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Libertine

Crash.....boom....rise....fall.....up.....down.....

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Finding all these contradictory headlines are a bit bamboozling ??? May I direct you to the newspaper clippings from the previous crash....

You spin me right round, baby, right round...

.....there was total confusion then too !!!

Jeez - just chill out !! If you think prices are gonna keep rising then go and but somewhere (Good Luck ;) ). If not, sit back and keep the faith.

FWIW, I've never been more convinced that we're on the brink.

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Guest The_Oldie

Finding all these contradictory headlines are a bit bamboozling ??? May I direct you to the newspaper clippings from the previous crash....

You spin me right round, baby, right round...

.....there was total confusion then too !!!

Jeez - just chill out !! If you think prices are gonna keep rising then go and but somewhere (Good Luck ;) ). If not, sit back and keep the faith.

FWIW, I've never been more convinced that we're on the brink.

I agree 100% with the above post.

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I also think confusion is our friend. For people to start saying "no" to current house prices it's not necessary for potential buyers to think that prices are going to go down. It's enough for them to be unsure what will happen.

Billy Shears

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Unless you see meteoric rises of 10% + , I find it more useful just to ignore headlines like todays.

The fact is, where I am, houses are not selling - well - some are, but are taking incredibly long time periods to complete. I know personally of two people who cannot sell their homes, and it's just not down to breaking chains,some - are just not getting any viewings. A mate of mine who intends to sell soon is so sure of a quick sale, because, that's how it's always been on her particular road. Sadly she is oblivious to the fact that the last completion on her road was November 2005.

To anyone thinking about jumping aboard the housing bandwagon, think again - the party's over. ;)

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Finding all these contradictory headlines are a bit bamboozling ??? May I direct you to the newspaper clippings from the previous crash....

You spin me right round, baby, right round...

.....there was total confusion then too !!!

Jeez - just chill out !! If you think prices are gonna keep rising then go and but somewhere (Good Luck ;) ). If not, sit back and keep the faith.

FWIW, I've never been more convinced that we're on the brink.

Totally agree. The outlook for IRs are much more in our favour when compared with the begining of the year and the bankruptcy data also points towards serious trouble ahead.

These prices cannot be sustained.

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Can I ask a question or two of you lot that are sat like vultures waiting for a crash.

Do you have a large amount of cash set aside for the deposit ? Do you REALLY think that the cost of the loan will go down if interest rates rise ? Are you all thinking that prices will fall by so much that even given laying our more interest monies that long term you will make a net saving ?

Say on a £200K property today, what price post crash, what deposit and mortgage do you expect to be having to fund ? At what cost per month would you say is reasonable on say a combined £40K income..... ?

I really would be interested to hear what you think as I don't think (from what I have read) many of you have thought through what higher interest rates will mean for you unless you have A LOT squirrelled.

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Can I ask a question or two of you lot that are sat like vultures waiting for a crash.

Do you have a large amount of cash set aside for the deposit ? Do you REALLY think that the cost of the loan will go down if interest rates rise ? Are you all thinking that prices will fall by so much that even given laying our more interest monies that long term you will make a net saving ?

Say on a £200K property today, what price post crash, what deposit and mortgage do you expect to be having to fund ? At what cost per month would you say is reasonable on say a combined £40K income..... ?

I really would be interested to hear what you think as I don't think (from what I have read) many of you have thought through what higher interest rates will mean for you unless you have A LOT squirrelled.

I expect to eventually to be able to buy on 4 times my salary. Currently it is 6 ish... But, if prices did stagnate for long enough my increased deposit would reduce the required mortgage.

Although, I don't think long term stagnation is a possibility. The greed of the public shown in the last 6-9 months will be the downfall imho.

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Prices go down as cost of borrowing goes up. Plus over lifetime of the loan, capital part becomes rapidly worth less and wages increase substantially in proportion to that capital part.

