DOOMED - More house price falls 'likely'

[AtW]

Are you suggesting that taking out a mortgage is wrong?

Depends on how much you borrow and whether you are "borrowing up" as DimShrimp so eloquantly put.

[PM-Junkie]

Government policy will always tend towards stimulating a growth in house prices. The reason for that is that such growth prompts people to go out an borrow money against that growth and spend it on goods and services. Our economic and financial system has "evolved" such that it is totally reliant on the expansion of credit.

That system hasn't been fixed. If you look at the measures adopted by governments and central banks across the world, all they are doing is papering over the cracks (example - look at the resistance and foot dragging to the separation of traditional high street banks from their more risky counterparts like investment banks...that should be an absolute no brainer).

So whilst, IMHO, I think this recession will end sooner than some people think, the growth over the next cycle will be lower than a lot of people expect because of the problems inherent in the system itself (and the debt!!). So in 8-10 years' time this will happen again....and the next one will make this recession look like a garden party because we will still be paying for this one.

[expat]

You would have had to borrow £220K, as you paid off £20k of the mortgage. However, despite the larger debt, you would have had >20% deposit for the new house, whereas now you'd have <5%.

Thanks mate. That was my point.

In fact, far from trading up being made easy, you can't even trade level: your former £200k house is now worth £150k, but if you sell for £150k and pay off the mortgage, you now only have £10k deposit to buy a £150k house. You won't get a mortgage on that.