How far will house prices fall [volume 4]
Discussion
Sheepshanks said:
walm said:
Mr Whippy said:
The first rental was in an area where it'd be marketed at about £350,000 to buy. With £75,000 down that'd leave about £275,000 to borrow. That would be around £1450 to service over 25 years.
As predicted you have included principal repayments. Which is wrong.It's no different from the Phers who regularly add 30% to public sector workers' pay because of the pension. There may be some accounting principle that says that's a valid thing to do, but they can't use that value to pay today's bills.
I absolutely accept that from a near-term cashflow/affordability perspective you can argue a repayment mortgage is the reality (if you refuse to look for an interest only one for some reason).
And sure you won't have the higher salary of someone saving absolutely nothing into his pension when you work in the public sector...
BUT that is NOT the way to analyse the TRUE LIKE-FOR-LIKE costs/earnings.
Lots of accountancy is a grey area with opinion needed however THESE ISSUES are not grey! They are black and white.
By your argument someone could take on a HEAVILY discounted mortgage (neg-am - remember them?) which reverts to a much higher rate later on to recoup the discount and then they claim... "oh my mortgage is much cheaper than renting...."
Yes sure - FOR NOW!!
Mr Whippy said:
So with your accounting principle is there any consideration made for the value of said item you borrow against becoming worth less over time?
Ie, borrow £200,000 and the item is worth £100,000 at the end?
Or do you just assume a static value?
What about the opposite? Which in the general picture for the long term is actually more likely given historic trends? Again not saying you should buy, but you are taking a risk either way.Ie, borrow £200,000 and the item is worth £100,000 at the end?
Or do you just assume a static value?
Mr Whippy said:
So with your accounting principle is there any consideration made for the value of said item you borrow against becoming worth less over time?
Ie, borrow £200,000 and the item is worth £100,000 at the end?
Or do you just assume a static value?
No.Ie, borrow £200,000 and the item is worth £100,000 at the end?
Or do you just assume a static value?
That's the speculative part and is most certainly a matter of opinion!!
The simple point is that you can't claim that a payment into the equity of the house (which exactly like making savings) is similar to rent.
If you really want to compare and include the principal repayments then you should look at rent PLUS some sort of savings vehicle that would give you a sum equal to the size of the mortgage over the period of that mortgage.
Sheepshanks said:
Pork said:
Anecdotal only but we're looking to move. We're very commutable to London. Our place was valued and nearly 20% more than it was valued at 3 MONTHS ago and we're having viewings. Personally, I don't see that value, but what do I know?
We're looking to move 20 mins further out. Trying to buy is a joke. It's like some kind of frenzy. Anything desirable is selling before it hits open market and selling for over asking. We're having to do a leaflet drop as EAs not being much help, in part because we don't have a property we want to sell through them (told that by a friend of a friend who owns a number of EAs in the are we're moving too). The London ripple is getting further and further out.
I think more than ever, the seller has the upper hand and EAs are, more than ever, talking up values. I'd love to know if it'll ever end, it seems not!
We're looking to move 20 mins further out. Trying to buy is a joke. It's like some kind of frenzy. Anything desirable is selling before it hits open market and selling for over asking. We're having to do a leaflet drop as EAs not being much help, in part because we don't have a property we want to sell through them (told that by a friend of a friend who owns a number of EAs in the are we're moving too). The London ripple is getting further and further out.
I think more than ever, the seller has the upper hand and EAs are, more than ever, talking up values. I'd love to know if it'll ever end, it seems not!
anonymous said:
[redacted]
How can two people see the market so differently? Is it very area / price specific?Burwood said:
Relatively Australia is a lot more expensive than the UK.Nz even worse.no idea about the US but I have zero desire to live there
The grass is always appears greener - seldom is though. Or if it is then before you know it everyone is going there suddenly it's less attractive. Xmas day on the beach.... Nope
Possibly 1 hour a day time slot you can call family.
Probably very likely your family will hardly ever visit you and vice versa
emicen said:
Nothing to add to the current debate other than I had a look on housepricecrash for the first time over the weekend.
WOW!
People who think some of PH's regulars are arrogant/opinionated/aggressive really need to check it out over there
Is really is a bitter and twisted place. I pop in there once in a while when NP&E is a bit quiet WOW!
