Neil B Posted September 14, 2009 Share Posted September 14, 2009 What will be the thing that happens next to bring down this pyramid of cards ? The developers (e.g. Redrow / Barratt Homes) will sell off their existing stock at vastly reduced prices. They have to do this to avoid bankruptcy. Several developers have already announced to their creditors that their land asset values have halved (so that they can declare a profit when they sell the properties). Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted September 14, 2009 Share Posted September 14, 2009 The developers (e.g. Redrow / Barratt Homes) will sell off their existing stock at vastly reduced prices. They have to do this to avoid bankruptcy. Several developers have already announced to their creditors that their land asset values have halved (so that they can declare a profit when they sell the properties). I've forgotten which developer it was but one recently increased their land values to make their figures look a lot better. Quote Link to comment Share on other sites More sharing options...
Even Keel Posted September 14, 2009 Share Posted September 14, 2009 (edited) Look don't misunderstand, I'm no bull. And please just because I haven't posted on here before there's no need to take the patronising view that I am unqualified to comment just becuase I may question some long/ firmly held beliefs that question your fundamental views. People react badly to you because you come out with such obviously bullish figures. You say you are paying £18,000 a year on rent and for that money you could buy a £600,000 house. Anyone who's been here for more than a day or two usually learns that paying interest on a loan and buying a house are two very different things. Assuming you can get a mortgage with an interest rate fixed at 0% for the next 25 years, your £18k per annum will only add up to £450,000. 25 years of paying off an interest free loan and you still would have needed a £150k deposit at the start to make it work. Please let us know where all the 0% mortgage offers are. What you can get for the money are all the benefits of home ownership without ever being likely to own the place. It certainly lets you get on with your life without having to worry about the whims of your landlord. So long as you keep paying the bank you can do what you like with the place and won't get thrown out on the street at a moments notice. The downside is that unless you can afford to put in a lot more than £18k a year you'll be forced to sell the place eventually to pay back the bank. At that point it's back to renting again unless property has risen enough in value for you to downsize to somewhere acceptable on the money left over. *edit* With your 300k deposit that means a mortgage rate of 3% over the 25 years would get you the house, there's still not too many of those available. And since you are only paying £1300/m in rent you would need a 2% interest rate for that to work. If you can afford £18k a year don't forget renting is saving you £2400 which you can invest or spend however you like at the moment. Edited September 14, 2009 by Even Keel Quote Link to comment Share on other sites More sharing options...
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