scoobynutta555

I disagree with your analysis. Nobody can 'almost guarantee' anything when it comes to the housing market, indeed the economy.

Matteeboy

Scooby - look at market trend charts - go as far back as possible. Patterns emerge that really are quite amazing (if you're dull like me).

Market confidence is very cyclical - a real "sheep" mentality, even though any financier will claim to be well above it.

njkmrs

If you are looking at how things have developed over the last 30 years,you will see houses have increased in price /value massively ,eg property bought for 3k in 1970 now worth 150k .We have had dips all the way here and there but the results show for themselves.Property was,is and always will be a good investment,if you are not in a hurry .
You can wait if you like,you may get a bargain,I hope you do Matteeboy .
If your happy to rent for the rest of your life,then thats your choice and if it suits you then great .You have said your in a nice place which you enjoy,so nothing wrong with that .
All those who have taken on massive mortgages,enjoy the relief from the interest rate cuts and hang in there .Prices will recover ,but most importantly enjoy your home .

lozgti

don't care if my house has lost £50k.Don't really care that I don't benefit from the cut.

Main thing is,we love our home and where we are and I will always do something to pay the mortgage.

Be nice if this shock to the housing market will stop people going crazy and I hope the big rate cut doesn't start the housing market buy and sellathon off again (don't think it will)

Luan Pra bang

I was just in the process of transfering my mortgage from 1 tracker deal to another and changing from repayment to interest only If they honour the deal after the rate cut my mortgage goes from 1900 to 1300 by by calculations.
Time for a big **** up.

john banks

Houses over the long term have been a good buy as they go up with incomes which have gone up a little faster than general inflation, and a great buy if purchased at the right point in the cycle. 1970s to present day increases are a little meaningless without correcting for inflation though.

I'll buy again when the rental yields and income multiples suggest a good deal, like when I bought the last time. Only doubled my money in eight years, but it was a new build and got out a year before they started to drop.

I would also gear up with some debt/mortgage to amplify the returns, but I would never want to gear up heavily at the top of an inflated bubble.

I do wonder what the availability of mortgages will be like at these new rates, unless you can do high LTV and income multiples I think it will do little to support present prices.

scoobynutta555

Interest only mortgage in a low inflation/falling house price market, you're a genius!

fast bloke

John,
Sorry - Didn't see this until this evening. 4.8 joint if both incomes are over 35k. Deals are coming and going at an astonishing rate since Thurdsay, so it is hard to say who will be good tomorrow, but if you have good credit and good affordability you can go up to 5 times joint in some cases

fast bloke

As I have said - illness is covered by insurance, so no risk there. If you are keen, there is always work to be done somewhere. I am keep to point out that I am comfortable and happy, and not skint as you seem to imply. How do you work out that my mortgage is a stupid debt? I don't have thousands and thousands and thousands saved, but I don't have any debt other than my mortgage. I compltely fail to see how you can consider this 'stupid'

fast bloke

Methinks you made that up - Numbers don't add up unless your repayment mortgage was over 4000 years or something.

Matteboy - OK - You are right. I am taking a massive risk. I am sorry for doing this and wish I had found you in 1993 when I made the terrible mistake of getting a 100% mortgage for 10 times income to buy a house. (OK - I was a student on 700 quid a year.) When I sold that house for 50k two year later, I wish I had stashed it and not continued my fickle borrowing. . If I had saved every single mortgage payment I have ever made I would have approximately 120k in the bank, which would be great, except that I would have paid around 100k in rent, so I would have 20k in the bank. So if it all goes **** up and I am made bankrupt I am only 20k down and I can always rent (as a last resort of course)

john banks

Thanks fast bloke. Whilst the deals are coming and going I'm amazed deals like this are still around. I feel a bit mixed about it, a large part of me wants 2x joint to become normal again so that prices become more affordable, because it takes a long time for most people simply to pay off the capital of 4.8 x joint no matter what the interest. Despite the temporary pain of an adjustment for many, if houses go back to sensible income multiples we'll all have much more money to spend on other things and to invest in productive industries?

I think I would rather have to spend 2x joint to get a house and pay 15% interest than I would have to spend 5x joint to get the same house and pay <4%.

fast bloke

Like say for example...... financial services?????

I think in a general sense you are completely correct (as usual), but what needs to happen to change the mindset of lenders and borrowers? Most of this usually gets blamed on mortgage brokers and estate agents, but they are generally only doing the best job they can for their clients (insane self certs aside).

If a lender can make billions by lending high multiples (CDO's aside), and a borrower can have the house they want by borrowing high multiples, what is going to stop that from happening? Sure there will be a short period of sensibility after this one bottoms out, but if you dig out Matteboys historical trends you can see that every bust is bigger than the last one, but so is every boom. - It would be nice if this wasn't the case, (cos some fingers are going to get seriously burned in the subsequent even bigger bust) but I can't really see anything that will make it different

MikeCardiff

iTrader: (2)

I think a lot of it depends on how much you personally like taking risks - I would much rather not have a huge mortgage and loads of debts simply because in a worst case scenario then I wouldnt lose all the things I had got used to.

Borrowing based on what you currently earn, and assuming you will always earn that is IMHO a bit short sighted, but some people prefer to do this and dont mind the risk.

