apom Posted December 1, 2005 Share Posted December 1, 2005 A large amount of debt is now held by people in their 20's and 30's.. Speculation that people are waiting for prices to drop does not reflect how many out there now hold too much personal debt to embrace a mortgage. The debt crisis has not only hit homeowners.. Who out there believes that most out there waiting to buy would be in a financial position to do so even at normal house prices?? Has the debt burden started to cripple the market for people who have not even entered it yet...?? You can't argue that in times of managed low inflation that those holding massive interest only mortgages are not doomed.. but those who don't... are they also saturated in debt? Quote Link to comment Share on other sites More sharing options...
2005 Posted December 1, 2005 Share Posted December 1, 2005 A large amount of debt is now held by people in their 20's and 30's.. Speculation that people are waiting for prices to drop does not reflect how many out there now hold too much personal debt to embrace a mortgage. The debt crisis has not only hit homeowners.. Who out there believes that most out there waiting to buy would be in a financial position to do so even at normal house prices?? Has the debt burden started to cripple the market for people who have not even entered it yet...?? You can't argue that in times of managed low inflation that those holding massive interest only mortgages are not doomed.. but those who don't... are they also saturated in debt? Personally I think that the banks switching to calculating mortgages on affordability rather than income multiples will decrease the amount people can borrow rather than increase it. People now have so much debt that if this was taken into account when they apply for a mortgage many will find they can borrow less than they could on income multiples. So to answer your question I think that there are now less people who are in a position to enter the market than before because they are prohibited by debt. Quote Link to comment Share on other sites More sharing options...
Maynard Posted December 1, 2005 Share Posted December 1, 2005 A large amount of debt is now held by people in their 20's and 30's.. Speculation that people are waiting for prices to drop does not reflect how many out there now hold too much personal debt to embrace a mortgage. The debt crisis has not only hit homeowners.. Who out there believes that most out there waiting to buy would be in a financial position to do so even at normal house prices?? Has the debt burden started to cripple the market for people who have not even entered it yet...?? You can't argue that in times of managed low inflation that those holding massive interest only mortgages are not doomed.. but those who don't... are they also saturated in debt? It does appear that most people, home-owners or not, are carrying an increasing amount of un-secured debt. Personally, I owe very little on my credit card and in the past year have managed to save a good chunk of my disposable income. I'm am just about to take a nice pay rise, so effectively, i could go out tomorrow and buy a 1 bed flat with a 95% mortgage, but no way! That would mean i'd have to borrow about 5 times my income! I'll hold out for another year or two, have a very nice deposit and wait until someone is begging me to buy their home! I'm only 21, so i'm not in a great hurry. Quote Link to comment Share on other sites More sharing options...
large Posted December 1, 2005 Share Posted December 1, 2005 Personally I think that the banks switching to calculating mortgages on affordability rather than income multiples will decrease the amount people can borrow rather than increase it. People now have so much debt that if this was taken into account when they apply for a mortgage many will find they can borrow less than they could on income multiples. So to answer your question I think that there are now less people who are in a position to enter the market than before because they are prohibited by debt. Not if they lump their debt onto the mortgage. Their only repayments would be mortgage. Sentiment is what will ultimately drive the market down, if people are desperate to buy, they will always find a way. Sentiment has been neutral for a year, the economy is not looking good if the high street is a good indicator, so by the middle of next year sentiment will go very negative. I do think less 20s and 30s are interested in buying a house, even when the market is in neutral mode. If the idea that house prices are going to rise a little or hold steady for the next few years gets into the national psyche, people are going to be less desperate to get on to the ladder. This will lead to an even greater slackening in demand and eventually help push prices down, then of course even less buyers want in. That's when it nose dives as investors rush to get out and all the BTLers who have empty flats crap themselves. Quote Link to comment Share on other sites More sharing options...
defweb Posted December 1, 2005 Share Posted December 1, 2005 (edited) im 24 and could afford to buy but im waiting on the sidelines. i have 50k savings and earn 28k. i only have student loan debt of about 10k which takes £100 per month from my salary but unnoticeable. id be willing to get a mortgage of £110k at about 4 times earnings which is the max id go to. now this gives me £160k but the properties i like are closer to 200k. when it comes within reach i will go for it depnding on future pirce expectations of course. im not about to waste my hard earned savings Edited December 1, 2005 by defweb Quote Link to comment Share on other sites More sharing options...
large Posted December 1, 2005 Share Posted December 1, 2005 im 24 and could afford to buy but im waiting on the sidelines. i have 50k savings and earn 28k. Well done for saving so much by the time ur 24. How did you do it? Quote Link to comment Share on other sites More sharing options...
