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Why would the prices crash unless they became unnafordable.

The only people who cant afford houses are those who dont already have them, those that do and that is the majority of the population can afford them.

Simply not true. My brother is in the same boat as very many people his age.

Mid 30's, recently married, good salary (over 40K, not london or south east), owns a 2 bedroom house on an out of town estate. He and his wife want to move to a 3/4 bed house near a school to start a family. They can't. The next rung on the ladder is now too far away from them considering that his wife would have to give up work for at least a while to pop a couple of sprogs. He says that he wouldn't now be able to afford his own house, let alone a larger one.

Surely a person not being able to afford thir own house at current prices is the clearest sign of a looming correction?

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If you purchased five years ago you could.

Look around are there empty properties, I think not. They all have an owner so I cant see that changing unless interest rates go up to very high levels.

Thats not to say some will be caught out, however they are a small number. Those who took the bait of 2% fixed for 2 years then 5 on the SVR.

The vast majority of people I know have quite a bit of leeway before they would struggle. There are loads of areas where people could cut back before having to hand the keys back. Just look at McDonalds you have to Q up these days.

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Why would the prices crash unless they became unnafordable.

The only people who cant afford houses are those who dont already have them, those that do and that is the majority of the population can afford them.

Laurejon, I'm afraid to inform you that you might actually one of Britains least intelligent people. Well done, have some kind of trophy.

You are arguing that something can remain at it's current price simply because the only people who can afford it are the people who already have it.

Please think this argument through before posting again, and if you come to the same conclusion still please seek professional assistance.

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Surely a person not being able to afford thir own house at current prices is the clearest sign of a looming correction?

Not really he is losing a wage and has not made arrangements for it.

I think he is allowed by most companies to take a mortgage holiday until his wife goes back to work.

Also its worth remembering that maternity leave benefits are much better these days.

In essence his situation has changed and he has not made provision for the rainy day although having children cannot be considered rainy day as its the next best thing to owning your own property :P

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You are arguing that something can remain at it's current price simply because the only people who can afford it are the people who already have it

And you are arguing that everyone who already owns property and has done for years cannot afford to buy one. Who needs the treatment ?.

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Guest Charlie The Tramp
And you are arguing that everyone who already owns property and has done for years cannot afford to buy one. Who needs the treatment ?.

Well I for one. Had 100% equity the past 24 years, thinking of moving up a rung, nothing over the top, but would need a 90k mortgage. Just five years ago the same property was for sale, I could have bought for an additional 20k. <_<

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Well I for one. Had 100% equity the past 24 years, thinking of moving up a rung, nothing over the top

So the possible property crash means that with 100% equity you will have to sell your house ?. You must have some secured loans.

Charlie is pointing out that if people like him can't trade up, then there is no market, not that he's got to leave his current house.

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And my point is that so what there is no market. Charlie cant trade up, is that going to make everyone sell up at a cheap price?.

The fact remains the vast majority can afford their mortgage payments when the day comes that they cant then maybe it might be in such numbers that it affects house prices.

I dont see flocks of people selling up their houses just because they are told there is a housing crash. The facts remain, lowest unemployment in decades and the lowest rates of interest in decades.

You cant get much better than that, any drop in the market today is due to the talking down and not on economic facts. The problem with this is that people are sitting on the ringside waiting cash in hand. when they realise its not going to crash where do you think they are going to spend their money.

The Landlords pocket

Or get their own piece of England.

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And my point is that so what there is no market. Charlie cant trade up, is that going to make everyone sell up at a cheap price?.

The fact remains the vast majority can afford their mortgage payments when the day comes that they cant then maybe it might be in such numbers that it affects house prices.

I dont see flocks of people selling up their houses just because they are told there is a housing crash. The facts remain, lowest unemployment in decades and the lowest rates of interest in decades.

You cant get much better than that, any drop in the market today is due to the talking down and not on economic facts. The problem with this is that people are sitting on the ringside waiting cash in hand. when they realise its not going to crash where do you think they are going to spend their money.

The Landlords pocket

Or get their own piece of England.

Depends which is cheapest. Prices need to drop 30-40% to make it cheaper to "get a piece of England"
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Well we keep talking about real terms what are they?.

I took a mortgage in 2000 based on my earnings at that time. Since then I have had payrises that make my annual salary double what it was then.

Am I somehow losing out?.

Real Terms is can I pay my mortgage, do I still have enough left to pay the bills.

Answer yes to those and you can keep your house.

