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TheEmperorHasNoClothes

I Want Prices To Fall, Then Again, I Don't

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Hi everyone

:D

This is my first post on HPC, and boldly I am starting a brand new topic! I have been reading posts for a few days and I think this is thorougly interesting.

I'm 25 and renting a room in a shared house. I'd love to own a house, but I have found that since being in employment house price increases have outdone my wage increases. In my first 2 years my wages increased by 33%. My ability to buy a house was less after this! So I am waiting to either earn a fortune (another 100% increase in salary) or for a HPC before I buy a house. Because I really want a house, not a flat. If I get a flat I'll need to move again when I start a family which is expensive. I want to live somewhere that'll last me 10-15 years.

But in wishing for a HPC I have a dilemma - I know a lot of friends who have purchased in the last 2 years. A HPC could put them in -ve equity, or at least in a position where they have been conned. Where they could have got a bigger house if they had waited. I want prices to fall so I can get on the ladder, escalator, elevator, or whatever you like to call it. But if they do my friends lose out.

Anyway I try to think, whatever happens happens, it isn't in my control anyway. So i'll just rent away, save a few bucks. And wait for a good time to buy. By renting I can afford to go on lots of holidays and probably save more money than if I had a mortgage and took noon. Cool eh?

Anyone here in a similar position (i.e. same sort of age, renting, waiting for a chance to buy?). Or any older and hopefully wiser people got a comment on this?

Cheers.

Naked Emperor

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I think quite a few people feel like this. We STR'd - inadvertantly at first becuase we got outbid a few times after we'd had to move for our jobs. Now I think it was the best thing that happened to me because I took time out to look at the facts and try to figure out what my best options were (ie to rent and save as much as poss each month). However I do worry that if the crash is as bad as some on here predict that some of my firneds and O/O neighbours will get badly burnt. You will find a lot of cavalier 'stuff them' attitudes out there but an HPC will not be pretty...

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Hi everyone

:D

This is my first post on HPC, and boldly I am starting a brand new topic! I have been reading posts for a few days and I think this is thorougly interesting.

I'm 25 and renting a room in a shared house. I'd love to own a house, but I have found that since being in employment house price increases have outdone my wage increases. In my first 2 years my wages increased by 33%. My ability to buy a house was less after this! So I am waiting to either earn a fortune (another 100% increase in salary) or for a HPC before I buy a house. Because I really want a house, not a flat. If I get a flat I'll need to move again when I start a family which is expensive. I want to live somewhere that'll last me 10-15 years.

But in wishing for a HPC I have a dilemma - I know a lot of friends who have purchased in the last 2 years. A HPC could put them in -ve equity, or at least in a position where they have been conned. Where they could have got a bigger house if they had waited. I want prices to fall so I can get on the ladder, escalator, elevator, or whatever you like to call it. But if they do my friends lose out.

Anyway I try to think, whatever happens happens, it isn't in my control anyway. So i'll just rent away, save a few bucks. And wait for a good time to buy. By renting I can afford to go on lots of holidays and probably save more money than if I had a mortgage and took noon. Cool eh?

Anyone here in a similar position (i.e. same sort of age, renting, waiting for a chance to buy?). Or any older and hopefully wiser people got a comment on this?

Cheers.

Naked Emperor

Welcome to the forum - put simply, you're doing the right thing.

To be concerned about friends who bought 2 years ago is understandable, but think of it this way: if they're happy living where they are, what's the problem? If they can afford to pay their mortgage they won't actually suffer by staying put. In fact, if they move up the 'ladder' they will be saving money in the even of a 'crash.'

Better that you think of the absurdly overpriced properties and the millions who can't afford to buy even a starter flat... ;)

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It's good that you're worried about your friends, but ask yourself this - how much did your friends worry about you being priced out of the market when they were helping sustain high levels of house price inflation?

In the end so long as they like where they're living, can afford the repayments and haven't bought to make a quick profit why worry. Negative equity only really becomes an issue if you're forced to sell for whatever reason, particularly in the next few years.

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Tell them that they should sell because you think prices might fall. Do this once only.

If they do crash then at least you done all you could.

Does it really matter if they go into negative equity - I dont think they will be paying attention to the prices - they'll be getting along with their lives...

It is you - without a home like the rest of us, being fixated on prices going up or down to the nearest pound.... ;)

Edited by trev

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Tell them that they should sell because you think prices might fall. Do this once only.

If they do crash then at least you done all you could.

Does it really matter if they go into negative equity - I dont think they will be paying attention to the prices - they'll be getting along with their lives...

It is you - without a home like the rest of us, being fixated on prices going up or down to the nearest pound.... ;)

I see your point. If they can afford the repayments, and are happy to pay them for 25 years then prices makes no odds to them. I guess the minority of people lose their homes in a crash. Most will carry on paying and push through it.

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Of course if / when a crash becomes apparent loads of people will get burnt.

Smokers will give you dozens of reasons why they 'enjoy' smoking however ones that have kicked the habit realize the only reason they smoked was because they were addicted. Recent FTB's excuses of 'having to buy a house' and 'why the crash won't affect me' will prove just like the excuses for smoking - utter rubbish. I would say the majority of recent FTB’s are pretty screwed locked into houses they can barely afford on historic low IR and are relying on HPI to get them out of the mess.

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I would say the majority of recent FTB’s are pretty screwed locked into houses they can barely afford on historic low IR and are relying on HPI to get them out of the mess.

How high do you think the rates will have to go before people REALLY start to feel the pinch? 0.5%? 1%? 4%?

I think only as little as 1% personally.

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One thing that has surprised me this time, is how many people have made the same

Mistake again. One of my friends is mortgaged up to his eyeballs, he has a lovely

House (4 bed detached) something he always dreamed of owning.

