'Boom' here we go (bubble burst content)

Viewing 20 posts - 121 through 140 (of 140 total)
  • 'Boom' here we go (bubble burst content)
  • trail_rat
    Member

    and where do you live until this “correction” takes place ?

    You warned me of the above when i bought my house back in 2012- you were also looking but were dispondant at the prices then and convinced they were going to tumble and you would snipe then. Its 2016 now.

    how much have you spunked on rent since then ? – surely your house has to theoretically decrease by at least that much and you have a necessity to sell before your on a loss.

    If your house is an investment well – thats your stupiditiy . if you realise you have to live somewhere and a house is a home… I dont want to move every 6 months to a year when the land lord decides he wants more money – or in some cases much more money.

    I dont want to look at random coloured walls all my life or shitty looking gloss painted doors or live with the damp in the back bedroom because my landlords a bawbag.

    so i bought a house.

    badnewz
    Member

    I can tell you that the robot call centre rep is not far away at all. As in, actually replacing the person rather than the automated systems we have now.

    That’ll cause a bit of an economic issue, I reckon.

    Yes, a massive economic issue. And a political one.

    There could be a smooth transition to a new type of economy, with a basic living wage to compensate for the unemployment technological automation brings.

    Or there could be a reactive revolution with a lot of anger over job losses…
    Pitchforks outside Google, lynchings on the lampposts of Palo Alto, only time will tell.

    Technology is ultimately deflationary. Living costs should reduce over time.

    Will technology disrupt housing? Could an innovative startup change the rules of the game? A lot of house owners are using Airbnb to make some extra money so they can pay their mortgage.

    footflaps
    Member

    Will technology disrupt housing?

    Highly unlikely, everyone still needs somewhere to live and that isn’t going to change.

    A lot of house owners are using Airbnb to make some extra money so they can pay their mortgage.

    And what impact does it have on the demand for houses? None.

    brooess
    Member

    House prices causing baby bust?

    Some interesting (and well-sourced) considerations in this article that super-high house prices are reducing the number of babies being born – across several Western countries, not just UK. Worth reading the readers’ comments too, which are largely supportive of the premise…

    So whilst everyone needs somewhere to live, there may be fewer ‘everyones’ needing somewhere to live in 20 years time. In around 5-10 years’ time the Baby Boomers will begin dying or going into nursing homes, thus increasing supply with no commensurate increase in demand… put the two together and the long-term supply and demand equation may not be the same as it is now. So anyone thinking about selling their house in 15-10 years time to ‘be their pension’ may find the situation somewhat different to what they expect.

    Without mass-automation or immigration to provide economic output, a shrinking population will also lead to lower economic growth – which tends to follow demographics… the more people in the workforce, the more economic output and the more GDP, assuming productivity stays the same…

    Just to be 100% clear, this isn’t a prediction, just an observation that long-term trends are not necessarily in favour of ever-higher prices….

    We’ll have something like 2.3m expats returning wanting somewhere to live….

    And being unable to sell their continental homes, many will be skint…

    MrSmith
    Member

    Just to be 100% clear, this isn’t a prediction, just an observation that long-term trends are not necessarily in favour of ever-higher prices….

    Yes they are. But there are obviously periods of stagnation or a falling of prices. But the long term (let’s say since the end of WWII) trend has only been going one way.

    So a 10 year period and then the dip in 2007. Though what I don’t understand is just about every property I looked at 2 years ago was way above the peak before the mini-crash so don’t know if that’s just a SE thing and some property outside the SE is still in negative equity

    Premier Icon thisisnotaspoon
    Subscriber

    Err probably wait a couple of years to see what happens, or if you absolutely must, do your homework, don’t overstretch yourself and buy with the

    Trailrat got there first, but that’s another 2 years, which in rental terms is about £1600/month on my street, plus fees, so say about £40k. That’s £40k less deposit. About 9% of the value of a similar house. In other parts of the country it’s even more stark, I lived in a house in Teesside, £6k per year in a house worth about £80k, so 7.5% per year which makes waiting even less sensible (assuming your income is in any way proportional to the choice of house).

