How far will house prices fall [volume 4]
Discussion
z4RRSchris said:
kingston12 said:
Absolutely. I'd only ever consider it at all if it was part of a move that was already planned i.e. getting the next house up for less money because the market had softened in the interim.
To make stepping off the ladder to get back on at the same level make sense would require a fairly hefty crash and we don't seem to get those any more.
15% price softening in clapham / putney / balham etc last year would make stepping off and back on 12/24 months later look attractive. To make stepping off the ladder to get back on at the same level make sense would require a fairly hefty crash and we don't seem to get those any more.
i suspect they will soften again this year a similar amount.
tannhauser said:
p1stonhead said:
I think you overestimate the amount of 'cash' someone buying such a house might have. Decent £350k deposit from past moves (tied up in their existing house) and a half million mortgage will get you in. You still may not have two sticks to rub together at the end of each month though when all bills (inc two nice cars leased) come out.
This is a picture of a lot of people.
And this illustrates how fThis is a picture of a lot of people.
king ridiculous this state of affairs really is.Spending £850k on a house rather than £650k on a house and £200k on cars is just someone's choice on how to spend their money.
p1stonhead said:
tannhauser said:
p1stonhead said:
I think you overestimate the amount of 'cash' someone buying such a house might have. Decent £350k deposit from past moves (tied up in their existing house) and a half million mortgage will get you in. You still may not have two sticks to rub together at the end of each month though when all bills (inc two nice cars leased) come out.
This is a picture of a lot of people.
And this illustrates how fThis is a picture of a lot of people.
king ridiculous this state of affairs really is.Spending £850k on a house rather than £650k on a house and £200k on cars is just someone's choice on how to spend their money.
tannhauser said:
And this illustrates how fking ridiculous this state of affairs really is.
Same among high earners all over.king ridiculous this state of affairs really is.When I got my first well paid job, I was be amazed at these people around me, many of them whom were raised working class, who had become accustomed to spending as much as they earned.
Commute in from a non Riverside flat? Don't be silly. Not doing something like a European city break every other weekend? How strange.
Hence why you got all those suicides during the 2008 crash when the tide came in.
Even on PH you see the massive list of cars some people have gone through despite being a worker bee, and often they are run of the mill 2 litre German as opposed to special or interesting.
Edited by hyphen on Thursday 15th March 13:50
tannhauser said:
p1stonhead said:
tannhauser said:
p1stonhead said:
I think you overestimate the amount of 'cash' someone buying such a house might have. Decent £350k deposit from past moves (tied up in their existing house) and a half million mortgage will get you in. You still may not have two sticks to rub together at the end of each month though when all bills (inc two nice cars leased) come out.
This is a picture of a lot of people.
And this illustrates how fThis is a picture of a lot of people.
king ridiculous this state of affairs really is.Spending £850k on a house rather than £650k on a house and £200k on cars is just someone's choice on how to spend their money.
For a couple brining in say £6k or £7k a month combined (so say £120k a year) a £2k mortgage is easily paid.
My £350k mortgage is £1200 a month on a 5 year fix. At the moment mortgages are extremely cheap.
Again, depends on income, how much you are saving for a rainy day etc on the side. Someone spending their whole £6k or £7k is indeed an idiot.
People borrow £10m to buy £12m houses. Money is cheap at the moment.
Edited by p1stonhead on Thursday 15th March 13:53
hyphen said:
tannhauser said:
And this illustrates how fking ridiculous this state of affairs really is.
Same among high earners all over.king ridiculous this state of affairs really is.When I got my first well paid job, I was be amazed at these people around me, many of them whom were raised working class, who had become accustomed to spending as much as they aren't.
Commute in from a non Riverside flat? Don't be silly. Not doing something like a European city break every other weekend? How strange.
Hence why you got all those suicides during the 2008 crash when the tide came in.
As previously suggested, I reckon you shouldn't even be allowed to borrow half a mil for a house!! Expensive properties should be the preserve of those who can only genuinely afford them. Sounds crazy? Restricted mortgage lending would certainly help to reduce prices!
Bring on high interest rates, restricted lending and a bloody good recession.
turbobloke said:
kingston12 said:
p1stonhead said:
z4RRSchris said:
dom9 said:
i like thatPeople from other countries must look at us and piss themselves laughing.
Just to bring this thread down to earth a bit… 
We bought our 4 bed terraced in Hampshire for 215k about 18 months ago on a 2 year fixed 3.89% (95% LTV) (monthly was around £890)
Looking at renewing now and been offered (based on a 90% LTV, although depending on the valuation of our property we may be over the 85%):
2 year fixed, 2.34% – payments of about £730pcm
5 year fixed, 2.5% – payments of about £755pcm
Now the £25 a month doesn't bother me, but I torn between the 5 year fixed for security, or going for a 2 or 3 year fixed on the grounds that after another few years our LTV will be better and we might get a better deal when we renew again (thinking is, that if we locked in for 5 years at 3.89% 2 years ago, we'd be a bit gutted right now).
