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Guest uberstuka

This Ftb Is Not Convinced.

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Guest uberstuka

This is not my own situation, that's already been well documented. I've given this guy my advice - which hasn't worked, what would yours be?

The names have been withheld to protect the innocent.

"Thanks for the reply and i did read through all of your links, including your own situation.

To be honest my opinion hasnt changed on the subject. The links i provided to you last time i found after 1 google search to produce some evidence of another side and i know they are serving their own interests, much like people who say not to buy into the market hoping it will crash. i think the notion that there will be, in the next couple of years, a surplus of cheap good housing for all potential FTB to buy is madness. As i may have mentioned before, there are plenty of cashed up people waiting to buy property if/when prices drop, this will push prices back up. In my personal situation, i am buying with another person and we have a good deposit at around 15% and have sorted a mortgage at 4.29% calc daily and fixed for 2 years. we can also pay in an extra 10% of the total each year without penalty. I have done the sums and the money i am/would be putting into rent (around £700 per month down this way) i would much rather put at least some of it back into a place. so atm i pay the £700 on my own and am going into a place 50/50 with someone with repayments of around £800 per month between both of us....

Looking at the house prices for the street i am buying, we are also paying far less than others over the last 5 years in the same road (the seller did come down £15k on the original asking price which is well over 5% and better than current published figures.

for a true crash to happen across the board there will need to be thousands of homeowners from all different areas who are willing to sell their homes at much lower than current rates and i just cannot see this happening. once (if) prices start to drop a great deal you will have a shortage of supply in the market as i doubt there will be a rush on to sell houses cheaply - only people who really have to sell their place will do it. secondly, FTB from the last 5 or so years are the up and coming middle class of the UK. they will be aged 25-35 generally and be the driving force of consumption in the economy. These are the very people that the govt needs to maintain control. these are the ones looking for stability and potentially raising a family, the ones that are needed to be 'good little consumers.' if these people are f**ked over by plummeting house prices they are going to be looking for someone to blame. an unhappy people are those who wake up and take action...

all in my humble opinion as usual. i believe a lot of bad things are in store but i dont believe a housing price 'crash' is one of them. If it does, i will be the first one to say you are right and i should have listened to you."

Edited by uberstuka

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In my personal situation, i am buying with another person

Well, I think that settles it. They'll be one of the horror stories in 'Crash! Crash! Crash!' in 2008: 'I bought with my mate and now we can't move because neither of us can afford to buy the other out'.

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Looks like the usual attitude - simply only able to look at what a mortgage will cost him today, unable to look beyond his 2-year fixed rate deal. At that low low rate he's already worked out that it'll cost £100 more than renting (OK some reapayment but mostly interest), in 2 years time when IRs are 6%-7% (perfectly possible) they will be looking at payments of £1200+, will have lost the 15% deposit and will be stuck in the overpriced hole they bought in NE for 10 years until the market has turned around. In this time there will have been all sorts of costs associated with ownership that he wouldn't have renting.

Amazing stupidity but unfortunately not uncommon.

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i am buying with another person

Who is this other person? How long are you willing to live with them? What happens if one of you wants to sell and the other one doesn't? What happens if one of you stops paying the mortgage (for whatever reason)?

FTB from the last 5 or so years are the up and coming middle class of the UK. they will be aged 25-35 generally and be the driving force of consumption in the economy. These are the very people that the govt needs to maintain control.

Demographically, the 25-35 age group is in the minority. Electorally, the government couldn't care less about this age group.

Edited by zzg113

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secondly, FTB from the last 5 or so years are the up and coming middle class of the UK. they will be aged 25-35 generally and be the driving force of consumption in the economy. These are the very people that the govt needs to maintain control. these are the ones looking for stability and potentially raising a family, the ones that are needed to be 'good little consumers.' if these people are f**ked over by plummeting house prices they are going to be looking for someone to blame. an unhappy people are those who wake up and take action...

very backward thinking - I can only think of 25-35 year olds that will benefit from plummeting house prices (job intact of course!). At the moment if they own property they aren't able to move up to family sized property and start families and if they don't own property they are unable to buy even 1-bed cupboards let alone homes to start families in.

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This is not my own situation, that's already been well documented. I've given this guy my advice - which hasn't worked, what would yours be?

The names have been withdrawn to protect the innocent.

"all in my humble opinion as usual. i believe a lot of bad things are in store but i dont believe a housing price 'crash' is one of them. If it does, i will be the first one to say you are right and i should have listened to you."

You have to go with what you want to do in life if you are really convinced. I think for anyone who lived through the previous crashes, your words sound completely familiar. It really can never seem like there is an end. But make no mistake, all bubbles burst. Always. Flick through any source of economic history, it is an unavoidable side effect of markets, capatalism does not exist without ebb and flow of markets. There can be little doubt this is a bubble by any definition. And there are some very dark storm clouds at the moment that weren't evident a few years ago when things seemed crazy even back then.

That said, if you plan to hold a house for at least 10-15 years, you will probably be unlikely to lose out according this analysis, in thelong run. You just need to weigh up your own needs and motivations. If you can pay it off, what's the problem?

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This is not my own situation, that's already been well documented. I've given this guy my advice - which hasn't worked, what would yours be?

The names have been withheld to protect the innocent.

I would ask him if he wants to buy some shares in my dot com company :lol: They're going cheap this month.

Alternatively get him to look at the BBC Hali-wide graph and todays Guardian article and ask himself exactly why prices aren't going to unwind significantly.

