Anyone Who Has Owned A House For Ten Years...

[MinceBalls]

I have often argued on here that the supply and demand argument is spurious - that it is the cost and availability of credit that controls house prices.

No! Cost and availability of credit IS PART OF the supply / demand equation!

[Agentimmo]

Bought in 1996. Mortgage almost paid (and very manageable).

Where I live, this type of home was affordable for late 20s / early 30s middle income people. With 1 or 2 kids. Due to HPI, the only new neighbours since about 2000 have been in the 50+ bracket or retired. It's starting to feel like one of those Arizona retiree compounds, like the Golden Girls

Plan to move as soon as the crash is in full swing.......

[erranta]

No! Cost and availability of credit IS (A MAJOR) PART OF the supply / demand equation!

Fixed for you & imagine the offers if interest rates were @ 12-15%!

[TheCountOfNowhere]

Plan to move as soon as the crash is in full swing.......

The crash is in full swing

[Democorruptcy]

Bought first house in 2000 for £104k.

Moved in 2006, selling for £168k, buying for £227k.

At the time we moved, the total mortgage for the new house, plus original deposit, would not have bought our first house..

And, of course, had HPI been zero, the price differential would have been circa 35-40k instead of 60, so we ended up with £20k more on the mortgage than otherwise. That's real money, instead of the fixticious £60k or so that HPI technically gave us..

This sums up the folly of it all and explains who really prospers.

As you say the average sheeple thinks they have made £64k because they bought at £104k and sold at £168k but that is an increase of 61.5% If you assume that the next £227k house has increased by the same amount it would have been £140k with no HPI. So the 61.5% HPI hasn't benefitted you at all. The gap in price is £59k with HPI (£227k - 168k) but only £36k (£140k - £104k) with no HPI.

Therefore the HPI has cost you £23k even before you look at how much interest you have paid between 2000 and 2006.

This is why bankers now get such large bonuses = higher prices = larger mortgages = more interest to pay.

[Agentimmo]

The crash is in full swing

Not yet Monsieur. Once we get to 30-40% off peak , then I'll start to check the "For Sales".

Bought my current place in 96. Drop from top to bottom was -40%. After the bubble of the last 12yrs or so..........

PS. When I was looking for a place in the early 90s, every EA told me that "the market would never fall. Stabalisation, yes. Fall...never"

[Tired of Waiting]

Not yet Monsieur. Once we get to 30-40% off peak , then I'll start to check the "For Sales".

Bought my current place in 96. Drop from top to bottom was -40%. After the bubble of the last 12yrs or so..........

PS. When I was looking for a place in the early 90s, every EA told me that "the market would never fall. Stabalisation, yes. Fall...never"

Wise man. Well done.

[Charlie The Tramp Returns]

When I moved from my FTB home in 1976 with a £4k mortgage I had to treble that mortgage to move up to my second home. Family and Friends said I should be certified.

[blankster]

We bought our first house in the mid 1980's and our current house is worth about £250K with mortgage paid off in full about 4 years ago. When we bought our first house stretched ourselves to the maximum and the market was beginning to rise strongly. If we hadn't bought when we did - literally, we'd probably still be in rented accommodation now.

In no way could we possibly afford to get started on the property ladder from scratch now, even if we were younger. Not even a basic 2 bed flat.

Edited September 18, 2010 by blankster

[Charlie The Tramp Returns]

Living in a house even if it is owned outright is dead money.....you can't spend it without taking on debt, paying interest and having another dd to folk out for each month so having even less surplus money to spend.....HPI only favours the rich and those with more than one property....is it not fairer that more of us can afford to have just the one.

A very interesting analysis.

I have owned all the houses I have lived in outright for the past 30 years after paying off a newly taken out mortgage into 4 years with a redundancy payment in 1980. Investing the monthly mortgage alone produced a pay off of £240k after 25 years. Taking into consideration that over that 25 year period I might have paid on average £90k in rent that being a total saved to add to the pot then becomes £330k.

What is the total cost in money from my wallet to buy 40 years ago £17k which includes interest and all buying fees.?

Now I want money, take out a lifetime mortgage, spend it on wine, women, women, and more women, and I don`t give a **** who gets anything when I`m gone, if there is anything left when the lender takes his money.

[davidg]

So you must be praying that the young person you'll eventually sell to will earn £85 K/yr too then?

Good luck with that.

I'm not overly bothered to be honest but a correction in house prices would suite me.

Demographically we are moving to a situation where there will be fewer younger people (even in the developing world) thus fewer people to buy any assets off-loaded by tomorrow's retirees - be that houses or other investments such as shares or bonds.

[Tired of Waiting]

And on the fabled housing ladder, HPI just moves the next rung further away, so the extra bedroom now costs a 'whole salary' increment rather than just 0.33 of a whole salary .... plus interest.

Yep, it is unsustainable, and gravity always wins.