So a two pronged assault on the impact of the capital part of home loans. I would think that this would make the vultures purchasing power even greater. House prices would be lower, and the high interest on repayments would mean those with larger deposits are at a distinct advantage over those with no savings and credit card debt coming out their ****.

edited for typos

Edited by DabHand

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Guest Baffled_by_it_all

Rachman

Some figures

Say I'm looking for a 2 bed garden flat (currently at 180K)

Factor in a 30k deposit - Mortgage 150k

Repayments £890 a month at 5%

Two years on

Deposit has grown to 45K

Stagnation or a drop means I can negotiate price down to 155K

Mortgage 110k

at 7% repayments £786

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Assuming you have a 10% deposit, that puts the mortgage at £180K (and 6X multiple). That's about £1000 a month repayment mortgage (4.5%).

If you want to buy at 4 times (we will assume same capital amount of deposit), then that's a £120K mortgage and £140K total price. Higher interest rates at say 7% (not unreasonable) would be £850 a month.

So for a full 30% fall in the property market, you save £40 a week. Not a lot, is it ?

At anything above 8.5%, it's cheaper to buy now.... at a 6 times multiple......

I just can't see 30% falls except for properties that idiots bought in the first place and that are compromised. You may be in for a very long wait (or a big pay rise).

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I expect to eventually to be able to buy on 4 times my salary. Currently it is 6 ish... But, if prices did stagnate for long enough my increased deposit would reduce the required mortgage.

Although, I don't think long term stagnation is a possibility. The greed of the public shown in the last 6-9 months will be the downfall imho.

I felt that long term stagnation was possible, but it seems that the general public have been brainwashed into believing that house prices can rise at a faster level then income for ever, think about it this is impossible, the latest price rises (they are rising, I have seen it first hand) should be worrying to bulls as prices are already a bit high historically. I now feel that if these rises continue we could see a crash next year.

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Assuming you have a 10% deposit, that puts the mortgage at £180K (and 6X multiple). That's about £1000 a month repayment mortgage (4.5%).

If you want to buy at 4 times (we will assume same capital amount of deposit), then that's a £120K mortgage and £140K total price. Higher interest rates at say 7% (not unreasonable) would be £850 a month.

So for a full 30% fall in the property market, you save £40 a week. Not a lot, is it ?

At anything above 8.5%, it's cheaper to buy now.... at a 6 times multiple......

I just can't see 30% falls except for properties that idiots bought in the first place and that are compromised. You may be in for a very long wait (or a big pay rise).

Just to add... I do expect it to be a long wait. Once Negative YoY is apparant it will probably take 5 years to the bottom.. although I'll be buying half way down with silly offers. Oh, and you'll find most people are saving/investing more than Net HPI (including wage inflation).

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Rachman

Some figures

Say I'm looking for a 2 bed garden flat (currently at 180K)

Mortgage 150k - Repayments £890 a month at 5%

110K - at 7% repayments £786

Interest portion is about £80 a month different for those figures... you are factoring in a 20% drop in prices.

I just don't see that this is making much real world difference to what's going out the door - if your finances are that critical on £100 a month, buying a house is a huge risk anyway, that can be wiped out for a year with one replacement front door......

[not intended to be personal, just trying to highlight that the amount you lay out the door won't be that much different]

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Can I ask a question or two of you lot that are sat like vultures waiting for a crash.

Do you have a large amount of cash set aside for the deposit ? Do you REALLY think that the cost of the loan will go down if interest rates rise ? Are you all thinking that prices will fall by so much that even given laying our more interest monies that long term you will make a net saving ?

Say on a £200K property today, what price post crash, what deposit and mortgage do you expect to be having to fund ? At what cost per month would you say is reasonable on say a combined £40K income..... ?

I really would be interested to hear what you think as I don't think (from what I have read) many of you have thought through what higher interest rates will mean for you unless you have A LOT squirrelled.