People who think some of PH's regulars are arrogant/opinionated/aggressive really need to check it out over there
98elise said:
Is really is a bitter and twisted place. I pop in there once in a while when NP&E is a bit quiet
There are a few extremists, but pick through that and there is actually some really relevant information that does appear to be supporting the fact that many parts of London (mostly the more developed north and west) are stagnant or dropping imo.Back to houses and yet another place has come up for sale in my area. I make that 8 or 9 now, I can never recall that ever happening. This place was built between the early to late 70's so quite a few are original owners (judging by décor and having actually spoken to quite a few owners). Looking at the latest one I can only assume they are trying the market to really cash in should it sell. The asking price is comical tbh, a good £50K more that I would have expected. If it sells I'll eat my hat.
anonymous said:
[redacted]
In which case it's possible that the houses that have been on the market a long time are different houses to the ones essayer is spotting that sell quickly. The differences could be in underlying condition, state of presentation, and also location as it's 8 miles from Hemel to Berk and 12 miles to Tring.Locally (SW) we've had an EA mailshotting with claims of a recent 'jump' in house prices. A quick check (small sample size) comparing houses that I know sold around the turn of the year with a couple that sold this week subject to contract, with sale price info on the recent sales due to knowing the vendors, it could be true but as above the sample size is small being five in total. With that caveat, the 'jump' is at least 12% in four months as I had to use asking prices for the earlier disposals and they probably went for less (even if it wasn't much less).
It's likely that this is local-local so only of narrow interest, and that town-wide numbers may not reflect it, whatever it is. I suspect Bristol is or will be more jumpy due to the major rail improvements.
turbobloke said:
In which case it's possible that the houses that have been on the market a long time are different houses to the ones essayer is spotting that sell quickly. The differences could be in underlying condition, state of presentation, and also location as it's 8 miles from Hemel to Berk and 12 miles to Tring.
Locally (SW) we've had an EA mailshotting with claims of a recent 'jump' in house prices. A quick check (small sample size) comparing houses that I know sold around the turn of the year with a couple that sold this week subject to contract, with sale price info on the recent sales due to knowing the vendors, it could be true but as above the sample size is small being five in total. With that caveat, the 'jump' is at least 12% in four months as I had to use asking prices for the earlier disposals and they probably went for less (even if it wasn't much less).
It's likely that this is local-local so only of narrow interest, and that town-wide numbers may not reflect it, whatever it is. I suspect Bristol is or will be more jumpy due to the major rail improvements.
It certainly does appear to be based on area of London e.g. I had two estate agents flyers/books through the door stating that if I am a seller I should be realistic about values and values have been dropping in my area (Notting Hill), in the east there are reports that some people are getting notes through the door stating that they think house prices have peaked and its time to sell e.t.cLocally (SW) we've had an EA mailshotting with claims of a recent 'jump' in house prices. A quick check (small sample size) comparing houses that I know sold around the turn of the year with a couple that sold this week subject to contract, with sale price info on the recent sales due to knowing the vendors, it could be true but as above the sample size is small being five in total. With that caveat, the 'jump' is at least 12% in four months as I had to use asking prices for the earlier disposals and they probably went for less (even if it wasn't much less).
It's likely that this is local-local so only of narrow interest, and that town-wide numbers may not reflect it, whatever it is. I suspect Bristol is or will be more jumpy due to the major rail improvements.
One thing is pretty obvious though, BTL'ers rushed to buy pre April 2016 which will no doubt be reflected in the next 1 or more monthly 'reports'. Things have been crawling around my way, with estate agents I haven't spoken to in months/year calling me daily.
Note however that the ONS corrected their Jan 2016 report, after getting the average house prices increases wrong and then reported a drop of 27k. It does seem rather odd timing, but at least fixed.
Edited by V6Alfisti on Monday 25th April 16:55
V6Alfisti said:
turbobloke said:
@V6Alfisti
My post had SW, that's SW 'oooarr gerrroorf moy laaarnd' rather than SW London.
I wish
Oh ! Sorry..very London focused these days.My post had SW, that's SW 'oooarr gerrroorf moy laaarnd' rather than SW London.
I wish
V6Alfisti said:
I am a Bristolian in any case, I have certainly seen some strong increases there!
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