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| The UK housing market: a bubble about to burst? |
Its your Choice
by david
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#1000584
of 3278
 08 Nov 2002
05:56 PM |
| 800 pm is a lot to spend on rent, it is no doubt a nice area you are living in but it is a lot of money that you won't see again. I used to live in west kensington but bought in the east end as it was affordable. |
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clare - short termism
by T Blair
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#1000583
of 3278
08 Nov 2002
05:55 PM |
I agree with prescott. they clearly refined my point.
the overall movement of the market in the UK is up. Clearly to claim that renting is better than purchasing can be seen as short termist and idiotic. All you are doing is making somebody else rich. |
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I agree with Blair
by J Prescott
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#1000582
of 3278
08 Nov 2002
05:46 PM |
clare
why complain about rental rates - when you suggest you are renting since it is cheaper than buying? Well at least in the short term - but i will not suggest you are short sighted. |
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Reply to T Blair
by Clare
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#1000579
of 3278
08 Nov 2002
05:39 PM |
| T Blair - I am not talking about council housing I am talking about one of the most expensive parts of London. We rent a 2-bed flat for £1,600 per month. An identical flat is currently on sale at £499k. With a 20% deposit and 5% interest this gives an interest payment of £1633 per month and a total repayment of £2291. Since we rented the monthly rental prices for our area have come down further. Check out Foxtons website for NW3 if you don't believe me. Now tell me that prices are not overvalued. And yes I could buy in a cheaper part of London but why buy when renting is cheaper. |
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laughable Chris
by T Blair
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#1000578
of 3278
08 Nov 2002
05:37 PM |
Chris perhaps you can explain how the governments work on pensions, to remove tax relief on dividends, affected that market?
If this happened in the housing market we would have the same effect.
to compare us to germany is eronious - germany is a high rental market and therefore has a completely different structure to the UK.
I consider
New Labour
Old danger |
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tony's in control
by chris-to
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#1000577
of 3278
08 Nov 2002
05:32 PM |
Exactly.
The economy is well controlled, out of the Euro and 1000 miles from America, at least far enough to avoid being effected by any international downturn. The housing market is a source of growth for the UK economy, unlike in the past when, I concede, we were weaker compared to, say, Germany, and inevitably influenced by any international downturn. We're too strong now. |
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Oh dear
by True Brit
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#1000576
of 3278
08 Nov 2002
05:31 PM |
Not all landlords are like the infamous N. Hoogenstraten.
Renting a property can, in my experience, be a good experience for both parties.
Renting is slighty more expensive, but that is because you are transferring the risk!
Tenants, be good tenants. Landlords, be good landlords.
If you have a bad landlord or tenant, give your notice and move on! |
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housing market
by T Blair
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#1000575
of 3278
08 Nov 2002
05:25 PM |
Lets be honest here the economic factors now, in comparison to the 80's, are completely different.
There is no reason for a property crash given the current set of economic circumstances. Interest rates are at an incredible low level allowing all purchasers to fix in at rates that make good economic sense.
The only way i can possibly see an economic downturn will be if this current government "tinkers with the system" , as they did with the pensions market. If they add a tax on mortguage payments or house ownership - this could influence the market.
the population of this country is expected to rise by 1 million people over the next 10 years. these people have to stay someplace.
the respond to clares lies - this discussion is over the private market not council housing |
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gman
by Si
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#1000574
of 3278
08 Nov 2002
05:17 PM |
If your property ends up being worth much less in 5 years time then you should have waited, but it's not bad providing you avoid reposession, you can even move up the ladder as the difference between house-prices then would be smaller. Renting isn't that bad on the other hand in the meantime, it's just a question of kudos, cheap as rentals are now. There's never been a better time to rent if you're savvy and can haggle.
If it goes anything like a japanese deflation then you could be completely screwed over the next 20 years or so. Seriously.
Good luck. |
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Gman's situation
by david
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#1000573
of 3278
08 Nov 2002
05:08 PM |
Gman, I think you would be fine as long as you are not currently pushing yourself to the limit. With my mortgage the provider would pay the interest of my loan for 9 months maximum should I be made redundant (though this insurance is cheaper for me as I am a civil servant).
I think one of the biggests questions that would influence first time buyers is "would I be prepared to live in this type of property for 10 years when I should be able to upgrade?". I don't think it is sensible to push your limits to buy a dingy studio as you could likely be fed-up with it in this time.