A crash would be fantastic for me. I have plenty stashed away and making me roughly 6k/year interest, and I'm saving around 40k/year out of my salary (and no I didn't STR). I could easily buy a decent place but for me and my wife it's not the right time - we could be relocating soon to an area new to us, so we're going to rent for now and see how it goes. If house prices crash in the meantime, it means that when we do finally decide to buy, we'll be able to get a lot more for our cash. If they don't crash, then as long as they don't go up at crazy rates again I think I'll still be ok. On say a 250k place we intend to rent, the estate agent fees and stamp duty if we bought will cover the first year of rent. Couple that with the fact that the interest on a mortgage for the same property would be more than rent and the fact that we're more easily able to move when we decide to, I think we're doing the right thing for us. For now...

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Guest Baffled_by_it_all

GB

You must have at least 200k stashed away and rising. Hardly the typical example!

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GB

You must have at least 200k stashed away and rising. Hardly the typical example!

And able to save £70K a year of gross earnings - that's some going or living offshore on expenses.....

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At anything above 8.5%, it's cheaper to buy now.... at a 6 times multiple......

But today, assuming no deposit, 6x income would buy me a shithole in Chav-town. At 8.5%, 4x income would buy me a decent house somewhere nice.

If I'd been earning as much with as large a deposit in 2001, I could have bought a four-bed house in a nice area with a 2x income mortgage. What's magically changed in the last five years of our 'low-inflation' economy that an ex-council house in Chav-town is now worth more?

Ah, low interest rates and a 'buy at any cost' mentality.

Edited by MarkG

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But today, assuming no deposit, 6x income would buy me a shithole in Chav-town. At 8.5%, 4x income would buy me a decent house somewhere nice.

If I'd been earning as much with as large a deposit in 2001, I could have bought a four-bed house in a nice area with a 2x income mortgage. What's magically changed in the last five years of our 'low-inflation' economy that an ex-council house in Chav-town is now worth more?

So you are suggesting price falls even larger than that then - because presumably nice house is now a lot more than 6X salary which is why you are looking at chavtown - are you serious in expecting the nice house to drop by far MORE than 30% to bring it down to a 4X multiple (I'll assume same deposit, even though I know it's likely to have grown somewhat) - I just can't see it. At a finger in the air, you are looking at house prices halving for nice houses - which is massive given that a lot of the market rises have seen compression by way of sh1tholes moving up to decent area prices.....

Edited by Rachman

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Assuming you have a 10% deposit, that puts the mortgage at £180K (and 6X multiple). That's about £1000 a month repayment mortgage (4.5%).

If you want to buy at 4 times (we will assume same capital amount of deposit), then that's a £120K mortgage and £140K total price. Higher interest rates at say 7% (not unreasonable) would be £850 a month.

So for a full 30% fall in the property market, you save £40 a week. Not a lot, is it ?

At anything above 8.5%, it's cheaper to buy now.... at a 6 times multiple......

I just can't see 30% falls except for properties that idiots bought in the first place and that are compromised. You may be in for a very long wait (or a big pay rise).

if count 40*52 it will be £2080 a year. so tell me - why on earth you do like an opportunity to give away £2080 after tax a year for 25 years? or £52000 in total. which is atwo years of full tume slavery for the average worker in this country.

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if count 40*52 it will be £2080 a year. so tell me - why on earth you do like an opportunity to give away £2080 after tax a year for 25 years? or £52000 in total. which is atwo years of full tume slavery for the average worker in this country.

My point's not the extra payment, it's that over 25 years, it's not that much money relatively speaking and it's the sort of level you could easily lose in a bit of unforeseen DIY - in effect even with lower prices, the higher rates won't make that much difference to what you are paying out of the door. If people's finances are that precarious that £40 a week is the difference between affording and not, then they are not exactly going to be flush later either..... I just read here and think people think that a HPC is the panacea and that they will all have pots of money later - they won't.

I don't like it, which is why I am on a very low interest rate and am paying my large mortgage debt down by over a grand a week.... :)

Edited by Rachman

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Sorry, I think you are missing the point. There are many frugal people on this board who don't like the thought of throwing money away when it can be avoided in a few years time. £40 isn't a paltry amount, neither did anyone say it was the difference between affording a house or not, £40 saved a week or into a pension can only be a good thing.

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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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