Good Deal?

[Belfast Boy]

Hate to b a pain in the you know what but the Nationwide says 4.2

... they may do - but the ONS/Nationwide data I use says it is actually 6.25. You can follow the links to the ONS and Nationwide websites and do the calculations yourself if you think I am making it up.

[Belfast Boy]

... they may do - but the ONS/Nationwide data I use says it is actually 6.25. You can follow the links to the ONS and Nationwide websites and do the calculations yourself if you think I am making it up.

Here are the links, for you to check the data I used, to calculate 6.25.

http://www.nationwide.co.uk/hpi/historical/Q2_2009.pdf

http://www.statistics.gov.uk/pdfdir/ashe1108.pdf

Edited August 17, 2009 by Belfast Boy

[subby]

I cant agree with this. With a normal mortgage you buy a house for say £135. You put in the (say) 15% deposit and the bank puts in the rest.

With momentum you buy the same house for £130k the builder loans the 5% deposit and the bank puts in the other 95%. If in 5 years the property rises by more than 5% you repay the builder his deposit. Howerer, if it dosnt you keep it and if the value falls you have your mortgage lowered by up to 10%. As prices have already fallen 40% that is another 15% covered.

As a developer I don't push these any more as it leaves a liability with me and the properties are selling ok without them.

there are SO SO many people leaving education now with easily 20k+ in debt. even with living at home with mum and dad there aren't too many people saving enough for a deposit. They mostly will depend on bank of mum and dad but even then mum and dad are getting it tough now to be able to fork out for a deposit for their kid to buy a house. Some can and do but the majority of parents aren't and can't afford to.

I personally think that in 5 years prices will start to increase..actually before 5 years, so the banks and builder are covered there.

[Belfast Boy]

I personally think that in 5 years prices will start to increase..actually before 5 years, so the banks and builder are covered there.

I'm not so sure. I still think this is going to be a proplonged period of reduced economic activity i.e. a depression. If it is a hyperinflationary depression then you will be right, but we will have much bigger things to worry about then than house prices.

[NuBrit]

I'll assume you bought it as an investment? I'll also assume it needs a lot of work?

No, I bought it as a place to live. The roof needed patching up and the kitchen needed replacing. When the missus and I get the money, we'll do up the bathroom, put down new carpet, replace the ghastly PVC front door and other minor jobs.

[NuBrit]

there are SO SO many people leaving education now with easily 20k+ in debt. even with living at home with mum and dad there aren't too many people saving enough for a deposit. They mostly will depend on bank of mum and dad but even then mum and dad are getting it tough now to be able to fork out for a deposit for their kid to buy a house. Some can and do but the majority of parents aren't and can't afford to.

When I went sniffing around the banking for a mortgage, I was told I only needed a 5% deposit (Ulster Bank). Also, I've many friends who have recently bought who didn't have two ha'pennies to rub together. That would lead me to believe that the banks are still fairly lax with regards to deposits.

[talksalot81]

When I went sniffing around the banking for a mortgage, I was told I only needed a 5% deposit (Ulster Bank). Also, I've many friends who have recently bought who didn't have two ha'pennies to rub together. That would lead me to believe that the banks are still fairly lax with regards to deposits.

I am confused by this. The people who really lose out when things go belly up are the people who have gone in there without any real equity and who thus find themselves fighting not to drown. So, frankly, bugger what the banks say!! Just because the bank will give you money does not mean that you can really afford it and it does not mean you have to take it!

Only a matter of months ago, the banks were known the world round as the bad guys. So why are the sheeple so keen to trust them again!?

[polythene pam]

When I went sniffing around the banking for a mortgage, I was told I only needed a 5% deposit (Ulster Bank). Also, I've many friends who have recently bought who didn't have two ha'pennies to rub together. That would lead me to believe that the banks are still fairly lax with regards to deposits.

I went in to and FA to enquire about a mortgage recently and was told that, if I hadn't a deposit, there wasn't a lot they could do for me. So I don't know where your friends were borrowing from.

[gordyjuly23]

I went in to and FA to enquire about a mortgage recently and was told that, if I hadn't a deposit, there wasn't a lot they could do for me. So I don't know where your friends were borrowing from.

