Buying A House

[Pragmatopian]

http://news.bbc.co.uk/2/hi/business/6357057.stm

 

Seems I'm not talking total b***ocks after all

[Mutley]

You learn something new every day

[Lonan3]

I'm a convert! Mohammed is great!

 

Now where can I get me a fucking Islamic mortgage, eh?

 

Silly burka!

[slinkydevil]

I'm a convert! Mohammed is great!

 

Now where can I get me a fucking Islamic mortgage, eh?

 

Hey you get to upgrade to a second wife too. It's like all your Christmas's Rammadans have come at once!

[Slim]

http://news.bbc.co.uk/2/hi/business/6357057.stm

 

Seems I'm not talking total b***ocks after all

 

 

Er:

 

"Despite this ratcheting-up of the cost of buying a home, first-timers have not been driven out of the property market.

They accounted for 36% of all new home loans in 2006, up slightly from 35% in 2005, though still well down on the 50% level seen during the 1990s. "

 

I think your bollock talking is intact!

[3v0]

I'm a convert! Mohammed is great!

 

Now where can I get me a fucking Islamic mortgage, eh?

 

Hey you get to upgrade to a second wife too. It's like all your Christmas's Rammadans have come at once!

Why would you want to do that? One is trouble enough! Mistresses are the way ahead

[Pragmatopian]

http://news.bbc.co.uk/2/hi/business/6357057.stm

 

Seems I'm not talking total b***ocks after all

 

 

Er:

 

"Despite this ratcheting-up of the cost of buying a home, first-timers have not been driven out of the property market.

They accounted for 36% of all new home loans in 2006, up slightly from 35% in 2005, though still well down on the 50% level seen during the 1990s. "

 

I think your bollock talking is intact!

 

Hmmmm... as is your ability to use selective quotes to obscure the overall message of the article! If you take the article as a whole it presents a much less positive picture of the market from a first time buyer's perspective and raises questions about the accuracy of the classification of first time buyers in the statistic you quote.

 

http://en.wikipedia.org/wiki/Fallacy_of_qu..._out_of_context

[Roger Smelly]

I'm a convert! Mohammed is great!

 

Now where can I get me a fucking Islamic mortgage, eh?

 

Hey you get to upgrade to a second wife too. It's like all your Christmas's Rammadans have come at once!

Why would you want to do that? One is trouble enough! Mistresses are the way ahead

 

 

 

Haha he must be a masochist if he want 2 of the bloody things, one is more than enough.

 

The mistress thing sounds to be the best way out lol.

 

Next you will be putting your balls in a vice

 

As for the culture of wanting it all now i find that the most worrying thing, i know of a few people who got more mortgage to pay for sofas etc to basically kit out the house.

 

So say they borrow an extra £10k for the bits and bobs by the time they pay off the house/mortgage its going to cost them £30K in the end.

 

Now that is madness

 

Whats wrong with buying as you go along that way you are not over doing it.

 

I think these people will end up chained to the banks.

[Cret]

We were lucky with ours. The mrs was sensible enough to struggle and buy her old one 12 years ago brand new and it went up an awful lot since then. It's meant when we sold hers and bought one together in December we got a place (23grand below asking) that needs some work but has loads more space inside & out, left us a chunk for converting the upstairs, and a mortgage of £140 grand which is manageable.

 

We did just find we're quite a few grand short for all the work we want to do though so as well as the mortgage we're both saving £400 each a month, which for me going from £150 a month rent & no savings to over £800 a month for savings/house is a shock but I'm quite content.

 

No toys for the next year or two, but I always said I would buy most of the toys I wanted before getting a house and that's exactly what I did. Not hugely expensive stuff, but more than enough things to keep me happy & busy doing things when I don't have money for spending.

 

Oh, and apparently that's on less than 2/3rds of the national average (according to Student Loans at least).

Our house buy went smoothly as we had a cash buyer for ours and the old lady that had owned the new one had gone into a home with her daughter in the UK selling and it'd been around for a while so they just wanted shut of it I think.

 

Good luck to everyone trying to buy though. I thought it'd never happen and whilst the increase in outgoings has been a bit of a jolt to my finances I'm quite happy that I can sit in here knowing it's our house (well, the bank's technically but you know what I mean).

[Albert Tatlock]

http://news.bbc.co.uk/2/hi/business/6357057.stm

 

Seems I'm not talking total b***ocks after all

 

Er:

 

"Despite this ratcheting-up of the cost of buying a home, first-timers have not been driven out of the property market.

