Jump to content
House Price Crash Forum
Sign in to follow this  
apom

Any Property Now The Wrong Property

Recommended Posts

Okay the market is dropping, but for those on the ladder this shouldn't make any difference. The house they want to buy will drop to, a lower price they recieve will be reflected in the lower price they are having to pay for a new home.

and this fact means that resistance to a drop should not be as high as you might think.

But two years ago a couple I know bought a two bed house. They bought this at a time when any two bed house would sell quickly and values where similar

Now it is a buyers market.

the Two bed that they bought is end terrace with the back of the house attached to another.

A small pavement runs around the house with a road all the way around.

So, no garden and surrounded by traffic.

Two years ago this wouldn't have made a difference, now where there are more houses then buyers it does.

They can't sell theirs when there are many of the same size with gardens and better frontage.

Share this post


Link to post
Share on other sites
Okay the market is dropping, but for those on the ladder this shouldn't make any difference. The house they want to buy will drop to, a lower price they recieve will be reflected in the lower price they are having to pay for a new home.

and this fact means that resistance to a drop should not be as high as you might think.

But two years ago a couple I know bought a two bed house. They bought this at a time when any two bed house would sell quickly and values where similar

Now it is a buyers market.

the Two bed that they bought is end terrace with the back of the house attached to another.

A small pavement runs around the house with a road all the way around.

So, no garden and surrounded by traffic.

Two years ago this wouldn't have made a difference, now where there are more houses then buyers it does.

They can't sell theirs when there are many of the same size with gardens and better frontage.

This is the flight to quality. Purchasers have a choice now and can avoid the worst properties.

Hence the average property that sells now is better quality than a year ago. This means that the drop in prices is actually greater than reported, as we are to some extent comparing apples with oranges.

Houses selling now are both cheaper and better quality.

Share this post


Link to post
Share on other sites
Okay the market is dropping, but for those on the ladder this shouldn't make any difference.

How do you work that one out?

Person A buys a house in 2004 for £200K

Person B buys an identicle house in 2006 for £150K

Are their mortgage repayment going to be the same? Are they in the same amount of debt? I don't think so. I think that makes quite a difference!!

Share this post


Link to post
Share on other sites
How do you work that one out?

Person A buys a house in 2004 for £200K

Person B buys an identicle house in 2006 for £150K

Are their mortgage repayment going to be the same? Are they in the same amount of debt? I don't think so. I think that makes quite a difference!!

Okay.

person number one owns a property worth £170,000 he wants to move up to a property for £220,000

Now a year later he hasn't moved and his property is now worth £100,000 he is sad, he is in negative equity but the house he wants to buy is now £150,000 he needs to find £50,000 where a year ago he would need to have found... £50,000 he might kick himself for buying orriginally at the same time.. But the price difference is the same..

does that make sense..

Providing he can meet the mortgage.. and that he hasn't entered negative equity..

most have owned their homes for longer then the boom..

They just have a home and they only care what extra the new house will cost

Share this post


Link to post
Share on other sites
Okay.

person number one owns a property worth £170,000 he wants to move up to a property for £220,000

Now a year later he hasn't moved and his property is now worth £100,000 he is sad, he is in negative equity but the house he wants to buy is now £150,000 he needs to find £50,000 where a year ago he would need to have found... £50,000 he might kick himself for buying orriginally at the same time.. But the price difference is the same..

does that make sense..

Providing he can meet the mortgage.. and that he hasn't entered negative equity..

most have owned their homes  for longer then the boom..

They just have a home and they only care what extra the new house will cost

Agreed.

But there are plenty who have bought 2000 - 2004 who will be well and truely shafted.

Share this post


Link to post
Share on other sites
And the logic doesn't apply to those who want to buy a smaller house either.

No.. okay my logic is flawed..

but I was feeling bad for all those recent homeowners and BTL Landlords..

only for a second..

Some don't care.. those who have watched their homes grow for years and havent touched their equity..

They will be better of

infact this is only going to clobber those who thought there could be free money..

Edited by apom

Share this post


Link to post
Share on other sites
Agreed.

But there are plenty who have bought 2000 - 2004 who will be well and truely shafted.

Casualties of war I'm afraid.

I dont agree that 2000-2001 were at unrealistic prices - they were high, but not unrealistic. Therefore I will base my arguement on 2003/4.

I will use myself as an example. Based on a joint NET income of £2k

If bought a terrace in 2003 for £100K - This is near enough 3.5x wages. (3.5 x me and 1 x GF). This would be (roughly £576 on 100% Mortgage) this is roughly 25% of our wage. After paying bills, insurances, running costs, food etc., (35%) the bills will amount to roughly 60% of our wage.

I think this is quite high, but achieveable. 40% 'float/leisure'

To go up that one step nowadays to a semi - I would probably sell for about £118K. this is a GOOD RATE of growth!

To get the semi that was £135K, at the same rate of growth would be £159K.

I reckon that I would have paid about £2k OFF the first house, if im lucky, leaving a profit of £20K. Which means I need a mortgage of £139K to buy the semi.

That means that my mortgage would shoot up from £576 to £838.62 (based on 23 years repayment).

That's an increase of 45% on my previous mortgage.

OR Our debts would be 76% of our income.

Mortgage £838 = 41% of wage

Bills £700 = 35% of wage

Gas, Electric, Water, TV Licence, Household and Building Insurances.

Running costs Car (insurance, petrol, tax, service) Food,

I also have to pay £50 a month to go through the Mersey Tunnel

£700 IS realistic

To me, 76% of income is UNACCEPTABLE and IMHO these people CANNOT afford to move up the ladder anyway coz they are mortgaged up to the hilt.

Yes - you can reduce bills i.e cancel Gym, Sky, Internet etc. But that is getting paid out of the paultry 24% that left to spend on leisure goods.

All's Im pointing to is the percentage of INCOME.

That one step up the ladder will be 16% out of the initial 40% Float. Almost halving it.

I work to LIVE, I dont live to WORK. I would not stop holidays, things for the house, clothing, car issues and basically LIVING a little to upgrade a house and worry that If the cambelt went on my car, and there is a £300 bill, that I didnt have that little pool of money.

FANTASY SCENARIO - I know but I believe that the ones that have bought in the past 12-24 months CANNOT afford to upgrade anyway so dropping prices will put them in NE but they will have to ride it out anyway. I think the only problem they have is they are stuck where they are, riding out the NE.

BTW I am not callous, and I am not saying 'hard shit - deal with it'. I sympathise with all in this predicament, but I dont think a lot of these people intended to, or could move in the next 4-5 year anyway. I could be wrong.

<Edited for typo's - AGAIN>

Edited by teddyboy

Share this post


Link to post
Share on other sites
Okay the market is dropping, but for those on the ladder this shouldn't make any difference. The house they want to buy will drop to, a lower price they recieve will be reflected in the lower price they are having to pay for a new home.

and this fact means that resistance to a drop should not be as high as you might think.

But two years ago a couple I know bought a two bed house. They bought this at a time when any two bed house would sell quickly and values where similar

Now it is a buyers market.

the Two bed that they bought is end terrace with the back of the house attached to another.

A small pavement runs around the house with a road all the way around.

So, no garden and surrounded by traffic.

Two years ago this wouldn't have made a difference, now where there are more houses then buyers it does.

They can't sell theirs when there are many of the same size with gardens and better frontage.

And here we are nearly 2 years on

Share this post


Link to post
Share on other sites
And here we are nearly 2 years on

And your point is?

Why dont you start a thread and actually start a discussion on your point of view, instead of bumping old threads with unctuous one liners.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 315 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.