OllyK

..well if you live in Conwy it has, everywhere else they prices continue to rise and the number of properties being sold increase: http://news.bbc.co.uk/1/hi/business/4751057.stm

To those saying 2 and 3 years ago, that you'll wait for the crash before getting on the property ladder - oops!

KiwiGTI

It has to happen one day, but probably won't affect Scoobynet members who are by and large debt free, have more than one house, owe nothing on their £20,000 cars and earn on average 3x the national wage.

Richard_P

It's only ever the same ten people that comment on that type of thing though. So you have to assume the other 100000 or however many members it is are up to their eyeballs in debt to own their ford focus and keep wifey in evening dresses


I hope a housing crash hits Scotland, I'm waiting to buy my first property

stilover

Well I hope a housing crash happens. I want to buy a bigger appartment in a VERY exclusive development, but as is the norm at the moment, it's over £250,000. Very nice though with parking space & Garage.
If a crash happens, even though my current property would drop, the drop in the property I want, would mean an affordable mortgage, as my property would drop percentagly less than the one I want, as they are WAY over priced.

TopBanana

It looks to me like prices are still moving sideways in real terms.

davegtt

You sure about that? You dont believe then that if we see a crash in the market we wont see a hike in interest rates meaning cheaper house prices yet just as expensive mortgage payments....

Petem95

Im with OllyK - housing crash?!! dont be silly!! Price will rocket FOREVER and EVER and EVER!!!.....

What I find worrying is the fact that massive property prices are seen as a good thing?!! It means;

- people who want to upgrade to a nicer house have to find more money
- the government rack in loads more in stamp duty
- estate agents rack in more in fees
- chavs borrow against their property to buy stuff they cant really afford
- the government rack in SHED LOADS more in inheritance tax

Pretty clear its in the governments interest to keep prices high, and the governments puppet, the BBC, seem to constantly be going on about how great it is.

For society is it such a good thing? Young couples arent bothering with families because they cant afford to buy a family home - is that a good thing?...

rossyboy

iTrader: (8)

As above, surely the only way that prices would drop significantly would be caused by interest rates rising. If that happens, then all mortgages are more expensive...

davegtt

Im not disagreeing with your argument over house prices, but we've had this conversation before, how many young couples would be looking to buy a house anyway? seriously.... And if your talking about 25+ why didnt they buy a house 5 years ago before the boom?

Its only really the teens and people upto 20 who I have any sympathy for to be honest.

scoobynutta555

I assume from your post you haven't got a bundle of cash lying around to purchase this cheaper luxury apartment. Do you know what happens in a housing crash? Banks virtually stop lending any amount to schemes where there is even a whiff of risk or defaulting. There would be a great difference in the amount you can borrow in a boom compared to a recession. Even if you did get a mortgage you might be hit by higher interest rates etc.

That is assuming you do have a job come the housing crash, as rising unemployment is usually a precursor to it.

lozgti

Don't understand how people are paying for these mortgages.

Nice to see bankruptcies are on the up too though.

Petem95

Yeah it hardly comes as a surprise to see bankruptcies are at record levels.

I dont think it will be a raising of interest rates that will cause the next housing crash, it will come with the economic crash will is looking increasingly likely.

You can only have an economy based on debt and borrowing for so long.

stilover

Well, I deffo don't have £167k in my bank account just sat there doing nothing.
The price of the bigger apartment is £265k. My apartment is currently worth about £145-150k. Difference if I sold at £150 is £115k. Minus what I owe in mortgage = £52k means a new Mortgage of £167k. Now I do have a certain amount of cash that I could put down if I really wanted to. I could put in say £30k while still keeping some back for a rainy day. So I now need a Mortgage of £137k. As a single bloke, the repayments would be too high. Not that I couldn't afford it, I could, it's just that I don't want to commit that much money each month, while meaning I'd have to cut back on other things, i.e. not going out as much, buying Cd's, DVD's when ever I wanted to, buying a new car every 2 years, holidays, etc, etc.

Now bring in a house crash, and say both apartments go back to what they were 3.5 years ago when I bought my current property ( I only found out about the better apartment blocks after I'd bought mine )then I would only need a Mortgage of £110k or £80k (if adding £30k cash). Now, yes interest rates would be higher, but they would come back down soon, as would the house market rise.

The current market cannot keep on going the way it is. Only couples who both work can justifiably afford new properties these days, or/and putting themselves into serious debt. A bloke I work with was saying the other day that a bloke he knows who lives in London has just been given a mortgage 17 times his wage. 17 times !!!!!!!! How much debt are you going to be in at that rate??? Too much. It's all nice having a new or larger property, but drive around most new estates and look at the cr@py cars on the drive way. Most of their money is just Mortgage repayments. No new car, no holidays, no treats etc. Not a way I want to live.