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If you can pay it off, what's the problem?

The big problem is buying it _with someone else_. If one of them decides they want to move and the other wants to stay, they will be screwed... and totally, utterly screwed if there's a crash and they're 120k in negative equity (as is more than likely on a property that they're paying 250k for at the peak).

If there is a crash, then both of them will be stuck with that brick and mortar millstone around their neck for the next decade.

But, hey, why worry? 'The government won't let the housing market crash'.

Just like they didn't in the late 80s.

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You pay your money and take your chance fair enough but remember housing is not the most liquid investment and when the market changes it can be almost impossible to move.

You wouldn't be here if you were not interested in other peoples opinions and all I would say is don't be the first to buy if prices fall a little. Keep your options open.

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Additionally, youre assuming the whole country will be up in arms about a potential "crash" but dont forget - prices dont matter a damn unless you are buying or selling.

So the vast majority of the population will be unaffected.

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The other key factor here is that amount of debt the age group you mention has, which is set to increase with University top up fees.

If someone is leaving University with 30k of debts, that further reduces their purchasing power.

The net result is that there will be fewer 'traditional' first time buyers going forward because they'll be back with their parents paying off their debts until a later age, not looking to buy (or rent) a home.

Thus the pot of potential FTBs is likely to take a dip over the next few years anyway and there are hardly any left as it is.

Edited by DTMark

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Just to also add to this: the negative equity issue is a genuine and serious factor.

One of our neighbours was in fact two young couples who clubbed together to buy their 2 bed shoebox for 188k at the peak last year, a place barely big enough to house two people.

These properties (there are about 10 on sale at the moment) aren't shifting now even though they're down to 159k so far (29k off in one year - they paid over the top, and these are falling fast), so they have some more to drop. My non scientific guess is that they will eventually settle at around 129k.

The thought of living with another couple in a tiny house for many years unable to get out without taking a heavy loss, or at all, is one I wouldn't want to contemplate.

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This is not my own situation, that's already been well documented. I've given this guy my advice - which hasn't worked, what would yours be?

The names have been withheld to protect the innocent.

"Thanks for the reply and i did read through all of your links, including your own situation.

To be honest my opinion hasnt changed on the subject. The links i provided to you last time i found after 1 google search to produce some evidence of another side and i know they are serving their own interests, much like people who say not to buy into the market hoping it will crash. i think the notion that there will be, in the next couple of years, a surplus of cheap good housing for all potential FTB to buy is madness. As i may have mentioned before, there are plenty of cashed up people waiting to buy property if/when prices drop, this will push prices back up. In my personal situation, i am buying with another person and we have a good deposit at around 15% and have sorted a mortgage at 4.29% calc daily and fixed for 2 years. we can also pay in an extra 10% of the total each year without penalty. I have done the sums and the money i am/would be putting into rent (around £700 per month down this way) i would much rather put at least some of it back into a place. so atm i pay the £700 on my own and am going into a place 50/50 with someone with repayments of around £800 per month between both of us....

Looking at the house prices for the street i am buying, we are also paying far less than others over the last 5 years in the same road (the seller did come down £15k on the original asking price which is well over 5% and better than current published figures.

for a true crash to happen across the board there will need to be thousands of homeowners from all different areas who are willing to sell their homes at much lower than current rates and i just cannot see this happening. once (if) prices start to drop a great deal you will have a shortage of supply in the market as i doubt there will be a rush on to sell houses cheaply - only people who really have to sell their place will do it. secondly, FTB from the last 5 or so years are the up and coming middle class of the UK. they will be aged 25-35 generally and be the driving force of consumption in the economy. These are the very people that the govt needs to maintain control. these are the ones looking for stability and potentially raising a family, the ones that are needed to be 'good little consumers.' if these people are f**ked over by plummeting house prices they are going to be looking for someone to blame. an unhappy people are those who wake up and take action...

all in my humble opinion as usual. i believe a lot of bad things are in store but i dont believe a housing price 'crash' is one of them. If it does, i will be the first one to say you are right and i should have listened to you."

You are probably too young to remember the 90's crash.

Everybody said the same thing back then.

I remember people scrambling like mad to get on the property ladder back then

and it crashed a few months later big time !!!

Reason it crashed was same reason it will this time - everyone who could afford

to buy bought, there was no-one left to buy ! only one way it could go and that

was down, although the housing crash played out over a few years there were big falls in the first few months! believe me it will happen !

There was also the same old crap being churned out by the VESTED INTERESTS every week, someone on here posted all the newspaper headlines from the

last crash (they could have been written today) and they make vey interesting reading.

HAVE FAITH

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These are the very people that the govt needs to maintain control. these are the ones looking for stability and potentially raising a family, the ones that are needed to be 'good little consumers.' if these people are f**ked over by plummeting house prices they are going to be looking for someone to blame. an unhappy people are those who wake up and take action...

I love the fact that people think that the government "won't let it happen".

As for people taking action - what would they expect to happen? Gordon Brown to bail them out of negative equity?!

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"As i may have mentioned before, there are plenty of cashed up people waiting to buy property if/when prices drop, this will push prices back up. "

If he thinks about this for just one moment, he'll see why this is wrong.

Imagine you're a buyer looking an EA window, and you notice prices have dropped 5% after 5 years of silly-boom. What's your reaction going to be?

a) Gosh I must buy one right now!

B) Must buy some shares in Estate Agent price stickers.

c) Something else...

:P

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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