Go to XXXXXXXXXXXXXshop advice people - they lead me to belief that it was as simple as walking into the bank asking for the 10% deposit in a separate loan. They also pushed momentum and co-ownership all in the space of less than 20 minutes

I then went to another MA and they painted the proper picture. It is possible to get a loan from a bank if you are claiming to buy a "car" or something and use that money as a deposit. This session lasted closer to 2 hours and was much more in depth

MOD EDIT COMPANY NAME REMOVED

[stcolin]

I then went to another MA and they painted the proper picture. It is possible to get a loan from a bank if you are claiming to buy a "car" or something and use that money as a deposit. This session lasted closer to 2 hours and was much more in depth

Care to elaborate?

[Daenad]

Only a matter of months ago, the banks were known the world round as the bad guys. So why are the sheeple so keen to trust them again!?

To misquote Kay from Men in Black

A person is smart. People are dumb, panicky dangerous animals and you know it. Fifteen hundred years ago everybody knew the Earth was the center of the universe. Five hundred years ago, everybody knew the Earth was flat, and a few years ago they all knew houses would always go up. Imagine what they'll know tomorrow.

The short answer is, they probably think they'll miss the boat if they shoot up twenty zillion percent again. Added to that the average person won't have a clue about the negative impacts of whats been done to prop up the current mini-bubble (in regards to N Ireland i use bubble in the loosest of terms) and think the problems have been sorted.

[gordyjuly23]

Care to elaborate?

I dont want to advertise one Mortgage Advisor over another other than to highlight that XXXXXXXXXXXXshop people are terrible. I can and will stand by that assessment.

I wouldnt recommend visiting another incase somebody didnt get the level of service I felt I got at it. Suffice to say that I came out of the meeting with the second Mortgage Advisor's slightly deflated due to the size of reality check I'd just been given. He did give alot of advice and let me know in a realistic fashion where I stood unlike onestop, who suggested I could get a 90k mortgage on my own and could get a deposit from a bank without any real hassle.

The second advisor was shocked by that statement

MOD EDIT ; TRADE NAME REMOVED AS PER FORUM RULES

[talksalot81]

The short answer is, they probably think they'll miss the boat if they shoot up twenty zillion percent again. Added to that the average person won't have a clue about the negative impacts of whats been done to prop up the current mini-bubble (in regards to N Ireland i use bubble in the loosest of terms) and think the problems have been sorted.

To quote the inimitable Ripley from Aliens...

"Did IQs just drop sharply while I was away?"

It really does seem that way! Anyone pushing multiples and borrowing deposits etc. is walking back into the nest thinking that a quick squirt of bleach has it safe again!

[getdoon_weebobby]

I'm not so sure. I still think this is going to be a proplonged period of reduced economic activity i.e. a depression. If it is a hyperinflationary depression then you will be right, but we will have much bigger things to worry about then than house prices.

in my opinion the end result might be hyperinflationary (if it gets so bad they fear the debt will never be repaid) . but it will be deflationary for years to come.

i dont see 2007 prices returning for years and years in either real or nominal terms

[BelfastVI]

in my opinion the end result might be hyperinflationary (if it gets so bad they fear the debt will never be repaid) . but it will be deflationary for years to come.

i dont see 2007 prices returning for years and years in either real or nominal terms

I would b the first to agree with this. The bubble will never be repeated by people who remember this one. The prices in 2007 ballooned in the first/second quarter to £225k (depending on which report you read). In the previous quarter (Q4 2006) the average price was £180k. I would love to find out how many houses were sold in the first half of 2007, I would guess 10,000. Whilst a significant number they are the ones in real difficulty now and most of them were investors. The average price in 2006 was around £150k. Whilst these people are uncompfortable they should get by. It depends on the type of house you bought. If it is a semi in a good area it should, hold its value better than inner city apartment.

Booms may come again, by our children or grandchildern, but not to the extent we seen.

[Rock-n-Roll]

What are you suggesting

Well, nobody is CERTAIN that house prices will continue to fall. In order to make renting value, it needs to be equal to or less, than what a property will drop in the next 12 months.

