The edge of the crash?

[shaunbhoy]

Sounds like a big risk to me.

You are probably right. Just stay at home with mum and dad and maybe the government will give you a house one day.

[ChimpMaster]

I'd actually quite like to own my house at this stage of my life, but I look at the extra £500 per month I'd need for an interest only mortgage (more like £700 if I want to repay it), plus the lack of security that goes with being a contractor and the way each job seems to be in a different area , and I wonder why the hell I'd choose to do that to myself.

Why not just save as much of your contract income as possible, and then say 2 or 3 years later buy a house for cash?

:-/

[shaunbhoy]

So, you KNEW that prices would go up 300% did you? It's nothing about having balls, more about common sense.

And the common sense approach is to rent for life is it? Well, each to their own. Personally I'd rather own the place I am living in than pay someone else's mortgage for them because I was too chicken to ever take the plunge.
Still, there always have to be followers as well as leaders I guess.

[lws]

And the common sense approach is to rent for life is it? Well, each to their own. Personally I'd rather own the place I am living in than pay someone else's mortgage for them because I was too chicken to ever take the plunge.
Still, there always have to be followers as well as leaders I guess.

Who said anything about renting for life? Like I said, our rent is LESS that a interest only mortgage would be on the same property, so we're hardly subsidising our landlord are we?

In the meantime I'll just bank the difference and wait for a sense of normality to our ridiculously overvalued property market

[Weltchy]

Having just bought a house in the last month, as a first time buyer, I might add, I've had to have a good think about all this. These are a couple of the points that helped sort out any sleepness nights I might well have about house price crashes.

Using Japan as a model for house prices, as supply and demand increases, so does the cost, regardless of affordability. Therefore, with less houses available on the market and more people flooding in, the chances of a house price crash will decrease, it could be argued

You would hope that everyone learnt their lessons from the 70's, 80's and 90's and will do their utmost to avoid another crash. Fair point that relying on someone else, such as a government is a worrying thing, but still.

Eventually, even if a house price crash does occur, as long as I can afford the repayments, it doesnt matter as the price will most likely rise to the same level again at some point, as long as I bide my time.

[expat]

Eventually, even if a house price crash does occur, as long as I can afford the repayments, it doesnt matter as the price will most likely rise to the same level again at some point, as long as I bide my time.

That is correct, however:
1. if interest rates go up so much that you can't afford the payments, you can't get out gracefully either. Try interest rates doubling within a year, plus your job market heading south: can you handle it? It has happened.
2. The price may rise again to what it was. During this time, you have taken all your money and in effect failed to invest it. That will hurt later, even if only when you retire, when you will not have the wealth that you might have had.

[shaunbhoy]

wait for a sense of normality to our ridiculously overvalued property market

Don't hold your breath then!

[sasguru]

It's interesting reading the economics pages. America's economy is slowing drastically (house prices are already heading south). Traditionally we would have followed as surely as night follows day, however some economists are arguing that we are now so tied into the rest of the world's economy and less dependent on the US so that it won't matter. Time will tell.

[shaunbhoy]

It would help the uninitiated here to stop drawing ridiculous parallels with what has happened in Japan, the USA, or Timbuktu for that matter. Behaviour towards owning property in this country is pretty unique to here as the British mindset is different to most others when it comes to owning your own "castle". I am not saying it is a good or wise thing, but until you grasp the notion that we look upon house-ownership differently to everyone else, you will never stand a chance of understanding the market here.

[sasguru]

It would help the uninitiated here to stop drawing ridiculous parallels with what has happened in Japan, the USA, or Timbuktu for that matter. Behaviour towards owning property in this country is pretty unique to here as the British mindset is different to most others when it comes to owning your own "castle". I am not saying it is a good or wise thing, but until you grasp the notion that we look upon house-ownership differently to everyone else, you will never stand a chance of understanding the market here.

Wrong as usual, Shaun

http://www.dbresearch.com/PROD/DBR_I...0000203236.PDF