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Timm

Shut Out Of The Housing Market? Thank Your Lucky Stars

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This is from the daily e-mail you get if you are subscribed to Money Week. It is available to view (and subscribe) here There is nothing in it that has not been discussed here already, but the some of the polemic is nicely worded, and comes as a nice antidote to the various HPI apologists that have been wheeled out on the box this evening.

<snip>

This is an unprecedented crisis, and one that the world has yet to wake up to. The ultra-bearish, but so far correct, New York professor Nouriel Roubini believes the final bill for this credit bubble explosion will be $1 trillion ($1,000 billion).

<snip>

This backdrop really does throw the nonsense talked about the housing market in most of the personal finance sections this weekend into sharp relief. The papers were full of stories about how difficult it would be for first-time buyers to get hold of mortgages, and how awful this was for them.

Tripe. If you happen to be a desperate would-be first-time buyer, then you should be rejoicing. House prices have only been elevated to these ridiculous levels by the easy availability of mortgage debt. That’s now vanished, which means that house prices will fall further

<snip>

First-time buyers are the fuel on which the housing market feeds. Yes, they might have been supplanted by buy-to-let investors in recent years, but the housing market can’t be propped up by investors alone. Particularly as typical buy-to-let properties (all those two-bedroomed flats in northern city centres) look the most vulnerable to the wave of repossessions sweeping the country.

So first-time buyers should be glad to have their options cut off. It means you can stop fretting about whether you should be buying a home. Instead find a nice rental property, strike a deal with a desperate landlord, and sit tight and save for a couple of years. You’ll build up a nice tasty deposit and prices will just keep falling in the meantime.

Of course, all the other grim economic consequences of the credit bubble blow-out might mean you don’t feel quite like celebrating. But at least you’ll be in a better position than if you’d taken out a 100% interest-only mortgage in the first half of 2007.

PS. Does anyone here remember Money Week when it was not a frenzied circus of bear-dogging?

Edited by Timm

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  • 293 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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