Maynard Posted December 1, 2005 Share Posted December 1, 2005 im 24 and could afford to buy but im waiting on the sidelines. i have 50k savings and earn 28k. i only have student loan debt of about 10k which takes £100 per month from my salary but unnoticeable. id be willing to get a mortgage of £110k at about 4 times earnings which is the max id go to. now this gives me £160k but the properties i like are closer to 200k. when it comes within reach i will go for it depnding on future pirce expectations of course. im not about to waste my hard earned savings Have you been to view any houses as yet? Although there is no way I would pay these ludicrous prices, I am thinking about going to view a few this weekend, get a taster and see how desperate people are to sell. I think houses are overvalued by at least 30%, I think a vendor will swing for me if I said that to their faces! Any advise? Quote Link to comment Share on other sites More sharing options...
2005 Posted December 1, 2005 Share Posted December 1, 2005 Have you been to view any houses as yet? Although there is no way I would pay these ludicrous prices, I am thinking about going to view a few this weekend, get a taster and see how desperate people are to sell. I think houses are overvalued by at least 30%, I think a vendor will swing for me if I said that to their faces! Any advise? No advice sorry. But if you do this I would be very interested to see how you get on. I have been thinking about testing the water. I have got no intention of buying yet but would be interested to know just how desperate things are. There are three houses near me that have been on the market for ages without shifting. 2 have now lowered there price (one by £10K) but I still think it is too early to make an offer of 20/30% below the asking price. Things may change in the new year though Quote Link to comment Share on other sites More sharing options...
A late entrance.. Posted December 1, 2005 Share Posted December 1, 2005 I've been thinking the same - about going out and seeing what kind of discount I could get but there are some really conflicting issues as far as timing goes: 1. Wait too long and interest rates will have crept up, including any long-term fixed deals however prices may go down further at the same time. 2. Step in too soon and that healthy deposit gets wiped out, therefore it's only worth committing to this if you either want to stay in one place for years or are convinced that the bottom has been reached. My situation is £25k deposit, £22k salary and zero debt. I'm half tempted to try and find some kind of balance between prices falling (i.e. when offering below 2004 peaks is taken as read rather than 'pushing it') and interest rates on the up, then take out 3.5x earnings on a 5% odd 25 year fixed rate. However this is only worth it if interest rates go up fairly significantlly. Quote Link to comment Share on other sites More sharing options...
Michael Posted December 1, 2005 Share Posted December 1, 2005 They're..................abbreviation of ''they are''........................... Their.....................possessive pronoun.............................. There.....................over there/there is................................. Quote Link to comment Share on other sites More sharing options...
Maynard Posted December 1, 2005 Share Posted December 1, 2005 They're..................abbreviation of ''they are''........................... Their.....................possessive pronoun.............................. There.....................over there/there is................................. Mr. English teacher, to which post are you referring? It is nice that you are taking an interest in peoples' grammar. You must be bored! Quote Link to comment Share on other sites More sharing options...
OzzMosiz Posted December 1, 2005 Share Posted December 1, 2005 (edited) im 24 and could afford to buy but im waiting on the sidelines. i have 50k savings and earn 28k. i only have student loan debt of about 10k which takes £100 per month from my salary Fair play to you buddy - thats pretty impressive! IF you can save like that by the time you're 24, you may as well keep saving and buy a decent place outright by the time you're in your early 30s Edited December 1, 2005 by OzzMosiz Quote Link to comment Share on other sites More sharing options...
FreeNapoleon Posted December 1, 2005 Share Posted December 1, 2005 I, for one, have had enough. STS (Sold to Squat) 2002. Underestimated HPI and have run out of patience. Leaving the sinking ship. Italy, maybe...lovely grub and the natives are friendly, (unless you're Albanian ). I'll miss London, but will return when, and if, the nonsense stops Good luck & keep your udders out of this cold weather! Quote Link to comment Share on other sites More sharing options...
Adam Posted December 1, 2005 Share Posted December 1, 2005 I'll hold out for another year or two, have a very nice deposit and wait until someone is begging me to buy their home! Be careful that you're not in the upward blip in an ever decreasing market. I think 4-6 years would be more realistic - Quote Link to comment Share on other sites More sharing options...
Adam Posted December 1, 2005 Share Posted December 1, 2005 What about this one? Sorry Durch, something is wrong with the image you posted, can you post it again please? Thanks Quote Link to comment Share on other sites More sharing options...
jellybean Posted December 1, 2005 Share Posted December 1, 2005 What about this one? Ah yes, it wont happen here though, because.... we dont eat raw fish. Quote Link to comment Share on other sites More sharing options...
Adam Posted December 2, 2005 Share Posted December 2, 2005 (edited) What about this one? EDIT: Hope this works Adam. Thanks durch, it works for me now. Excellent graph! I just think there might be an upward blip at about the time you label "Never a better time to buy". Unless too much credibility has been lost at that point, I can see people believing the propaganda. And I LOVE sushi! As for my 4-6 year estimate, this is probably optimistic, but I'm prepared to reasses that every day and wait until its a good market FOR ME. If that takes 10 years - so be it - I'm not working to any strict timetable here. Edited December 2, 2005 by Adam Quote Link to comment Share on other sites More sharing options...
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