So, I either risk renting, or risk a mortgage.

colin look at the bigger picture

IMO the best case scenario for the next few years is this

we are currently being feather bedded by a government trying to win the next election

using mountains of unsustainable debt to do so

this if we are lucky will last till the tories are elected next may

then while they have the oportunity to blame it all on the previous government

will slash goverment expenditure

many more jobs will go

paypackets at best will be frozen

VAT will get a hike

along with a weaker pound which the tories always love

inflation will take off

interest rates will follow

do you really expect houses not to continue to fall

only when they start to worry about the next election and splash the cash again

will houseprices have a hope of rising

depressing i know but only history repeating itself

rock on!

[talksalot81]

Or look at your own extreme scenarios:

1) Now is a good time to buy and you buy. (best case)

So you have a low end property. FTB race into the market in 6 months time but you were there first and you can profit from your haste and your debts are wiped out. Your finances have had a jump by a couple of years because of your foresight.

2)Now is a good time to buy and you don't buy.

You have to rent for a while but it gives you the time to be sure of the timing. In the interim, you have paid off some of your debt and just have to wait a while to get the low end property. You have lose yourself maybe a couple of years but you are undoubtedly in a better financial situation because of your debt being paid down.

3) Now is a bad time to buy and you buy. (Worst case)

You find that your old habit of building debt was merely childsplay. You now have negative equity. One of you looses your job or gets ill, you now can't pay the bills. You now potentially spend 10+ years recovering.

4)Now is a bad time to buy and you dont buy (as is the general recommendation)

You find yourself paying out significantly less renting (I know you said rent is comparable, but other things make that comparison appear otherwise) than on owning and maintaining a home. Your debt is eroded because you have turned over a new leaf and are being cautious with your money. All the while prices of houses are dropping and people who overstretched are suffering and their properties are helping the market down. In 2 years time, you have your debt paid off (It is possible if you really put your mind to it), prices are 30% lower and you have significantly less risk to purchasing.

Now it seems to me that there is an awful lot more to lose by buying and getting it wrong than not buying and getting it wrong. Are you really that willing to gamble with your long term future?

[shipbuilder]

I'm just summarizing most of the recent posts on here, this is not my actual view.

My view is that the opinions posted here are based on the posters wanting to influence people not to buy, so that prices will drop further and bargains can be had by all.

I know I'm a bit late to this thread (back from holiday), but I had to comment on this.

So how is 'bargains can be had by all' a bad thing?? Assuming you just mean the people on here, well presumably if we can get 'bargains' then everyone else can, including you? So, again, how is that bad?

I always laugh at this idea of houses being 'pushed' down. There is a long term average for prices and the boom/bust cycle will fluctuate around it, market forces pulling it back toward the mean. During the boom, prices were pushed, now they are falling back on their own. Nobody is pushing prices down, we are just commenting on what has happened and previous evidence.

Of course I want prices to return to a reasonable level. Northern Ireland does not have a strong economy - a weak economy and high living costs are a disaster for the future - mine and everyone elses - why would anyone want that? Why would you expect a different opinion from anyone?

Edited August 23, 2009 by shipbuilder

[VedantaTrader]

I know I'm a bit late to this thread (back from holiday), but I had to comment on this.

So how is 'bargains can be had by all' a bad thing?? Assuming you just mean the people on here, well presumably if we can get 'bargains' then everyone else can, including you? So, again, how is that bad?

I always laugh at this idea of houses being 'pushed' down. There is a long term average for prices and the boom/bust cycle will fluctuate around it, market forces pulling it back toward the mean. During the boom, prices were pushed, now they are falling back on their own. Nobody is pushing prices down, we are just commenting on what has happened and previous evidence.

Of course I want prices to return to a reasonable level. Northern Ireland does not have a strong economy - a weak economy and high living costs are a disaster for the future - mine and everyone elses - why would anyone want that? Why would you expect a different opinion from anyone?

Good reply. I have mentioned this peculiarity before, and have commented on it. I m afraid it is something in our society and the prevailing attitude to house prices, which I think estate agents, banks and the government have been a major cog in...and this is that:

Rising House prices is GOOD

Falling House prices are EVIL...

Yet rising petrol, rising food costs are bad, and when they fall it is good. I pose the question to anyone in Spaders mindset which is a heft percentage of the population ...what is intrinsically better about a rising house price ,meaning you have to work more to buy one, than rising heating oil and petrol prices? If either rise it takes more of someones salary, savings to buy them...Stable prices are what would benefit everyone.

