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Moneyweek Today

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Excellent summary of where we are at

How to tell if you're spending too much on property

So if you are planning to buy a house regardless, how can you avoid making a disastrous mistake?

The Sunday Times provides a good example of what not to do. It recounts the tale of a 20-something first time buyer. The woman in question is saddled with student debt and an overdraft, but has still taken the decision to buy a property.

“It is hard enough buying now because property is so expensive, but if I waited until my debts were all cleared it would be even worse because prices would have risen further,” she says.

So how can this debt-laden first time buyer afford to make her first step onto the property ladder? Simple, of course – her parents are coughing up the deposit.

And what about covering the mortgage payments? Well, she’s planning to rent out a room. “Providing I don’t have any problems finding a lodger, it shouldn’t cost me any more each month…than the rent I’m paying at the moment.”

There are a few simple points about affordability that can be picked out of this story. Firstly, if you have to rely on your parents to help you buy a house, that means you can’t afford it. Secondly, if you also have to rely on getting a lodger so that you can make the monthly repayments, that means you really can’t afford it.

The reason that buyers like this (and their parents) are willing to overstretch themselves so dramatically is that they are scared they will be left stranded by further price increases.

But when people are buying into an investment because they are afraid that they’ll miss the bus if they don’t, that’s usually a sure sign that the market has reached its peak. And under those conditions, it’s more important than ever to make sure that you have plenty of room to breathe in case house prices fall, or your mortgage payments rise.

Because although many people seem to have forgotten it, house prices actually go down as well as up. And there are strong reasons to believe that house prices will resume their downward trend later this year.

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Spot on..

Prices always go up...?

Well yes.. now... that's because we are at the top of the biggest boom...

If you measure it to the bottom.. they also go down..

simple..

Less vat in 2005 then in 2004..

Doomed.. doomed I tell you

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*ahem bump ahem* :D thought it was worthy.. especially this bit:

'Because although many people seem to have forgotten it, house prices actually go down as well as up. And there are strong reasons to believe that house prices will resume their downward trend later this year.'

:ph34r:

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*ahem bump ahem* :D thought it was worthy.. especially this bit:

'Because although many people seem to have forgotten it, house prices actually go down as well as up. And there are strong reasons to believe that house prices will resume their downward trend later this year.'

:ph34r:

Bloody liars - House prices ever go up - I know that 'cause an Estate Agent told me so! :lol::lol::lol:

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Hmmm...

Is it any coincidence that someone stupid enough to buy a house when they're saddled with debt, who thinks it's a good idea to drag their parents into it, and can only afford the repayments if they get a lodger in, also believes that house prices are bound to rise further?

No, definitley not a coincidence... All thoughts and actions associated with stupid people!

Edited by Bingley Bloke

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Excellent summary of where we are at

Moneyweek has been publishing articles like this repeatedly for at least 18 months now; Don't doubt they'll be proved right eventually, but for the time being take with a pinch of salt.

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Guest Baffled_by_it_all

Taken with a pinch of salt?

What so it's a good idea to take out a mortgage if you're up to your neck in debt and can't actually afford the repayments without help from your parents or a lodger?

Seems like good advice to me. Although those of us unwilling to get saddled with a mountain of debt seem to be the foolish ones. After all we've 'missed the boat' and everyone else is getting rich, rich, rich!!!

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I was questioning the suggestion that the market has reached its peak - Moneyweek has been calling the top for 18 months.

To date, the market has proved remarkably resilient :)

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I was questioning the suggestion that the market has reached its peak - Moneyweek has been calling the top for 18 months.

To date, the market has proved remarkably resilient :)

Those parts that haven't dropped in value, been on the market for a year or so, are in negative equity, been repossessed or purchased with 8x salaries/early inheritance/125% mortgages, yes, those are right as rain :)

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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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