The danger is that if you lost your job, and had huge outgoings and debts, then you may not get a job earning enough to cover them, in which case you end up losing the house, selling the car etc... Having to move from a nice big detatched house in a good area to a 5hitty terrace on a sink estate because its all you can afford is going to come as an unwelcome shock.

If you set yourself up so that if you lost your current well paying job, then a job on the minimum wage would cover your outgoings ( albeit not living a life of luxury, but all the bills get paid until things get better ) then you have very little risk as as an emergency measure you can always get a dead end job in a factory or office.

This was one of the main reasons I didnt borrow the maximum that was offered when I bought ( over £450K ) as there was no way I needed to spend that much on a house, when I could spend less than half and get somewhere I was perfectly happy with without the risk. The same reason as I bought an older car that I could pay for outright in cash rather than a newer one and having half the money on credit.

While I'm sure there are plenty on here who share my point of view, there also seems to be a lot of people who have the 'borrow now, worry about it later' mentality which caused most of the financial problems the country now has, and I cant really see this changing in the near future. The only way to stop people borrowing more than they can afford is for the lenders to tighten up and make it harder to borrow.

Matteeboy

Mike - I very much agree.
And plenty here are saying they have a mortgage but are happy because they have a home - how refreshing NOT to witter on about making money on it.

Fast Bloke - you made £700 a YEAR in 1993?! Flippin eck, how did you get a mortgage at all?!
Your figures are based on rather high rent - easy to make them up to suit yourself. Of course buying makes sense for most - just think silly borrowing is stupid.

john banks

fast bloke, suggestions might include land taxes, mortgage lenders being separate from the investment sides of banks, mortgages being recycled deposits rather than wholesale funded, another gold standard to keep everyone honest, including HPI in the BoE targeted inflation rate. All of these are policy decisions, on a personal level I suppose we just all have to play the boom-bust as best as we can judge it. I think many people get caught up in bubbles (or crashes) and think the market becomes linear, too many short memories. If everyone had it forefront in their mind that it was cyclical would it stop the crazy bubbles? Why don't people learn etc...

Some conspiracy theorist types think that the banking system is basically fraudulent, and a Fiat currency and fractional reserve lending are simply the tools of the banking dynasties to make the public into debt slaves, and rob them through inflation or repossession. I find myself starting to look for tins of baked beans and foil hats as a lot of what they say is starting to make sense.

Olly

Does this mean getting paid in Pandas and Puntos?

Matteeboy

John - a "Fiat" currency would be extremely unreliable and break down a lot. Oh - just like it has done...

I have always thought the masses are manipulated by a smallish group of people. People aren't expected to think for themselves. Just look at what banks have got away with and are getting away with now (RAISING interest rates of credit cards even though the base rate has just plummetted - even though WE the TAXPAYER/government own quite a lot of some banks now!!!) and Tony Blairs extreme vested interest in JP Morgan (I think) - something must be going on.

Luan Pra bang

Why do you think I made it up ? current rate is a tracker 340,000 and it is £1900 per month now, offer was 1.54 above the base rate. At the time just before the cut it worked out to 1700 per month on interest only. After the cut I work it out to be 1300 ish. 340,000 x 4.5% divede by 12.
Term is 23 years.

EddScott

Quick question.

If the mortgage lenders are saying they are going to drop their SVR on 1st December, does that mean they will also change the rates on their mortgage products?

At the moment, say for instance C&G has 5.79 with no fees, will this be affected when they reduce their SVR?

scoobynutta555

Mortgage and the variables within each can change daily. I'd imagine there'll be a big push by banks to get people on a fixed rate and offer incentives to do so, ie. no fees.

SVR and tracker rates will attract more fees. If I was after a mortgage now, I'd be going for something with no fees, no redemption and an attractive tracker rate. I managed to find this with the Woolwich (Barclays) a few months ago.

Deep Singh

When I first started to read about such things on www.hpc.co.uk a couple of years ago, I thought they were all mad and ended up being banned for life from that site for taking the **** out of them

Now I have to admit I see alot of truth in what they were saying...

john banks

The nutters on House price news, information and discussion - HousePriceCrash.co.uk seem to be right on.

fast bloke

Oh - right - please accept my apologies. If you could give me an idea of how much it would have cost to rent the houses I have owned I can give you more accurate figures. I am assuming that you have this information as you have stated that I have based my figures on rather high rent?

Matteeboy

I think this has run it's course.
You've done well and have a house with a big mortgage and think that's fine.
We've done pretty well and rent a house but have saved enough to buy a modest house outright or a large chunk of bigger/nicely located one.

We both think we've done the right thing and both seem fine with our choices.

That'll do.

fast bloke

That is the important bit

Jimpreza

Yes, but who has the biggest house?

Matteeboy

Jim - by the sounds of it, both are pretty big. But ours is rented so doesn't count...!

PaulC72

Glad that is solved, just when we about to get to my dad is bigger than yours

Either way rent or buy you have to be happy with the path YOU choose everyone will have a different view on all situations, god knows I knows I have

TelBoy

If you've not seen today's inflation report, then you'll hear about it on the news this evening. In a word, the UK economy is fooked. Why it took the Bank of England (who were still actively considering rate hikes not six months ago), is anyone's guess. They're chasing a runaway train now. But you might see some more rate cutting in December, should that be of consequence to you.