Some House Price/mortage Size/possible Equity Anecdotes

[lorna1999]

http://www.mumsnet.com/Talk/am_i_being_unreasonable/1298028-So-nosey-but-whats-it-worth

It is interesting just to see the differences in finacial situations between those who bought 1990-2002-ish compared to those who bought more recently. Lots of people recognising their houses are worth less now than a couple of years ago. At least one who has sold in NE. Fair amount of realism I would say?

[Terribad]

Easy to be honest about things when its the husband losing money

[Diver Dan]

Easy to be honest about things when its the husband dh losing money

Corrected for you.

[Redcellar]

http://www.mumsnet.com/Talk/am_i_being_unreasonable/1298028-So-nosey-but-whats-it-worth

It is interesting just to see the differences in finacial situations between those who bought 1990-2002-ish compared to those who bought more recently. Lots of people recognising their houses are worth less now than a couple of years ago. At least one who has sold in NE. Fair amount of realism I would say?

I read the top few and saw the usual delusion, not what you were saying. "My house is worth X" with X being more than what they bought it for, but they haven't sold it.

Edited September 12, 2011 by Redcellar

[Dorkins]

Amazing the number of people on there who bought 15 or 20 years ago and owe almost the same or actually more on the mortgage now than they paid at the time. They wouldn't know what a mortage repayment was if it punched them on the nose.

Edited September 12, 2011 by Dorkins

[Timak]

For all the "baby boomers stole my money" threads it would seem those who are now in their early 40's had a pretty reasonable run of things with the lowest point of the market being when they were 25ish and wages were still pretty reasonable.

Edited September 12, 2011 by Timak

[Bloo Loo]

Corrected for you.

dh = dumb half?

[Dorkins]

For all the "baby boomers stole my money" threads it would seem those who are now in their early 40's had a pretty reasonable run of things with the lowest point of the market being when they were 25ish and wages were still pretty reasonable.

From a generational perspective, those now in their 40s (the Krusty generation) have big mortgages owed to those in their 60s who are close to or in retirement. ZIRP is good for those 40somethings but harms 60somethings through poor yields and 20somethings through keeping house prices artificially high.

[Si1]

For all the "baby boomers stole my money" threads it would seem those who are now in their early 40's had a pretty reasonable run of things with the lowest point of the market being when they were 25ish and wages were still pretty reasonable.

in UK demographics the baby boom lasted until about 1970, which makes people in their ealry 40s late stage baby boomers

[19 year mortgage 8itch]

They wouldn't know what a mortage repayment was if it punched them on the nose.

Aren't you supposed to buy a house, pay as little as possible to 'service' the mortgage, spend the equity as it doubles in price every 10 years and then when you retire, sell it for enough to pay off the mortgage, buy a smaller place outright and have enough left over for an all-inclusive holiday in the Carribean?

I think its called an Entitledto mortgage.

Edited September 12, 2011 by anotherpointlessnamechange

[rantnrave]

From a generational perspective, those now in their 40s (the Krusty generation) have big mortgages owed to those in their 60s who are close to or in retirement. ZIRP is good for those 40somethings but harms 60somethings through poor yields and 20somethings through keeping house prices artificially high.

Those I encounter out there who seem the least affected by house prices are those in their 40s. Bought in the 90s, gifted lots of equity and kids are too young at the moment to leave the nest (thus not needing the BOMAD and / or living with their parents past their welcome). This lot trading family sized homes amongst themselves are keeping the indices from falling further IMO.

EDIT TO ADD: How many members of the cabinet are in their 40s?

Edited September 12, 2011 by rantnrave

[Dorkins]

Those I encounter out there who seem the least affected by house prices are those in their 40s.

Yes, they are the sacred cows that no government dare send to slaughter, no matter how much it would benefit the generations above and below. Probably the political parties have decided they are core swing voters or something.

Edit: Also, Cameron is 44, and Osborne is 40.

Edit again: Ha, we had the same thought.

Edited September 12, 2011 by Dorkins

[Si1]

Yes, they are the sacred cows that no government dare send to slaughter, no matter how much it would benefit the generations above and below. Probably the political parties have decided they are core swing voters or something.

