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House prices
#1442570
13/08/2013 09:09
13/08/2013 09:09
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Joined: Dec 2005
Posts: 6,731 Surrey
Emjay
OP
Forum is my life
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OP
Forum is my life
Joined: Dec 2005
Posts: 6,731
Surrey
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So apparently house prices are on the up (although it seems to be a story manufactured out of very little). Yet again this is being trumpeted as a good thing.
Are people (other than those who own investment properties or who are seeking to 'downsize') really somehow better off?
Some faux expert on today's radio made the observation that because it reduces negative equity it means a family can sell that house and move, freeing up a property for someone else. [Reminded me of Fletcher explaining to Mr Mackay how he disposed of the dirt from the hole he dug].
What am I missing here that means I should be doing cartwheels?
Does our law condemn a man without first hearing him to find out what he has been doing? (John 7:51)
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Re: House prices
[Re: Emjay]
#1442575
13/08/2013 09:23
13/08/2013 09:23
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Joined: Dec 2005
Posts: 12,295 Sandhurst
Begbie
Ex El Presidente
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Ex El Presidente
I AM a Coop
Joined: Dec 2005
Posts: 12,295
Sandhurst
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In my parents case, they have sold there home of 20 years plus in Byfleet and now moving to the IOW. Mortgage cleared off and basically the difference in price of selling and what they have bought is going to be their pension fund, so yes, they are better off as both are on state pension with no other pension available to them,
But for buyers (i.e. myself) it just makes it far more difficult to buy a place in SE. I know I need to save up to get a reasonable deposit, but to geta decent mortgage without paying massive amounts back each month, I'd need at least a 20% deposit which would equate to around £50,000 which would take me quite a while to save up, unless there is help from my parents or Becky's parents (which they have offered, but I need to clear debts down before we even think about it)
Your car is Usain Bolt with wellies
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Re: House prices
[Re: Emjay]
#1442577
13/08/2013 09:24
13/08/2013 09:24
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Joined: Dec 2005
Posts: 12,546 Northumberland
AndrewR
I AM a Coop
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I AM a Coop
Joined: Dec 2005
Posts: 12,546
Northumberland
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Well, house prices rising makes it worth large developers building estates of new houses. This creates work for a whole host of people, from unskilled hod-carriers through to sales staff and even those in the legal profession.
Those people go out and spend the money they've earned on pies, Audi TTs and gold bath-taps, respectively, thus helping money circulate in the economy, which makes us all believe in the pretend money harder, which is good.
And all for the cost of the loss of a few thousand acres of countryside and 500 Daily Mail articles about how much your house is worth.
Everybody's happy (except the tiny minority of people who want to own a house).
Dear monos, a secret truth.
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Re: House prices
[Re: Emjay]
#1442584
13/08/2013 09:45
13/08/2013 09:45
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Joined: Apr 2007
Posts: 2,581 London
MrCooper
I need some sleep
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I need some sleep
Joined: Apr 2007
Posts: 2,581
London
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The likely price rises to come are probably neither here nor there in terms of their impact if you ask me. The problem is already set and all this will do is entrench it.
For people who owned a proper family home pre 2003 (or at least were never going to trade up significantly again) are quids in rolling around in their 200 - 300 % of unearned income and thinking how intelligent they are. For those who dont (first time buyers or people trading up since that time), without flowdown of wealth from older generations those people will probably never be able to own the home which was equivalent to that whcih they would have had if they had been born in the last generation. Given modern life expectancies when will that flow down happen for most people - probably when the kids are in their late teens and really they will only need a large family home for a few years before they all move out (hopefully).
So, 10 - 20% price rises now will be a pain for all those who are not at their "final rung" on the ladder, but is it a game changer, absolutely not. The gamechanger happened 12 years ago.
Its very divisive in both socal and generational terms.
Ex Grigio Moon 20VT Plus Ex 350Z Now Aston Martin Vantage
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Re: House prices
[Re: Emjay]
#1442684
13/08/2013 17:12
13/08/2013 17:12
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Big_Muzzie
Unregistered
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Big_Muzzie
Unregistered
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Interest rates won't hit 4% for a fair old while - medium term perhaps but short term not a hope in he'll!
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Re: House prices
[Re: Emjay]
#1442695
13/08/2013 18:16
13/08/2013 18:16
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Joined: Jan 2006
Posts: 5,294 Portsmouth
ali_hire
Forum is my life
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Forum is my life
Joined: Jan 2006
Posts: 5,294
Portsmouth
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Well the guv'nah of the BofE reckons they aren't going up for 3 years (but with some ifs).
If house prices are rising (and that's a big if) then everyone jumps for joy and completely forgets all the issues that happened the last time around.
Same s**t, different decade.
Last edited by ali_hire; 13/08/2013 18:16.
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Re: House prices
[Re: Emjay]
#1442697
13/08/2013 18:22
13/08/2013 18:22
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Jonny
Unregistered
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Jonny
Unregistered
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So apparently house prices are on the up (although it seems to be a story manufactured out of very little). Yet again this is being trumpeted as a good thing.
