in line with wage inflation.... :rolleyes:

What a load of carp! AS USUAL!

If the I/O of a Mortgage is more than the rent, then saving the difference and repayment part means you can buy outright. This of course assumes that the difference is the same or greater for 25 years.

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I reckon house prices will continue to rise as long as mortgages are available for less than 5% though, might be a while

There may possibly be a small rise next month, then it's down down down all the way.

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I have owned for over 20 years, and have lived all over the world in that time, whilst keeping a house here. Owning a house never made me think twice about moving.

All over the world huh? Care to expand on this without any BS?

And if it's true, why suddenly spend so much time on this forum? Doesn't add up.

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House prices are currently rising quicker than you can save for one, I wouldn't want to be in the position of deciding when to buy right now, could go either way.

I reckon house prices will continue to rise as long as mortgages are available for less than 5% though, might be a while

I honestly can't see why anyone is saying about house prices rising when Nationwide / Halifax / RM / Hometrack have ALL said that prices were ONLY rising because of lack of properties available and if more properties come on the market HPC will resume.

Economists agree that we need approvals to double before prices would even start to stabilise .

The CML and BOE have both said "the green shoots have no roots", I assume due to the RMBS market being closed and lenders now reliant on dwindling deposits etc ..

The survey of building societies said that on average they expected a futher 10 - 15% this year.

I honestly can't see anything that could possibly support house price rise other than a temporary shortage of houses due to people wrongly believing property will go back up next year!

All the old reasons are still applicable regardless of a few blip summer months are they not?

Take a look at the article below from last week :

Five Reasons why House Prices will Plunge Further

And this one is worth another read:

Why House Prices Have Much Further to Fall

Nothing has changed, the reasons for HPC are still as valid.

Edited by Sybil13

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IUMBV45 Monthly interest rate of UK resident banks (excl. Central Bank) and building societies' sterling 10 year (75% LTV) fixed rate mortgage to households (in percent) not seasonally adjusted

bankofengland.co.uk

September 2008 6.04

October 2008 6.2

November 2008 5.85

December 2008 5.71

January 2009 5.47

February 2009 5.55

March 2009 5.64

April 2009 5.63

You can still fix for 10 years at a good rate.

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