Thoughts? I appreciate its all a bit of a gamble and more of an art that a science, but good to get others opinions I guess.
Sorry if is the wrong thread for this post!
We bought our 4 bed terraced in Hampshire for 215k about 18 months ago on a 2 year fixed 3.89% (95% LTV) (monthly was around £890)
Looking at renewing now and been offered (based on a 90% LTV, although depending on the valuation of our property we may be over the 85%):
2 year fixed, 2.34% – payments of about £730pcm
5 year fixed, 2.5% – payments of about £755pcm
Now the £25 a month doesn't bother me, but I torn between the 5 year fixed for security, or going for a 2 or 3 year fixed on the grounds that after another few years our LTV will be better and we might get a better deal when we renew again (thinking is, that if we locked in for 5 years at 3.89% 2 years ago, we'd be a bit gutted right now).
Thoughts? I appreciate its all a bit of a gamble and more of an art that a science, but good to get others opinions I guess.
Sorry if is the wrong thread for this post!
Croutons said:
turbobloke said:
kingston12 said:
p1stonhead said:
z4RRSchris said:
dom9 said:
i like thatPeople from other countries must look at us and piss themselves laughing.
To us, its reasonable value on the face of it unfortunately.
Kewy said:
Just to bring this thread down to earth a bit…
We bought our 4 bed terraced in Hampshire for 215k about 18 months ago on a 2 year fixed 3.89% (95% LTV) (monthly was around £890)
Looking at renewing now and been offered (based on a 90% LTV, although depending on the valuation of our property we may be over the 85%):
2 year fixed, 2.34% – payments of about £730pcm
5 year fixed, 2.5% – payments of about £755pcm
Now the £25 a month doesn't bother me, but I torn between the 5 year fixed for security, or going for a 2 or 3 year fixed on the grounds that after another few years our LTV will be better and we might get a better deal when we renew again (thinking is, that if we locked in for 5 years at 3.89% 2 years ago, we'd be a bit gutted right now).
Thoughts? I appreciate its all a bit of a gamble and more of an art that a science, but good to get others opinions I guess.
Sorry if is the wrong thread for this post!
I'd go for the 5 year fixed, but I doubt there will be much in it. BoE guidance is constantly flip-flopping on how many rate rises there will be, but I very much doubt the base rate will get past 1.5% in the next two years (or ever again?!)We bought our 4 bed terraced in Hampshire for 215k about 18 months ago on a 2 year fixed 3.89% (95% LTV) (monthly was around £890)
Looking at renewing now and been offered (based on a 90% LTV, although depending on the valuation of our property we may be over the 85%):
2 year fixed, 2.34% – payments of about £730pcm
5 year fixed, 2.5% – payments of about £755pcm
Now the £25 a month doesn't bother me, but I torn between the 5 year fixed for security, or going for a 2 or 3 year fixed on the grounds that after another few years our LTV will be better and we might get a better deal when we renew again (thinking is, that if we locked in for 5 years at 3.89% 2 years ago, we'd be a bit gutted right now).
Thoughts? I appreciate its all a bit of a gamble and more of an art that a science, but good to get others opinions I guess.
Sorry if is the wrong thread for this post!
Edited by kingston12 on Thursday 15th March 14:17
p1stonhead said:
Because he cant fathom that people earn enough to be able to comfortably afford it.
I think it was a bit more on the more principle whereby it might be beneficial to society as a whole (certainly the majority) if the lending was capped for houses and that a consequence of not lending the money at this level would perhaps stop the runaway prices and everyone being on a mortgage treadmill for longer and longer? The ones that could comfortably afford it, then would have far more chance to move/upgrade easily, as prices might hold down better at the top end and they could save for retirement easier, or change their lifestyle, or spend their money elsewhere? Perhaps stop/reduce lots of speculation where the view is you can't lose so just borrow the most you can and sit tight to make money? Imagine a (semi communist!?) scenario where the houses in the 90's were all valued and from that point on their value only rose by RPI or if extended etc a fixed sum was added (perhaps the exact build costs?) and then if you wanted to sell that was the price, no ambiguity? so take out market forces effectively, what would that world look like now? would it have panned out better? The only thing I can think of this effecting is lots of exceptionally rich people today would only be very rich?
p1stonhead said:
gibbon said:
tannhauser said:
I suggest you shouldn't even be allowed to borrow half a mil for a house!!
Why not? All on the never never and it's all on a wing and a prayer anyway gambling on interest rates staying stupidly low forever. Also I don't understand this general acceptance - almost obedience - in never questioning anything. It has become normal that a "nice" (or rather, decidedly average) house in the SE is approaching £1mil. A million f
king quid!!!As the previous poster said, other countries must be pissing themselves laughing. We deserve everything that's coming.