    And prices would have to start dropping tomorrow, not next year, if they go up 10% this year and then drop 10% next you’d lose nothing.

    Interesting how the posters shouting loudest about how houses shouldn’t be investments are the ones who are trying to play/predict the market.

    Edukator
    Member

    A more useful graph;

    5thElefant
    Member

    I lived in a house in Teesside, £6k per year in a house worth about £80k

    Must have been a mansion 😯

    agent007
    Member

    but that’s another 2 years, which in rental terms is about £1600/month on my street, plus fees, so say about £40k. That’s £40k less deposit.

    Firstly unless they’re somewhere near central London, or perhaps a bit daft, I very much doubt that a potential first time buyer saving for a deposit is going to be spending anywhere like £1,600 a month in rent. So you’re implying that if they suddenly bought now rather than wait 2 years then they’d suddenly as if by magic have an extra £40k deposit? Where does that £40k suddenly come from? Are you forgetting that 2 years in the future is not the same as today? Would buying a home and paying mortgage interest be completely free over the initial 2 year period then?

    Paying £40k over the odds for a house now could easily add another £40k onto your interest repayments over the lifetime of your loan. And interest rates at the moment are rock bottom – if they rise then you could be talking about a lot more than that. Buying a house that’s overpriced now and over stretching yourself is something that’s going to affect you over the long term, possibly the next 25-30 years.

    I’m still saying that buying a house is good long term, just why risk buy now when things are looking so ‘peaky’ and displaying (IMO) all the classic signs of a bubble that’s bursting?

    mikewsmith
    Member

    Trailrat got there first, but that’s another 2 years, which in rental terms is about £1600/month on my street, plus fees, so say about £40k. That’s £40k less deposit. About 9% of the value of a similar house

    Not really, it’s 2 years of mortgage payments on the house you would buy (sorry interest repayments)

    I’m still saying that buying a house is good long term, just why risk buy now when things are looking so ‘peaky’ and displaying (IMO) all the classic signs of a bubble that’s bursting?

    You mean besides the fact people have been repeating this mantra for nigh on six years with nothing to show for it?

    House prices round me (west of Scotland) have stagnated, not went up but certainly haven’t went down since we bought in 2010.

    Plus, as so many people have repeatedly pointed out, it’s still cheaper than renting.

    mikewsmith
    Member

    Plus, as so many people have repeatedly pointed out, it’s still cheaper than renting.

    Month by month or overall?
    Living somewhere that is currently in boom (all the hallmarks of the UK bubbles – uncontrolled lending, prices escaping wages etc.) the current analysis has renting vs buying as cost neutral.
    Don’t forget to take into account of all the other factors
    Fee’s
    Taxes
    Maintenance
    etc.

    There comes a tipping point where (and this is the key part) saving the money that would go on fee’s, maintenance etc. each month would provide the ongoing cash to rent when the “house is paid for” etc after. Analysis was done by economists not back of fag packet forums 😉

    DT78
    Member

    Going through the process of moving now, no sign of a dropping market in the south.

    Bought in 2006 at 165k spent a little updating so maybe in for around 175k on the market for 220, 13 viewings yesterday. A rough increase of around 30%

    But, the house we could have afforded in the area in 2006 for just another 50k or so are now 350k, the detached 4 bed homes in the area are between 500k – 650k now. An increase of some thing like 60% in the same timeframe. Even agents are saying these are looking overpriced…..

    Benefit of hindsight, we should have just taken a massive punt ignored the people saying be sensible and we’d be in a decent sized place virtually paid of mortgage. As it is I feel kind of trapped where we are. To move and upsize will mean taking out a huge mortgage or we stay put in a house too small and an area my wife doesn’t want to bring a child up in. I know it’s even worse for first time buyers….I have no idea how my younger sister will get on the market.