Are people (other than those who own investment properties or who are seeking to 'downsize') really somehow better off?
Some faux expert on today's radio made the observation that because it reduces negative equity it means a family can sell that house and move, freeing up a property for someone else. [Reminded me of Fletcher explaining to Mr Mackay how he disposed of the dirt from the hole he dug].
What am I missing here that means I should be doing cartwheels? You're missing nothing. A lot of people are buying a lot of houses on buy to let mortgages as it's very easy to get them. The rate of return is way better than the bank. Here in the West Midlands, 6-8% return (before costs) is easily done compared to bugger all in the bank. It's a no-brainer for many.
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Re: House prices
[Re: ]
#1442701
13/08/2013 18:44
13/08/2013 18:44
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Joined: Jan 2006
Posts: 5,294 Portsmouth
ali_hire
Forum is my life
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Forum is my life
Joined: Jan 2006
Posts: 5,294
Portsmouth
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A lot of people are buying a lot of houses on buy to let mortgages as it's very easy to get them. Yeah, it's a piece of piss. All you need is 30% capital (so £70k based on the average UK house price) and you're laughing. Although, you're right about putting your money in property rather than the bank.
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Re: House prices
[Re: ali_hire]
#1442708
13/08/2013 19:25
13/08/2013 19:25
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Jonny
Unregistered
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Jonny
Unregistered
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A lot of people are buying a lot of houses on buy to let mortgages as it's very easy to get them. Yeah, it's a piece of piss. All you need is 30% capital (so £70k based on the average UK house price) and you're laughing. Although, you're right about putting your money in property rather than the bank. Average house price of £233K You haven't been to the West Midlands- a sea of perfect rental properties at £100K. And you don't need as much as 30%
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Re: House prices
[Re: ]
#1442711
13/08/2013 19:34
13/08/2013 19:34
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Jonny
Unregistered
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Jonny
Unregistered
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Here's a real-life example of why prices are going up:
Client (a builder) buys a run down property in a 'nice' town for £100K. Spends £30K doing it up to a very high standard, so maybe £60K to you and I. Now valued at £210K and therefore a £70K profit. Very nice for 3 months work.
Now he is now renting it for £25K a year to international students who will pay a premium for 'premium' flats...
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Re: House prices
[Re: ali_hire]
#1442763
14/08/2013 06:08
14/08/2013 06:08
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Jonny
Unregistered
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Jonny
Unregistered
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I'm aware of BTL mortgages as low as 80% LTV but you won't get a good rate. And yes, you can buy cheap property and let it out but with an increase in yield normally comes an increase in risk.
As for the student market, the arse is falling out of it here in Portsmouth. There are too many properties and not enough students.
International students are still coming here from the Middle and Far East with stacks of cash to burn but they don't want student properties, they want to live in the swanky pads down by the water and are prepared to pay through the nose for it (£2000pcm for a flat in Pompey? You've got to be f*****g kidding me!) Tell that to my favourite BTL broker. Fees are higher but it's all a trade off. Cheap to you, is not cheap up here I don't see my clients having many issues with property at these levels. The worst issues are with the ones who have London property. Cheap £300K properties there seem to end up having 2 defaults a year. These days, property trends/issues etc can only be looked at at a local level.
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Re: House prices
[Re: one4seven]
#1442794
14/08/2013 11:21
14/08/2013 11:21
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Joined: Dec 2005
Posts: 12,546 Northumberland
AndrewR
I AM a Coop
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I AM a Coop
Joined: Dec 2005
Posts: 12,546
Northumberland
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If you can save for a 5% deposit, you can get to 20% with a bit four times more effort and patience surely? Edited for maths.
Dear monos, a secret truth.
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Re: House prices
[Re: AndrewR]
#1442798
14/08/2013 11:29
14/08/2013 11:29
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Joined: Jun 2013
Posts: 853 East Anglia
one4seven
Enjoying the ride
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Enjoying the ride
Joined: Jun 2013
Posts: 853
East Anglia
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If you can save for a 5% deposit, you can get to 20% with a bit four times more effort and patience surely? Edited for maths. Being patient for longer doesn't require 4 times the effort really...
Ollie
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Re: House prices
[Re: one4seven]
#1442802
14/08/2013 11:39
14/08/2013 11:39
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Joined: Dec 2005
Posts: 12,546 Northumberland
AndrewR
I AM a Coop
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I AM a Coop
Joined: Dec 2005
Posts: 12,546
Northumberland
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Depends how hard you find being patient.
I find it really, really hard. Even instant gratification is too slow for me.
Dear monos, a secret truth.
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Re: House prices
[Re: Emjay]
#1442805
14/08/2013 11:52
14/08/2013 11:52
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Joined: Dec 2005
Posts: 17,367 Staffordshire
Nigel
Forum veteran
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Forum veteran
Joined: Dec 2005
Posts: 17,367
Staffordshire
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My son (having just complete his apprenticeship at Rolls-Royce) is now in a position where he's thinking about buying.
He and his girlfriend have no savings to speak of, so their deposit will be 5%. They are aware that a bigger deposit will secure them a better rate and (if prices don't rise) a smaller mortgage.