They accounted for 36% of all new home loans in 2006, up slightly from 35% in 2005, though still well down on the 50% level seen during the 1990s. "

 

I think your bollock talking is intact!

 

Hmmmm... as is your ability to use selective quotes to obscure the overall message of the article! If you take the article as a whole it presents a much less positive picture of the market from a first time buyer's perspective and raises questions about the accuracy of the classification of first time buyers in the statistic you quote.

 

http://en.wikipedia.org/wiki/Fallacy_of_qu..._out_of_context

Plus the average wage is less than £25K, and 60% of people earn less than that. IMO this paints a very disturbing future picture and suggests, taking into account other factors, an inevitable implosion, which because of the amount of debt involved may likely help fuel a recession.

 

Moreover, the average age for first time buyers is now 33, which has risen rapidly, which means people will also be paying hefty mortgage repayments when they are approaching retirement when they should be saving that money. This also means that the average person below 33 will be having problems finding somewhere to live, or paying stupid rents feeding greedy landlords and forcing even more people off the ladder - never able to save a deposit or keep their wages in line with price rises. Do you really think house prices will carry on rising so that the average first time buyer will be 40? 45? 50?

 

The reality is that high house prices benefit only estate agents, the rich and banks. The majority of people taking out these high mortgages now will be in dire straights when they come to retirement. What's the point of having an expensive house if you can't afford to heat it, or are out working all of the time to pay for it and never see much of your family? We really need to get houses back to being homes and not a supposed 'investment' - because a pile of bricks is meaningless in a genuine economy.

 

It should also not be forgotten that there have been 3 major recent recessions: in the 1970s, the early 1980s and the early 1990s - all which were preceded by a rise in the oil price. We have been lucky so far, but with nearly $2 to the £1, the rise of China and India, cheap labour flooding in from Eastern Europe, outsourcing, UK rates rising (albeit slowly) - things might feel good but remain delicate - especially with fuel costs becoming out of our control and rising rapidly in the past few years. Even if we don't suffer a full across the board recession, there will likely be several sectors affected. There are few of us left whose work couldn't be 'outsourced' to another area of the world. How much is your house 'worth' if you get outsourced and can't afford to pay the mortgage? Building societies show no hesitation in putting people out on the streets when the sh1t hits the fan

 

It's time we woke up to this and took some of our money back from the banks and building societies and invested it into business and our pensions - instead of selling over-inflated piles of bricks to each other, in a system controlled by banks, government, planners, developers and estate agents. Because if we don't, I think the next recession will substantially increase the difference between rich and poor, and create a number of problems we haven't even thought about now while times are 'good'. In the meantime we spend more than we earn, and generally have massive personal debt - and nothing banked for a rainy day (except our house!). When the sh1t does hit the fan, people will soon realise what a 'smoke and mirrors' game we have been playing with the UK economy. Remember - if you can't pay your mortgage you won't have a house - just a big loan which you will still be expected to pay back. People seem to have forgotten all of the negative equity in the 80s and 90s.

 

I've heard of 'living the dream' - but IMO many people are living in dreamworld in the UK. I've been through two of those three recessions, and learned the hard way - that when you do eventually reach square 99, there are a lot more snakes than ladders on the 'board of life'.

 

I hope I'm wrong, but it'll take a lot to persuade me otherwise.

[Slim]

Hmmmm... as is your ability to use selective quotes to obscure the overall message of the article! If you take the article as a whole it presents a much less positive picture of the market from a first time buyer's perspective and raises questions about the accuracy of the classification of first time buyers in the statistic you quote.

 

http://en.wikipedia.org/wiki/Fallacy_of_qu..._out_of_context

 

Er, right back at you! You link this article to somehow back up your point that house prices are about to collapse and you're justified in not buying, and my quite directly discredits that. Hardly out of context!

[Slim]

We were lucky with ours. The mrs was sensible enough to struggle and buy her old one 12 years ago brand new and it went up an awful lot since then. It's meant when we sold hers and bought one together in December we got a place (23grand below asking) that needs some work but has loads more space inside & out, left us a chunk for converting the upstairs, and a mortgage of £140 grand which is manageable.

 

I'm in a similar position, but I kept the flat I bought in the 80's rather than sell it, and am now renting it and another flat I managed to pick up on the way to help fund my mortgage. With a wife only working part time and three kids to feed/shoe I dont think I could manage a mortgage without the flats. This is why I've the view that rental incomes have risen in line with house prices, I've kind of first hand experience there.

