DOOMED - More house price falls 'likely'

[BrilloPad]

Well, there needs to be a correction in the housing market, otherwise your average first time buyer will be a 46 year old divorcee with 3 grown up children.

Either it can happen through prices falling or rampant inflation - I know which I prefer.

Maybe all houses will be owned by a single person and the rest of us will rent...........

[TimberWolf]

Well, there needs to be a correction in the housing market, otherwise your average first time buyer will be a 46 year old divorcee with 3 grown up children.

Either it can happen through prices falling or rampant inflation - I know which I prefer.

Yes, but there are other things wrong with the economy that need correction, e.g. GPs on £billions of pounds a year which won't be cured by falling house prices. I think rampant inflation is better.

[AtW]

I think rampant inflation is better.

When inflation is out of control it is very difficult to get it back to low levels: high inflation kills investment into companies and create jobs.

[expat]

And people wanting to buy a bigger house or a house in a better area.

Not if they still have a mortgage.

Ex: Bought your house just a few years ago for £200k, now want to sell up and buy a bigger house, let's say one that was £280k at that time.

Suppose you had paid £40k deposit, and got £160k loan; and have by now paid off £20k.

Loan now £140k outstanding; house prices down 25% so yours worth £150k; new house worth £210k

Sell for 150k. Pay off loan, have £10k left for deposit on new house, which costs £210k.

Doesn't look to me like it has become easier to buy.

[DimPrawn]

Not if they still have a mortgage.

Ex: Bought your house just a few years ago for £200k, now want to sell up and buy a bigger house, let's say one that was £280k at that time.

Suppose you had paid £40k deposit, and got £160k loan; and have by now paid off £20k.

Loan now £140k outstanding; house prices down 25% so yours worth £150k; new house worth £210k

Sell for 150k. Pay off loan, have £10k left for deposit on new house, which costs £210k.

Doesn't look to me like it has become easier to buy.

So now you have to borrow £200K to move up. Before you would have had to borrow £240K, so now £40K less in debt.

[BrilloPad]

So now you have to borrow £200K to move up. Before you would have had to borrow £240K, so now £40K less in debt.

I waited before starting this thread as I expected you to start it. You are slacking...............

[DimPrawn]

I waited before starting this thread as I expected you to start it. You are slacking...............

Too busy making money to waste time on CUK.

Ciao.

[AtW]

So now you have to borrow £200K to move up. Before you would have had to borrow £240K, so now £40K less in debt.

"Borrow" your way up, eh?

[Pinto]

So now you have to borrow £200K to move up. Before you would have had to borrow £240K, so now £40K less in debt.

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%.

[BrilloPad]

"Borrow" your way up, eh?

Are you suggesting that taking out a mortgage is wrong?