In the 90’s he considered ‘dropping the keys’ to a flat he was buying because

Of interest rates were crippling him. He sold the flat only 4 years ago

After renting it out over that period of time.

Now his wife has gave-up work to look after their daughter.

I don’t know how much he is paying on the mortgage.

(although stress is obvious on his face) I know it’s a self-cert.

He’s a salesman so he doesn’t have a steady regular income.

I’ve spoke to him in the past year about house prices going down

But he’s one of those that don’t want to listen if it’s something

They don’t want to hear.

He is not a bad person, I fear he's in for a rough ride. :(

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How high do you think the rates will have to go before people REALLY start to feel the pinch? 0.5%? 1%?  4%?

I think only as little as 1% personally.

Exactly...

Roger Bootle once said that recent home owners haven't been able to take advantage of low interest rates because they have borrowed more and are therefore more exposed to interest rate increases than ever before.

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Contrary to the original post I want the economy to be squeezed as much as possible. I want the oil fiasco to continue and for all the rises in energy costs to accumlate and squeeze the indebted to the point of having to sell their properties QUICKLY.

Only then will we see a true crash.

Bring on the pain. This is a war of attrition that the savers amongst us have been preparing for.

(I'm a bad man. A bad bad man.)

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(I'm a bad man. A bad bad man.)

No worse than the slavering herd who have been cheerleading the price rises of the last few years that have priced-out an entire generation.

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Contrary to the original post I want the economy to be squeezed as much as possible. I want the oil fiasco to continue and for all the rises in energy costs to accumlate and squeeze the indebted to the point of having to sell their properties QUICKLY.

Only then will we see a true crash.

Bring on the pain. This is a war of attrition that the savers amongst us have been preparing for.

(I'm a bad man. A bad bad man.)

Unfortunately job security then becomes an issue for everyone, not just the ones with large mortgages.

Rather than wishing for a HPC (and the unavoidable recession), I just see it as inevitable and try to plan for it.

Edited by fdk

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I want prices to fall so I can get on the ladder, escalator, elevator, or whatever you like to call it. But if they do my friends lose out.

Hate to state the obvious, but let me spell it out for you: Low Prices = Good,

High Prices = Bad. If prices go down it's better for your friends too, they can trade up more easily.

I bought my house in cash, but if I had a mortgage negative equity is exactly where I'd want to be.

So sit back and enjoy the crash.

HTH

Tharg.

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Caught in the grips of a basic biological dilema! This appears to me to be a perfect example of the constant struggle between altruism and self-interest in the perpetuation / advancement of the species. :unsure:

Edited by Elizabeth

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Caught in the grips of a basic biological dilema!  This appears to me to be a perfect example of the constant struggle between altruism and self-interest in the perpetuation / advancement of the species. :unsure:

Really lizzy? i just think f*ck um.

Psst emporer you will be able to buy some new friends.

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Really lizzy? i just think f*ck um.

Psst emporer you will be able to buy some new friends.

Chuz, I don't believe I have been introduced to you as Lizzy. I like to keep it formal on this forum (being the serious bod that I am :lol::lol::lol: ) NOTE: Not Lizzy, Elizabeth!

Edited by Elizabeth

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Chuz, I don't believe I have been introduced to you as Lizzy. I like to keep it formal on this forum (being the serious bod that I am :lol:  :lol:  :lol: ) NOTE: Not Lizzy, Elizabeth!

Yes, right you are mam, let me dust myself off and remember my cordiality, ill try harder in the future Ms liz

:P

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Hate to state the obvious, but let me spell it out for you: Low Prices = Good,

High Prices = Bad. If prices go down it's better for your friends too, they can trade up more easily.

I bought my house in cash, but if I had a mortgage negative equity is exactly where I'd want to be.

So sit back and enjoy the crash.

HTH

Tharg.

Not if they bought in the last few years..

i.e paid 150K for a 1 bed sh*tpit which turns out to be worth 75K 18 months later, not many people especially the idiots that pay 150K for a sh*tpit will be able to find 75K to bail themselves out.

but if I had a mortgage negative equity is exactly where I'd want to be.

:blink: ehh?

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I feel no guilt what so ever about hoping for a housing crash, prices at the moment are crazy and need to return to sencible levels.

The house next door has gone from £70K in 2000 to £133k in 2003. Not to talk down my area but it's just not worth that sort of money, it's a mid terrace with a tower block to the back and a garage at the front (not exactly prime real estate).

I've spoke to the guy a few times, he seems nice and all and I'd hate to see anyone fall on hard times. But he made the choice to buy when prices were surging, if prices should fall then he has to live with the consequences of his actions. No one made him buy.

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... But he made the choice to buy when prices were surging, if prices should fall then he has to live with the consequences of his actions.  No one made him buy.

You guys are all soooooooo harsh. I guess self-interest is in the accendancy over altruism :rolleyes::rolleyes:

Ms Liz

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Harsh? I think not.

Anyone who bought in the last 2 years and overstretched themselves and/or bought into the whole housing ladder philosophy is extremely dumb in my opinion and must have done next to no research into the biggest financial commitment of their lives.

Anyone who bought before then will have see their property rise in value and will only be in trouble if they MEW'D themselves silly. In which case, they deserve what they get.

I want interest rates to SURGE. Bring it on. I'm a frugalista who can handle big mortgage repayments.

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You guys are all soooooooo harsh

Yes, it is very harsh to wish for prices to keep rising forever isn't it, in the process pricing out an entire generation of young people.

I guess self-interest is in the accendancy over altruism

Yes, it is very selfish isn't it, to buy up hundreds of properties, hoping to create an artificial scarcity of property and thereby driving up prices, exploiting hardworking FTB's who just want a home of their own. I agree.

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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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