Not any more. The Isle of Man is very expensive.stonerblue said:Chancy Termites said:Wow I'm shocked at everyone saying "yes, buy a house now". Since the last Labour government destroyed the world financial markets they, and the current government, have been going out of their way to prop up house prices by keeping interest rates at unsupportably low rates, giving direct subsidies to new buyers and huge bailouts to lenders.
Make no mistake though, they can't keep it up forever. They will run out of our money to spend on the subsidies (well OK that happened years ago) and market forces will win the day eventually. Interest rates have to go up sooner or later and when they do, they could (and in my view probably will) rise very quickly indeed. Interest rates are only partly linked to the UK economy - they are influenced just as much, or maybe even more by other countries' interest rates and it looks likely that others, particularly the US, will be increasing theirs soon and ours will have to follow suit. If (when) inflation gets out of control, then they will have to go up substantially. All the subsidies to borrowers are being paid for by government borrowing anyway and one day we will have to bring our public finances under control.
So in a nutshell, now is the worst time to buy a house for a few decades. If you do, your mortgage payments are going to spiral out of control while the value of your house drops like a stone. Do you really want a £100,000 mortgage at 9% so you can live in a house worth £60,000?
what about a long term fixed rate mortgage?
-- Sun Sep 01, 2013 10:57 pm --
davymcfc said:I hope so. Just had an offer accepted on a two bed terrace £162k
i'm guessing you don't live round here...
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Is now the right time to buy a house?
- Thread starter mancmackem
- Start date
sir baconface
Well-Known Member
Chancy Termites said:Wow I'm shocked at everyone saying "yes, buy a house now". Since the last Labour government destroyed the world financial markets they, and the current government, have been going out of their way to prop up house prices by keeping interest rates at unsupportably low rates, giving direct subsidies to new buyers and huge bailouts to lenders.
Make no mistake though, they can't keep it up forever. They will run out of our money to spend on the subsidies (well OK that happened years ago) and market forces will win the day eventually. Interest rates have to go up sooner or later and when they do, they could (and in my view probably will) rise very quickly indeed. Interest rates are only partly linked to the UK economy - they are influenced just as much, or maybe even more by other countries' interest rates and it looks likely that others, particularly the US, will be increasing theirs soon and ours will have to follow suit. If (when) inflation gets out of control, then they will have to go up substantially. All the subsidies to borrowers are being paid for by government borrowing anyway and one day we will have to bring our public finances under control.
So in a nutshell, now is the worst time to buy a house for a few decades. If you do, your mortgage payments are going to spiral out of control while the value of your house drops like a stone. Do you really want a £100,000 mortgage at 9% so you can live in a house worth £60,000?
An alternative view is that pent-up demand will inevitably push prices up in the medium term, if not the short term. That demand comes from a mixture of population growth, relationship break-ups and other factors. No way can I see a £110k house dropping to £60k. Where I do agree is allowing a margin for rising interest rates in your calculations. If you can barely afford repayments at today's interest rates you could be in trouble.
Chancy Termites
Well-Known Member
kinkysleftfoot said:Chancy Termites said:Wow I'm shocked at everyone saying "yes, buy a house now". Since the last Labour government destroyed the world financial markets they, and the current government, have been going out of their way to prop up house prices by keeping interest rates at unsupportably low rates, giving direct subsidies to new buyers and huge bailouts to lenders.
Make no mistake though, they can't keep it up forever. They will run out of our money to spend on the subsidies (well OK that happened years ago) and market forces will win the day eventually. Interest rates have to go up sooner or later and when they do, they could (and in my view probably will) rise very quickly indeed. Interest rates are only partly linked to the UK economy - they are influenced just as much, or maybe even more by other countries' interest rates and it looks likely that others, particularly the US, will be increasing theirs soon and ours will have to follow suit. If (when) inflation gets out of control, then they will have to go up substantially. All the subsidies to borrowers are being paid for by government borrowing anyway and one day we will have to bring our public finances under control.
So in a nutshell, now is the worst time to buy a house for a few decades. If you do, your mortgage payments are going to spiral out of control while the value of your house drops like a stone. Do you really want a £100,000 mortgage at 9% so you can live in a house worth £60,000?
Look at house price history over the last 50 years..........this includes several crashes, you will see that in general they double every 12-15 years
True but earnings have also risen over the last 50 years on average but with both there are fluctuations. Take another look at the graph - the time to buy is when house prices are low relative to wages but they're not at the moment.
stonerblue
Well-Known Member
davymcfc said:Not any more. The Isle of Man is very expensive.stonerblue said:Chancy Termites said:Wow I'm shocked at everyone saying "yes, buy a house now". Since the last Labour government destroyed the world financial markets they, and the current government, have been going out of their way to prop up house prices by keeping interest rates at unsupportably low rates, giving direct subsidies to new buyers and huge bailouts to lenders.
Make no mistake though, they can't keep it up forever. They will run out of our money to spend on the subsidies (well OK that happened years ago) and market forces will win the day eventually. Interest rates have to go up sooner or later and when they do, they could (and in my view probably will) rise very quickly indeed. Interest rates are only partly linked to the UK economy - they are influenced just as much, or maybe even more by other countries' interest rates and it looks likely that others, particularly the US, will be increasing theirs soon and ours will have to follow suit. If (when) inflation gets out of control, then they will have to go up substantially. All the subsidies to borrowers are being paid for by government borrowing anyway and one day we will have to bring our public finances under control.
So in a nutshell, now is the worst time to buy a house for a few decades. If you do, your mortgage payments are going to spiral out of control while the value of your house drops like a stone. Do you really want a £100,000 mortgage at 9% so you can live in a house worth £60,000?
what about a long term fixed rate mortgage?
-- Sun Sep 01, 2013 10:57 pm --
davymcfc said:I hope so. Just had an offer accepted on a two bed terrace £162k
i'm guessing you don't live round here...
Nice.
i view house prices as being pretty relative, so if it costs 162k then it will also sell for that . The only problem is getting on the ladder in the first place when prices are so high
kinkysleftfoot
Well-Known Member
Chancy Termites said:kinkysleftfoot said:Chancy Termites said:Wow I'm shocked at everyone saying "yes, buy a house now". Since the last Labour government destroyed the world financial markets they, and the current government, have been going out of their way to prop up house prices by keeping interest rates at unsupportably low rates, giving direct subsidies to new buyers and huge bailouts to lenders.
Make no mistake though, they can't keep it up forever. They will run out of our money to spend on the subsidies (well OK that happened years ago) and market forces will win the day eventually. Interest rates have to go up sooner or later and when they do, they could (and in my view probably will) rise very quickly indeed. Interest rates are only partly linked to the UK economy - they are influenced just as much, or maybe even more by other countries' interest rates and it looks likely that others, particularly the US, will be increasing theirs soon and ours will have to follow suit. If (when) inflation gets out of control, then they will have to go up substantially. All the subsidies to borrowers are being paid for by government borrowing anyway and one day we will have to bring our public finances under control.
So in a nutshell, now is the worst time to buy a house for a few decades. If you do, your mortgage payments are going to spiral out of control while the value of your house drops like a stone. Do you really want a £100,000 mortgage at 9% so you can live in a house worth £60,000?
Look at house price history over the last 50 years..........this includes several crashes, you will see that in general they double every 12-15 years
True but earnings have also risen over the last 50 years on average but with both there are fluctuations. Take another look at the graph - the time to buy is when house prices are low relative to wages but they're not at the moment.
Buy when others fear to buy..........that's when you get the best deals