Personal choice of course, but I have always said, that I'll only buy a property if I can still afford to go out, have a holiday, change car's every 2-3 years. Working just to pay the mortgage is just wrong. A housing crash would help a lot of people out. Unfortunately, all those who have stretched themselves to the limit will suffer horribly.

sarasquares

iTrader: (1)

ive lived in my house more than 15 years and i cant see how i could ever afford a 1/4 million mortgage

a few years ago i could have got it for around 60 thousand

MikeCardiff

iTrader: (2)

Amazing how much conflicting info you get on the housing market depending on who is making the report !

And most of the people who continue to say the market is rising and will continue to do so, generally have a vested interest in that happening - either they are trying to sell you a house, or lend you the money so you can buy one.

scoobynutta555

The trouble is they are only predictions. Nobody knows for sure if there will be a crash next week or if there will be a crash at all. The only semi reliable prediction there can be is that in the long term prices should be higher.

davegtt

Your whole post sums up everything Ive been saying for ages now, everyone wants the lifestyle and not have to pay for it in some sort of way but still moan that house prices are too expensive. Well in some cases theyre not. You said yourself you could probably do it but not be able to afford the flashy car and holidays, people 20 years ago didnt have the flashy cars and holidays abroad every year but everyone could afford a house, nothing much is different to what it was then just the peoples thinking.

IMO off course.

davegtt

Just like those predicting a crash. Their interest is they cant currently afford their own place, want to buy cheaper properties for the future etc etc... Its all relative.

fast bloke

IMHO the best forecasts come from the low risk lenders. The have a vested interest in making money - They don't care if prices go up or down. High risk lenders will always talk up the market as they will make enough on high rates to offset the losses in a crash. Halifax don't do 'risk' lending - all the self cert/ sub prime stuff goes to BM Solutions, yet they are still offering low 5-10 year fixed rates and high income multiples. The same applies to all the other major low risk lenders. If the crash hits as hard as Petem95 says it will, none of these lenders will have the built in contigency required to survive it. If they thought there was any chance of anything other than a gentle bump, they wouldn't be offerin long term low fixed rates and they would be insisting on MIG's for all lending over 75%. I am not saying that it isn't possible that we will have a crash, but I would be surprised if the doomsayers on here have managed to find some indicator that all the policy makers in the low risk lenders have missed.

p.s. - Pete - They don't have to go up forever and ever - They can stay static for a number of years while incomes catch up. While this would represent an erosion of the real value, it could hardly be considered to be a crash.

pslewis

This is quite true .... we have never had it better, and we have Tony Blair to thank for our vast wealth!!

Pete

lozgti

Or rather 99% of peoples vast debt in a society that has been actively encouraged/given little choice but to borrow like there is no tomorrow.

Suppose it allows GB to stand up and say 'look how rich you are'.

And intelligent people believe them! (mind you,Hitler convinced a few people he was a good lad too)l

InvisibleMan

Moooooooooooooooooooooooooooooooooooooo

stilover

It's not about that I want everything for nothing. What I'm saying is that you need a balance, and at current market values, the balance is uneven. Most of your wage goes to pay off the mortgage, leaving with less money to spend on other things, wheather that's food, gas, petrol, holidays etc.
A good balance is having a nice home that still allows you to go out and socialise with friends.
You may have a nice big flashy house that all your friends are envious of, but come Friday night when they are out having a meal, then going to a few bars for a drink, and you sat at home not having enough money to just spend like that. I just don't see the point.

OllyK

Of our combined net income, less than 1/6th goes on the mortgage, that's hardly "most"

Andy M3

Some good points being raised here, makes interesting reading

stilover

I was meaning those that have really stretched themselves.

Like you, my mortgage is about 1/6th of my wage, allowing me to buy a new car every 2 years, have a holiday, go out for meals drinks etc. It's a good balance, and my apartment is only 5 years old, so I'm not living in a Sh1thole, just so I can go out.

davegtt

But as I said, 20 years ago people were paying off the mortgage and living on pennies. Its always been this way. Just because the current generation expect the house and the lifestyle aswell doesnt mean something is out of porportion. I want to be able to afford my house and go out every friday night with the lads but I cant, doesnt mean houses are too expensive because those who do go out every friday night generally dont have a house and still live with the parents.

Petem95

Im sorry Dave but I just dont buy the "it was just as tough back in our day" arguement. House prices are at an all-time high - something like 6times average earnings, even high than the peak reached in the last boom.

Yes interest rates are currently quite low, but most young people still cant afford to buy. Students are leaving uni with £10-20k of debt (whereas in your day there were grants, so most left debt-free).

They are then expected to fork out say £150k for a little 2bed flat. That means forking out about £950 a month mortage. On a salary of £22k they take home about £1350 - or about £1185 after student loan payment, so that leaves you with £235/month to pay for bills, food, car, going out etc - not happening basically.

scoobynutta555

I'd just like to add I left uni at 21 (12 years ago) with a positive balance and I didnt have a grant/loan or any handouts. There is no reason at all why students should leave uni with debts over 10k IMHO

Petem95

True, I left uni 2.5years ago with zero debt, but on average debts for graduates are something like £12k, and rising now that student fees have increased to upto £3k/year from approx £1k.

There will always be people who's parents are able to pay for all their rent/cars etc at uni, but its not like this for most people.