Scootersp said:
p1stonhead said:
Because he cant fathom that people earn enough to be able to comfortably afford it.
I think it was a bit more on the more principle whereby it might be beneficial to society as a whole (certainly the majority) if the lending was capped for houses and that a consequence of not lending the money at this level would perhaps stop the runaway prices and everyone being on a mortgage treadmill for longer and longer? The ones that could comfortably afford it, then would have far more chance to move/upgrade easily, as prices might hold down better at the top end and they could save for retirement easier, or change their lifestyle, or spend their money elsewhere? Perhaps stop/reduce lots of speculation where the view is you can't lose so just borrow the most you can and sit tight to make money? Imagine a (semi communist!?) scenario where the houses in the 90's were all valued and from that point on their value only rose by RPI or if extended etc a fixed sum was added (perhaps the exact build costs?) and then if you wanted to sell that was the price, no ambiguity? so take out market forces effectively, what would that world look like now? would it have panned out better? The only thing I can think of this effecting is lots of exceptionally rich people today would only be very rich?
tannhauser said:
I guess those who aren't accustomed to having money, end up spunking and flaunting it when they end up doing so, and have no idea how to make it go as far as possible. New money I guess.
As previously suggested, I reckon you shouldn't even be allowed to borrow half a mil for a house!! Expensive properties should be the preserve of those who can only genuinely afford them. Sounds crazy? Restricted mortgage lending would certainly help to reduce prices!
Bring on high interest rates, restricted lending and a bloody good recession.
You have a pretty desparate tone in this thread tannhauser. I do understand your frustration and what you're saying about some property being overvalued when compared to earnings but we are where we are, house prices are this because people can afford to buy them at these prices and are doing so as we speak. As previously suggested, I reckon you shouldn't even be allowed to borrow half a mil for a house!! Expensive properties should be the preserve of those who can only genuinely afford them. Sounds crazy? Restricted mortgage lending would certainly help to reduce prices!
Bring on high interest rates, restricted lending and a bloody good recession.
I'd say be careful what you wish for, do you think restricting income multiples for mortgage lending will help more on lower incomes or FTB's get on the ladder and buy houses? Would there be more owner-occupiers or less?
There's a lot of money out there to fund property, about a half of properties aren't even mortgaged. If house prices became significantly cheaper, you may well have a situation where there will be an increase in buy-toi-let as those folks with money will hoover up more property and rent them out to the have nots.
And how does higer interest rates or a recession help with affordability? That may reduce house prices somewhat, but if there is widespread job insecurity and loses, plus significantly increased monthly payments on loans then I don't really see who benefits, besides the cash-rich retired.
tannhauser said:
...we don't need any communism: simply restrict lending to sensible levels, and house values will find their own, sensible levels.
Okay but to what end? Do you think that there will then be cheap houses for all, including you? If lending was restricted you would still have the same pecking order whereby those on higher incomes will be able to afford to buy houses, nicer bigger houses, and those on low incomes won't.I'd counter that most of the people I know with big mortgages (£500k+, for the purposes of discussion) are on much lower income multiples and have a lot more spare each month than the people I know with more normal mortgages. Plus if things do go to the wall, there's a lot more "fat" they can trim from their lifestyles. After all, a tin of beans and a loaf of Value sliced white costs the same whether your household income is £15k or £150k.
tannhauser said:
Scootersp said:
p1stonhead said:
Because he cant fathom that people earn enough to be able to comfortably afford it.
I think it was a bit more on the more principle whereby it might be beneficial to society as a whole (certainly the majority) if the lending was capped for houses and that a consequence of not lending the money at this level would perhaps stop the runaway prices and everyone being on a mortgage treadmill for longer and longer? The ones that could comfortably afford it, then would have far more chance to move/upgrade easily, as prices might hold down better at the top end and they could save for retirement easier, or change their lifestyle, or spend their money elsewhere? Perhaps stop/reduce lots of speculation where the view is you can't lose so just borrow the most you can and sit tight to make money? Imagine a (semi communist!?) scenario where the houses in the 90's were all valued and from that point on their value only rose by RPI or if extended etc a fixed sum was added (perhaps the exact build costs?) and then if you wanted to sell that was the price, no ambiguity? so take out market forces effectively, what would that world look like now? would it have panned out better? The only thing I can think of this effecting is lots of exceptionally rich people today would only be very rich?
The last real bust in London/SE was in the early 90s. We have effectively cheated our way out of most of the effects of the 2007-8 bust with continued low interest rates, encouraging massive foreign investment and pumping money into increased shared ownership and Help to Buy.
Whether that has been the right thing to do is a legitimate question, but one thing it certainly means is that it is much harder to suddenly press the reset button in the way you are suggesting.
Edited by kingston12 on Thursday 15th March 15:33
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