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apom

So The Influence To The Ftb's..

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Where is it from and why do they listen. They need our protection and help, not our scorn

This is a better explained second attempt.

On here much scorn is poured on the bullish press releases..

sipp's, as soon as that was announced to have been pulled prior to christmas VI experts set up residence at the BBC news desk to explain how the market was "ready for an upswing" and "healthier" the soft landing was replaced by "set for price rises next year"

We were expecting this, seeing as a major chunk of potential buyers have just been pulled out of the market now seemingly swamped with new builds that BTL mortgage providers are reticent to lend against.

We were expecting this so we did not listen, we were angry that they should be given such a platform.

Why do they lean toward the VI's?

The quote

"On balance the views of the country's largest mortgage lender are of

more importance than that of a group of City economists - although both

are worth reporting."

Was from a BBC program manager.. more can be seen in this thread..

http://www.housepricecrash.co.uk/forum/ind...opic=21553&st=0

I see the boom as over and the crash begining, personally I will be happy to buy in a few years and don't particually want to now even if I could justify the current cost, even if we were a the bottom of the cycle now I would buy, but I would rather have the bottom in about three years.

I was angry as it would convince those less "educated" (not fair to call them uneducated.. not the phrase I want.. perhaps less aware of the facts that we are privy to...)

It would convince people to buy at a time where it could lead them to make perhaps the worst finacial decision of their lives.

so the press shapes opinion? it does.. and I would be niave to think otherwise, but opinion is no longer fact.

It geared the market through the boom, but economic factors have ended the boom where sentiment has failed to do so.

and this is where the input these young buyers is also swayed by innacurate but well meaning advice from their peers.. I will not again refer to them as "boomer bears" that way leads to misunderstanding.

I refer to the older generation, some of whom will see a bullish approach.

Why would they see things in a bullish light?

Essentially if you are now in the last decade of your 25 year mortgage you have seen the price of your property soar and the mortgage cost plummet against your salary which has been inflated by salary and even promotion.

the older generation would have seen house buying as almost a crippling cost as they bought, but a cost that dropped over a few years.

Why did the cost drop?

Three reasons.

1: People used to buy earlier, making thei purchase at a point in their career where they could expect their salaries to rise with age as they moved up whatever ladder that their profession offered. Now as people enter the market later, into their early to mid thirties,they are doing so at a point where (for the most part) they have become as senior as they could hope to be.

2: People bought at a time when inflation was higher, and if you could see 5% a year rises in your salary this is reducing the cost of your mortgage year on year, I know that inflation has not always been this high but it has always been higher then it is now. I have had significent wage rises due to seniority changes, but none to inflation/

3: Interest rates were higher, so the cost was large but as the capital was smaller (interest making more of a chunk) inflation hit the "smaller" capital faster then even inflation of old levels could today against massive capital borrowing..

So, when they look back they do remember hardship and struggle, but they also remember that things became easier. This advice and wisdom has been prevalent.. "It is always hard when you start, but it gets easier" used to be good advice...

Now it should be.. "don't let it be too hard when you start, its not going to get easier, its different now.. If you struggle now against an interest only mortgage there is no reason why this will become easier and you will ever be able to switch to repayment. You are borrowing more geared toward a cost to you relying on below average interest rates."

What scares me is that many are entering the market with their salaries as high as they can expect them to be and with minimum inflation to even give that boost. People are entering the market with a higher debt against salary they ever could have been imagined years ago.. and none of the old engines are running to ease this debt. 7-9 times salary against an interest only mortgage is more common then you could imagine.. the amounts lent against "Income non verified" mortagages providing this engine to the market.

FTB's are entering the market convinced that it can only go up and taking on debt that they will struggle just to pay the interest against at a time where I believe that there are not enough buyers left to sustain the market.

With sipps gone, BTL falling of and most FTB's priced out to the extent that we shall see the market stall and collapse over the next year (my opinion) whatever the overall opinion.. we are seeing the last of the "misguided few" enter into what they percieve to be their only chance of a future but in reality what is actually a debt millstone that they can only carry for a short time, but one that will shape their entire lives..

To this end, the perception of the market has geared it to impossible heights, the freedom of credit either official or fraudulent has helped the boom even higher.. and all of this at a time of low managed inflation..

look toward the notes that appear at the bottom of my posts and to what Mervin King himself said about low inflation and house prices.

Remember, house prices are a matter of opinon, but debt is real.

http://www.austinmitchell.org/modules.php?...=article&sid=69

Edited by apom

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Please, when I say I feel bad for those buying now as FTB's I refer to those who are entering vast debts they cannot sustain..

It breaks my heart.

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Where is it from and why do they listen. They need our protection and help, not our scorn

I have been thinking just for the last couple of days about influences on buyers (its not really just ftbs stretching themselves some are moving onto the next rung of the property ladder at just as great a risk).

I realised that the influences that buyers don't have are just as important as the ones they do have.

So while endless property programmes do provide a biased influence equally we should consider the lack of education about finances, the economy and indeed the political system.

Occasionally the press will report the shocking news that some of the people taking on credit card debt don't even know what APR means. My response would be well why should they? Its not as if financial terms are part of the national curriculum, where and when and how did you expect them to learn? What turns a clueless school leaver into someone with a good grasp of finance and economics?

I could argue that finances and economics should be part of the national curriculum but I know that many on here will say, the nanny state can't take care of everything - if people are not prepared to do some research before they make a financial decision then they will pay for their laziness.

But wait a minute.

The economy of the country is at least partly in the hands of the national government - and the choice of national government is in the hands of the voters.

If voters were educated about economics isn't it possible that the country would have a better chance of returning a more responsible government?

Yes, people have to take responsibility for their own lives but hasn't everyone on here who is responsible with their finances felt at times that their responsible behaviour would be better rewarded if the economy had been governed better?

Doesn't it then follow that if you want savers to be rewarded and big spenders (on credit) to be held properly responsible for their behaviour that you need to have a government and a society where finances and economics are widely understood as a result of a sound education in these subjects?

FTBs need positive influences and education to see through basic spin and poor advice, this website provides a small beginning but more is needed.

Edited by underpressuretobuy

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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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