Good Luck with your house, |
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salaries CANNOT fall on the whole!
by chris-to
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#1000572
of 3278
08 Nov 2002
04:42 PM |
Comeon,
If even 5% of people are made redundant in this alleged 'recession', then the rest of us will still have our salaries, and be able to take out equity to give our children a push up the housing ladder. This will keep prices up, as long as interest rates remain low.
I'm alright jack, and so too could you be if you bought now... ;-) |
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Are you in trouble?
by Rob G
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#1000571
of 3278
08 Nov 2002
04:38 PM |
Gman,
I'd ask yourself whether you could survive for 6 months with your highest wage earner on the dole.
If you can, there's probably not *too* much to worry about just yet.
You don't work in the finance or telecomms industry by any chance? |
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More points to consider
by Nick S
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#1000570
of 3278
08 Nov 2002
04:26 PM |
As one who has followed this forum with great interest, I would like to offer more points for consideration (particularly by the boom-boom fraternity)
John (post 507) suggests that the housing boom and consumer spending could be "the government's get out of jail card". It's a nice idea but I simply don't believe that this will work. In a world of low inflation and low income growth, increased borrowing today is merely bringing forward future consumption. Without a big rise in incomes, consumption will fall from current levels in future as consumers either rein in spending to manage their existing debt levels, or run up so much debt that they go bankrupt. (It doesn't matter how much your assets may have risen in value - if you can't find the money to service your debts, you're in trouble. It is exactly the same priciple as apparently successful companies facing insolvency because they run into cash flow problems and cannot pay their bills.) When this happens, there are bound to be further effects on company profitability and hence employment and/or pay rise prospects.
There are other problems with this approach: rising house prices do not generate more jobs. They do, however, lead to inflationary pressure through increased wage demands.
Assertions that "employment remains stable" are too simplistic. Are incomes remaining stable - or rising? Unemployment figures can (and are) used to mask the fact that well-paid, skilled employment is being lost and the numbers are being made up with low paid jobs in the much-lauded "service sector" which too often means earning slightly more than the minimum wage for serving burgers or answering telephone calls nicely.
Also, please could someone explain how a slowdown in house price rises on its own will make housing more "affordable". The point is that at the moment, house prices are so inflated in relation to average incomes that only a closing of this gap will increase "affordability". The long-term average house price income ratio is about 3.6:1 against current figures of 4.3:1 to 6.?:1 depending on whose figures you believe. This means EITHER a fall in house prices OR a period of several years where incomes rise faster than house prices. I'm not willing to bet that the second of these two is what we will experience.
I didn't know whether to laugh or cry when I read this articles from Telegraph Money in 2000. Read some of the related articles and note the quoted figures of prices rising 4.2% a quarter (not 4.2% a month).
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2000/07/12/
cnhou12.xml&secureRefresh=true&_requestid=42280
Over the last two to three years both the Halifax and Nationwide have consistently had to revise (upwards) their estimates for house price inflation. This suggests they are very poor at forecasting future trends. Why should we give their "assurances" of a gentle slowdown and no crash any greater credence?
I look forward to comment from John, Extradry, Rev HK and others with anticipation...
(Edited by FT to break long URL.)
[This message was edited by Monitor_JL on 08 Nov 2002 at 05:03 PM.] |
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what do you think?
by Gman
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#1000569
of 3278
08 Nov 2002
04:12 PM |
Rather than discuss what could should and would happen in the market I feel like talking about my current situation and se what peeps think!
We have just bought a house, 3 bed terraced in a nice area, for 124500, we paid £8125 as a deposite and the rest is mortgaged and currently the outgoings are £670 a month not including bills life assurance etc.
Our total income a month after tax is about £2100so at present our mortgage sits at 32% of our total income.
Are we in trouble? Your thoughts? We wont be moving for quite a few years (ten, fifteen maybe) so does that matter???
Personally I can't see house prices crashing, maybe a slow in their rise or a slight drop but no crash...
The G |
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Another option
by Engineer
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#1000568
of 3278
08 Nov 2002
04:11 PM |
Hoogstraten, you missed another option. I know a group of travellers, and I also know where you live!
I'm sure you will get on well, as they share your enthusiasm for living off the backs of the silly suckers who keep the country running! |
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