[Ride_on]

I'm also rather chuffed that Spader and other Bulls think that HPC bears can influence the housing market. I really doubt such a pedestal is deserved, and if we could have we would have stopped the boom. Just like EAs didn't really influence much on the way up, HPC also doesn't on the way down. We just hope to explain our take on things and hopefully save a few others from making expensive mistakes.

There have been alot of newbie's on talking about buying, and they have obviously not thoroughly read and understood the HPC forum as they all ask the same questions and we are mostly repeating ourselves alot with the same information and explanations. Even if most of the market was reading HPC they do not read the history and it takes a big dedication to figure the market out and DYOR. It would take alot of time and posts to answer each persons situation.

Edited August 24, 2009 by Ride_on

[SPADER]

Good reply. I have mentioned this peculiarity before, and have commented on it. I m afraid it is something in our society and the prevailing attitude to house prices, which I think estate agents, banks and the government have been a major cog in...and this is that:

Rising House prices is GOOD

Falling House prices are EVIL...

Yet rising petrol, rising food costs are bad, and when they fall it is good. I pose the question to anyone in Spaders mindset which is a heft percentage of the population ...what is intrinsically better about a rising house price ,meaning you have to work more to buy one, than rising heating oil and petrol prices? If either rise it takes more of someones salary, savings to buy them...Stable prices are what would benefit everyone.

Thanks for letting me know what my mindest is, what would I have done without you??

Just for the record I've said early on this thread that im not overly bothered what valuation my house has at the minute, Im not in negative equity, Im not planning on moving, If i was planning to do so then any house I'd be looking at would have dropped in value by the same % as my own, unless I want to move to south Asia (I Dont)

What really gets my back up are people who are sooo certain what the future holds, who use graphs to demonstrate historical bubbles and crashs, but disregard other indices as being too national and not applicable to our wee country.

[SPADER]

I'm also rather chuffed that Spader and other Bulls think that HPC bears can influence the housing market. I really doubt such a pedestal is deserved, and if we could have we would have stopped the boom. Just like EAs didn't really influence much on the way up, HPC also doesn't on the way down. We just hope to explain our take on things and hopefully save a few others from making expensive mistakes.

There have been alot of newbie's on talking about buying, and they have obviously not thoroughly read and understood the HPC forum as they all ask the same questions and we are mostly repeating ourselves alot with the same information and explanations. Even if most of the market was reading HPC they do not read the history and it takes a big dedication to figure the market out and DYOR. It would take alot of time and posts to answer each persons situation.

Ride on

How many people have visited this forum so far this year?

[Ride_on]

Ride on

How many people have visited this forum so far this year?

I could tell you but I'd have to shoot you ;-)

Not really sure what your point is.

Edited August 26, 2009 by Ride_on

[talksalot81]

What really gets my back up are people who are sooo certain what the future holds, who use graphs to demonstrate historical bubbles and crashs, but disregard other indices as being too national and not applicable to our wee country.

The thing which gets me is the lack of appreciation of risk. The bearish here risk nothing with their views. They do not potentially ruin their lives if they are wrong. The bullish are another matter. If one of the bullish individuals puts his money where his mouth is and finds he/she is wrong, we could be talking about them darned near destroying their lives.

You can say anything at all, but any suggestion to purchase at the moment is a risky one. A suggestion not to buy is a safe suggestion. Mostly the people asking the questions have no redundancy so the course of action should be obvious.

[shipbuilder]

What really gets my back up are people who are sooo certain what the future holds, who use graphs to demonstrate historical bubbles and crashs, but disregard other indices as being too national and not applicable to our wee country.

What indices? From my observations, most people refer to statistics regarding NI where they are available and look at UK wide when they are not - perfectly reasonable and logical. The economic and structural differences between here and the rest of the UK and how they could affect the housing market have all been discussed at great length on this forum. Why does it annoy you when people seem confident of their opinions?

I am hoping for a better future for our wee country - logic dictates that must include reasonable house/land prices, otherwise we face a brain drain and a dearth of investment. Who wants to set up a business in an island outpost of Europe with sky-high land prices?