Edit: Also, Cameron is 44, and Osborne is 40.

Edit again: Ha, we had the same thought.

additionally the last of the generations to get good final sal pensions, and also the last generation not to have suffered student debts

Edited September 12, 2011 by Si1

[rantnrave]

My boss (early 40s) just moved from an average three bed semi (with loft conversion) to a very nice four bed detached. Another colleague (49) cannot understand why I haven't bought - he even had the cheek to leave a copy of recent copy of the Express with price ramping headline on my desk. Grrr. I consider it my duty to point out to both of them that the 16 year-olds they each have are going to be asking them for £27K each soon. Apart from that, we get along fine...

[Si1]

My boss (early 40s) just moved from an average three bed semi (with loft conversion) to a very nice four bed detached. Another colleague (49) cannot understand why I haven't bought - he even had the cheek to leave a copy of recent copy of the Express with price ramping headline on my desk. Grrr. I consider it my duty to point out to both of them that the 16 year-olds they each have are going to be asking them for £27K each soon. Apart from that, we get along fine...

they totally fluked it with housing wealth gains and now they think they are Professors of Finance

they tend not to have anything else apart from housing wealth, for the large part, however

[rantnrave]

they totally fluked it with housing wealth gains

There's more - the older one was trying to move in 2008. He sold his place at close to peak prices, but there were last minute complications in the place they had bought. Caught between a rock and a hard place, they rented the new place until it became obvious that the legal issues involved weren't going to be resolved quickly. So, they found another house to buy, but by then prices were at the bottom of the 2009 trough. This gave them an unexpected windfall of £25K, which with their accidental STR fund allowed them to buy an even nicer place than they had imagined possible. None of this was planned or done through market analysis. He's not complaining though.

[Si1]

There's more - the older one was trying to move in 2008. He sold his place at close to peak prices, but there were last minute complications in the place they had bought. Caught between a rock and a hard place, they rented the new place until it became obvious that the legal issues involved weren't going to be resolved quickly. So, they found another house to buy, but by then prices were at the bottom of the 2009 trough. This gave them an unexpected windfall of £25K, which with their accidental STR fund allowed them to buy an even nicer place than they had imagined possible. None of this was planned or done through market analysis. He's not complaining though.

this betrays their stupidity, that is, owning a property is financially beneficiasl because it saves you paying rent

simply buying a much nicer place than you were expecting with the windfall does not increase the simple value you get, because you're not saving any rent in this case

so they took their 25k windfall and significantly reduced the value of it, which is pretty stupid

however, en masse they will probably vote for whichever political party most screws over later generations in their favour, so maybe they will win whatever they do, seems to be the case

Edited September 12, 2011 by Si1

[miko]

There's more - the older one was trying to move in 2008. He sold his place at close to peak prices, but there were last minute complications in the place they had bought. Caught between a rock and a hard place, they rented the new place until it became obvious that the legal issues involved weren't going to be resolved quickly. So, they found another house to buy, but by then prices were at the bottom of the 2009 trough. This gave them an unexpected windfall of £25K, which with their accidental STR fund allowed them to buy an even nicer place than they had imagined possible. None of this was planned or done through market analysis. He's not complaining though.

Yes it is just the way the cookie crumbles as they say.

I know a few people who have done well by chance and others who fked up making the wrong move at the wrong time.

A couple I knew years ago were moving at the top of the last peak . The people they were buying from pulled out but they decided to sell their flat anyway as it had taken ages to find a buyer even in the 80's boom. They decided to rent and buy the following year. Then he lost his job so they had to put buying on hold . By the time they were ready again the market was in free fall so they sat back and waited a few years earning great interest on their money , they then bought a much better house than they would ever have imagined.

But for every good tale there is a bad I also knew many who bought in that last peak and sat in NE for years .

[rantnrave]

There's a regular on EA Today who is in his 40s and very pro BTL. He admits that his last purchase, in 2007, is now in negative equity. Another poster (one of us?) used that point to hit home that this guy didn't really know much about market timing but had just been born at the right time...

Edited September 12, 2011 by rantnrave