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The Masked Tulip

Pop, Baby, Pop

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Priced-out home buyers are cheering for a crash. But what will the cost of waiting be if it never comes?

Pop, Baby, Pop

expect some of this in the next year as the crash unfolds. No doubt this site will be namechecked and the posters ridiculed as lunatics by quoting some of the more outlandish stuff. :rolleyes:

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Notice the last bit - subtly inferring that not to buy now will mean you will have your faces pressed against the shop window - like they did. But now they're fine cos they bought in time - 6 YEARS AGO - look mate, if you had to stretch yourself 6YEARS AGO then surely you can see things are impossible now!! ANd surely if you will have trouble affording a mortgage when interest rates rise then you'll be better off waiting until the asking price drops?

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Priced-out home buyers are cheering for a crash. But what will the cost of waiting be if it never comes?

Pop, Baby, Pop

Interesting, but remeber that in the US it is still common to have long term fixed rate mortgages (rather than the 5 or less years fixed reverting to variable typical of the UK). In such a scenario affordability is more a function of interest rates than asking price.

In the UK this is different. The difficulty to secure at a decent rate a "real" fixed rate mortgage means that almost everyone has a variable rate mortgage. Most people in the UK don't care (or are just too ignorant) to analyse how a change in futures rates will affect monthly payments.

I believe that we have four types of buyers.

1) the truly rich/loaded ones (they buy when they like something regardless of prices)

2) the ones that can afford a mortgage provided that rates don't climb in the next 10 years (I believe that this is the majority of buyers and include many BTLs)

3) the ones that can afford to buy at current interest rates but are intelligent/informed enough to understand the risk they would be taking (and therefore rent).

4) the priced-out people (they can't afford to buy at current prices regardless of their risk appetite)

If you are in the last category the only thing that you have left is hope (that prices crash by 20 to 30% in nominal terms). If the crash doesn't materialise social unrest is likely to happen....

Any comments?

Edited by jacob

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If you are in the last category the only thing that you have left is hope (that prices crash by 20 to 30% in nominal terms). If the crash doesn't materialise social unrest is likely to happen....

Any comments?

I think social unrest will happen even if you are not in the last category. There are a lot of young buyers (<30) who are gettingn increasingly peed off and eventually society will snap if the house prices dont!.

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  • 335 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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