However, FTB lending is at its highest level for 6+ years, so prices WILL rise. IMHO, they would be better off jumping onto the housing ladder now, rather than spending another year saving another 5%, only to find out that house prices have risen 10% in the same period, thus meaning their saved deposit no longer represents 10% and their mortgage would be bigger anyway.
And for what its worth, prices are still generally very good in the West Mids - <£100k gets you a nice 2-bed flat or an ex local authority 3-bed house. £120k gets you a modest 3-bed semi in a decent area. £150k gets you a nice 3-bed semi in a nice area. £200k gets you detached.
In my home town, there are 2000+ sq.ft, five bed, three bath "exec" houses going at £400k. Anyone that says "its grim up North" clearly isn't trying to buy a house.....
IMHO, its the areas with previously heavily depressed housing markets that will recover earliest and fastest, as buyers try not to miss the boat. Sadly, a lot of the cheap stock will be snapped up by investors, as the W.Mids return is currently above 8% (gross) on the right property.
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Re: House prices
[Re: Emjay]
#1442820
14/08/2013 13:45
14/08/2013 13:45
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Joined: Dec 2005
Posts: 776 State of Essex .
robcoupe20vt
Enjoying the ride
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Enjoying the ride
Joined: Dec 2005
Posts: 776
State of Essex .
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Happy days if you own your house especially in London . However i have lived in this house since 1989 and was renting till 2000 when the owner wanted to sell . Back in 2000 house prices were reasonable compared to today . I bought my house on my own and had 1full time job and 2 part time jobs . I worked from 8.30am to 6pm five and a half days a week as a panel beater . Came home from that job and started working on cars 5 nights a week . Then cleaned myself up and off in my van into central london for a paper round from 11pm to 2.30 am four nights a week . Most mornings i could not tell what day it was i was so tired . Its something i had to do at the time to get on the property ladder and i am glad i did . My house is worth three times what i paid for it but to me it does not mean anythiny really until its time to sell and move on .
Last edited by robcoupe20vt; 14/08/2013 13:56.
Fiat 20VT Fiat 16vt Fiat 130TC Fiat 131 sport Kawasaki ZX6RP7F Kawasaki GPZ550 Kawasaki ZX7R P2
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Re: House prices
[Re: robcoupe20vt]
#1442824
14/08/2013 14:11
14/08/2013 14:11
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Joined: Dec 2005
Posts: 6,731 Surrey
Emjay
OP
Forum is my life
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OP
Forum is my life
Joined: Dec 2005
Posts: 6,731
Surrey
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Happy days if you own your house especially in London Going back to my original point, "Why?" Unless you are downsizing or it is an investment property what is the benefit of prices going up? My house is worth three times what i paid for it but to me it does not mean anythiny really until its time to sell and move on . Exactly, and when you move on it won't mean anything, unless you are downsizing, as the price of the house you are moving to will also have gone up. If you are looking for a more 'expensive' property, you would have been better off if prices had gone down.
Does our law condemn a man without first hearing him to find out what he has been doing? (John 7:51)
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Re: House prices
[Re: Emjay]
#1442837
14/08/2013 16:06
14/08/2013 16:06
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Joined: Dec 2005
Posts: 776 State of Essex .
robcoupe20vt
Enjoying the ride
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Enjoying the ride
Joined: Dec 2005
Posts: 776
State of Essex .
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Happy days if you own your house especially in London Going back to my original point, "Why?" Unless you are downsizing or it is an investment property what is the benefit of prices going up? My house is worth three times what i paid for it but to me it does not mean anythiny really until its time to sell and move on . Exactly, and when you move on it won't mean anything, unless you are downsizing, as the price of the house you are moving to will also have gone up. If you are looking for a more 'expensive' property, you would have been better off if prices had gone down. Simple its better than going down in price If i sell i will downsize not a problem then .
Last edited by robcoupe20vt; 14/08/2013 16:07.
Fiat 20VT Fiat 16vt Fiat 130TC Fiat 131 sport Kawasaki ZX6RP7F Kawasaki GPZ550 Kawasaki ZX7R P2
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Re: House prices
[Re: Emjay]
#1442841
14/08/2013 16:24
14/08/2013 16:24
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Joined: Dec 2005
Posts: 6,731 Surrey
Emjay
OP
Forum is my life
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OP
Forum is my life
Joined: Dec 2005
Posts: 6,731
Surrey
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Going back, again, to my original point in case someone can answer it...
Why is it better than going down in price, unless downsizing?
Aren't people deluding themselves that they are better off?
Okay, I buy house A for £200,000 when I would rather buy house B for £400,000...
House prices go up by 25%. I sell house A for £250,000. Whoopee, how rich I am. I need only to get my hands on a further £250,000 to now buy B.
If prices went down by 25%. I sell house A for £150,000. Yar boo, how poor I am. I need to get my hands on £150,000 to buy B.
In reality I am £100,000 in my pocket better off and have exactly the same roof over my head.
Does our law condemn a man without first hearing him to find out what he has been doing? (John 7:51)
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