If not then you have done something wrong, maybe even lied about your earnings in which case go to jail do not pass go and do not collect 200 quid.

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Guest Charlie The Tramp
I took a mortgage in 2000 based on my earnings at that time. Since then I have had payrises that make my annual salary double what it was then.

Well if everyone`s salaries have doubled in the last five years, s*d this retirement lark, back to work for me. :D

And there`s you lot telling me how underpaid you are. :o

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Guest Cletus VanDamme

I thought the point of this thread was about people overstretching themselves with ridiculous salary multiples and interest-only mortgages, based on their belief that prices will continue rising so 'it will all be alright in the end'.

I can't afford to buy my own house if I had to buy it outright now (i.e. 240K, I'm on a 25K salary). But that's not the point, and for most people who have worked their way up the ladder, that has always been the case, regardless of where they are in the cycle of boom or bust.

Cletus

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I can't afford to buy my own house if I had to buy it outright now (i.e. 240K, I'm on a 25K salary). But that's not the point

It IS the point. You only have that equity because you bought before the boom. Today's buyers HAVE NO SUCH LUXURY. :angry:

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Guest Cletus VanDamme

OK, but what I am saying is that anyone who lives in a house for a number of years will be paying off the mortgage, so wherever they are in the cycle, there will come a point where, given a long enough period, they would be unable to buy the same house on their current salary.

It's like anything that over the long period goes up in value: antiques, precious metals, art, musical instruments. I have a number of things that I couldn't afford to buy again at their current prices. I'm sure most people do.

The thread was originally about people overstretching themselves because they assumed they could never lose.

I am a bear by the way!

Cletus the Redneck

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It's like anything that over the long period goes up in value: antiques, precious metals, art, musical instruments

Bad examples. The antiques market is vulnerable to wild fluctuations according to the prevailing economic climate and the whimsies of fashion.

Precious metals:

AFElong.gif

This is a chart for gold since 1979. As you can see, the gold price is well below half what it was in 1980.

Art is terribly subjective and not really what many people would consider as an "investment" in the normal sense of the word.

I thought most musical instruments (save some extremely venerable violins made by famous names) lose value over time.

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Guest Cletus VanDamme
Bad examples. The antiques market is vulnerable to wild fluctuations according to the prevailing economic climate and the whimsies of fashion.

Sounds like the housing market! Thanks for the info on gold. I know nothing about precious metals or art, by the way, but you get my drift. Musical instruments are subjective but 'classic' modern as well as old ones can hold their value and increase, especially if they are ones no longer made or before production was shipped out e.g. to Korea, China or Mexico.

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Just 5 years ago a 100k mortgage was seen as an expensive mortgage. Now a 100k mortgage is seen as reasonable. I have many friends and family with

140k to 250k mortgages. Many interest only as they cannot afford the house on a repayment mortgage. Many have self certified and lied about their salarys.

They are all caught up in the great house price boom and have lost touch with

reality and just how much money they are borrowing.!

I know many who who be stretched if interest rates go up next year. Its not just the mortgage, its council tax and all the other monthly debits. It costs alot to live nowadays.

I think its all a ticking timebomb. Interest rates will go up, pennies will get tight and panic will set in. I know for a fact that if interest rates go up to 6% many of my friends and family will be in trouble. People live for today and for the moment and do not think about tomorrow.

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Gosh, AARGH...............

Just got back from a family lunch with my sisters. We all have different views of the housing market. They are all bullish while I am bearish.

We STR last January and I was informed over lunch today that I have lost around 30k this year because we have sold and my sister has made around 50k since April as her house is now valued higher than when she bought it.

I mentioned that I was not going to buy a house, maybe not for the next couple of years and they were horrified that I could stay in rented for that long.!

I said I predicted houses should fall around 30% as they are just too expensive,

but this statement was met with total disbelief, but house prices are still going up

Nationwide said they went up 1% last month.!

Thank goodness for this website and this forum, and for all the regular posters,

I don't know what I would do without it.!!!!

I think the important thing here is it is people like your sisters who will decide the direction of the market......not you, not i, in fact no one from this website, just average non financially versed working people.

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Guest pioneer31
And my point is that so what there is no market. Charlie cant trade up, is that going to make everyone sell up at a cheap price?.

if nobody can move the market will stagnate and all the EA's will go out of business.

of course in reality people will move but those in the cheaper properties will have nobody to sell to and this will effect the whole chain.

It is the lack of FTB's that is causing the market to turn around.

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  • 442 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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