    As a home owner looking to move I’d like a price correction too. Just not the minute after I’ve just signed on the line for that massive mortgage.

    That said supply wise, we’ve spent the last week glued to right move. There really aren’t that many nice properties available, I’ve extended the search zones by 30 miles and upped the budget by £100k. Still not much.

    Seems like the bubble has well and truly burst round my way.

    Used to be that a the cost of a flat was in the heady territory of a Ford Focus.

    Now it’s a can of Coke.

    http://www.bbc.co.uk/news/uk-scotland-glasgow-west-36202983

    doris5000
    Member

    Bought in 2006 at 165k spent a little updating so maybe in for around 175k on the market for 220, 13 viewings yesterday. A rough increase of around 30%

    that’s below inflation over the same period though – if it had gone up with inflation 175K would now be 235K….

    http://www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html

    Premier Icon thisisnotaspoon
    Subscriber

    Firstly unless they’re somewhere near central London, or perhaps a bit daft, I very much doubt that a potential first time buyer saving for a deposit is going to be spending anywhere like £1,600 a month in rent. So you’re implying that if they suddenly bought now rather than wait 2 years then they’d suddenly as if by magic have an extra £40k deposit? Where does that £40k suddenly come from? Are you forgetting that 2 years in the future is not the same as today? Would buying a home and paying mortgage interest be completely free over the initial 2 year period then?

    Sleepy suburb of Reading. No need for it to be a first time buyer, although IIRC don’t stats now show that most people have kids then buy a house so 3 beds aren’t going to be uncommon for renting.

    My point was, countering your advice that people should do nothing for a couple of years, that if you have a deposit now and buy a house, your ‘on the ladder’ if things go up further, and if things go south your repayments are still less than the rent would be, and a proportion of that is paying off the balance.

    My my fag packet maths on a £250k mortgage (on say a 2 bedroom £300k house), in 2 years you’d repay about £14000+interest at £1100 a month on a 25year 2.5% mortgage, plus SDLT comes to £31400. Renting a comparable house would be about £1300/month or £31200 in total and you’d get nothing back. So you’re already £14k better off after 2 years of owning the house.

    So over the first 2 years you’re net the same if house prices stagnate (which is a net drop with inflation, if that’s ~2% then it’s a £6k profit for ownership.

    I’m still saying that buying a house is good long term, just why risk buy now when things are looking so ‘peaky’ and displaying (IMO) all the classic signs of a bubble that’s bursting?

    “Insanity: doing the same thing over and over again and expecting different results.”

    The doom mongers have been predicting the same thing for the last 9 years since the ‘crash (that never happened)’. But people still need places to live in the meantime, so keep buying houses. There will be a correction, but it’ll be a slow supply/demand driven correction, I can’t see any either the government of the BoE implementing policies to achieve anything but that. Yes the oversupply of credit isn’t helping keep prices sensible, but I’d postulate that that’s the effect of high prices driven by demand and the bank trying to limit their effects on people, not the other way around.

    And that’s all before we get to the nice warm cosy feeling of home ownership and being able to paint walls in whatever color you like and hang pictures on them!

    trail_rat
    Member

    The only way i get renting locally vs buying locally is to move house every 6 months as per was standard when i rented and the landlord would hike prices or decide he was selling.

    Even in the depressed market atm all id get for my mortgage locally is a 1 bed flat in a crap area!

    trail_rat
    Member

    Oh and of tinas 40k estimate only 1/4 of that went on interest here…. Over 4 years

    Happy enough number for me. As oppose to 100% of 700 quid disapearing every month and having nothing to show and >6month security on my address.

    Oh and 700 rent got me a 1 bed flat locally in a shit area and 750 on my mortgage minimim gets me a 3 bed with 2 garages and a nice garden in a nice area

Viewing 20 posts - 121 through 140 (of 140 total)

The topic ‘'Boom' here we go (bubble burst content)’ is closed to new replies.