 

We did consider flogging a flat to fund the house refurb, but have kept them and will just have to refurb the house over the years as we can save up.

 

I'm choking for a loft conversion, I've been after one as a toys den since I was 5

 

I am kicking myself that I didn't buy a house earlier though, I've mates who've made very big on house purchases from the early 90's, bah.

[Pragmatopian]

Hmmmm... as is your ability to use selective quotes to obscure the overall message of the article! If you take the article as a whole it presents a much less positive picture of the market from a first time buyer's perspective and raises questions about the accuracy of the classification of first time buyers in the statistic you quote.

 

http://en.wikipedia.org/wiki/Fallacy_of_qu..._out_of_context

 

Er, right back at you! You link this article to somehow back up your point that house prices are about to collapse and you're justified in not buying, and my quite directly discredits that. Hardly out of context!

 

That is patently not true.... notwithstanding that:

 

(1) the wider tenor of my post was that the situation is grim for first time buyers, and

(2) that housing prices will suffer a correction at some point (not necessarily imminently)

 

it doesn't take much to project from the article that house price rises are unsustainable in the long term. Economic analysis involves taking available historical data available and as much relevant information about the current state to make a realistic projection of future performance.

 

Your argument is basically that house prices have risen for x years, they're still rising now and people are still buying houses, therefore they will continue to rise. This completely ignores the wider economic picture.

[Slim]

That is patently not true.... notwithstanding that:

(1) the wider tenor of my post was that the situation is grim for first time buyers, and

(2) that housing prices will suffer a correction at some point (not necessarily imminently)

it doesn't take much to project from the article that house price rises are unsustainable in the long term. Economic analysis involves taking available historical data available and as much relevant information about the current state to make a realistic projection of future performance.

Your argument is basically that house prices have risen for x years, they're still rising now and people are still buying houses, therefore they will continue to rise. This completely ignores the wider economic picture.

 

You suggested that there were two inevitable outcomes, a crash or a new property owning 'gentry' due to first time buyers not buying. The article you linked said that while prices are going up, first time buyers are still buying. I dont see how that proves your point?

 

The situation is hard for first time buyers, granted. House prices are suffering a correction, the rate of price inflation has halved. A very significant correction. There's no inevitability about a crash however. I'm not saying it can't or wont happen, I've experienced crashes before so I'd never do such a thing, but it's a long way from inevitable.

 

Your theory is ignoring a lot of factors. Interest rates, supply of housing, disposible income, etc. You're just focusing on the price, and that's only part of the picture.

[Pragmatopian]

That is patently not true.... notwithstanding that:

(1) the wider tenor of my post was that the situation is grim for first time buyers, and

(2) that housing prices will suffer a correction at some point (not necessarily imminently)

it doesn't take much to project from the article that house price rises are unsustainable in the long term. Economic analysis involves taking available historical data available and as much relevant information about the current state to make a realistic projection of future performance.

Your argument is basically that house prices have risen for x years, they're still rising now and people are still buying houses, therefore they will continue to rise. This completely ignores the wider economic picture.

 

You suggested that there were two inevitable outcomes, a crash or a new property owning 'gentry' due to first time buyers not buying. The article you linked said that while prices are going up, first time buyers are still buying. I dont see how that proves your point?

 

The situation is hard for first time buyers, granted. House prices are suffering a correction, the rate of price inflation has halved. A very significant correction. There's no inevitability about a crash however. I'm not saying it can't or wont happen, I've experienced crashes before so I'd never do such a thing, but it's a long way from inevitable.

 

Your theory is ignoring a lot of factors. Interest rates, supply of housing, disposible income, etc. You're just focusing on the price, and that's only part of the picture.

 

I've never said prices would crash. I would consider a correction to be a decrease in house prices relative to the basic rate of inflation - house prices are still rising well above that, so have not yet suffered a correction.

 

What I'm talking about is not simply price but long-term affordability - the price could happily double year on year if wages were somehow able to double because productivity was somehow doubling. But the other things aren't happening. Productivity is close to level and wage growth for the majority is at or around inflation.

 

Interest rates are undoubtedly a contributory factor - they should be used to curb inflationary pressures and IMHO they are not high enough to rein in what is unsustainable inflation in housing prices and mounting consumer debt. The result - I'm wincing in anticipation of the next recession. People are more exposed now than they were even in the late '80's, so even a relatively shallow recession is going to hit proportionally harder than the last one and it will be in no small part because of mortgages and consumer debt.