Weak pound on the way

[DimPrawn]

Forward 24 months. Interest rates at 9%. House prices halved, rental Market collapsed.

'oh why,why did I buy when everyone else sold and started renting'-AtW

I'd be very surprised if interest rates are above zero in 24 years time, let alone 24 months.

[AtW]

I'd be very surprised if interest rates are above zero in 24 years time, let alone 24 months.

WHS

I find that this whole property thing is gr8 - cheap rates and non-stop Sarah Beeny on TV.

[DimPrawn]

WHS

I find that this whole property thing is gr8 - cheap rates and non-stop Sarah Beeny on TV.

Norks!

[doodab]

I will have paid it off by then

And still be in negative equity

[PAH]

And still be in negative equity

That only matters when you come to sell, if you need to sell.

Same with gold, sterling, and any other asset. The winner is the one who sells for higher than they bought.

At the moment the only reason to delay buying a property (if you are looking to buy) is to see if prices drop significantly in coming months.

Could be a gamble though if inflation and QE cause house prices to rise against sterling. Banks don't need to pay savers proper interest while they're getting cheap loans from other sources, so those in sterling waiting for the price drops could lose out further.

[PAH]

Mortgage advisor offered special deal with 3.2% tracker

Not sure that's so special. There's a 10 year fixed at 3.99% on moneysupermarket (requires minimum 30% deposit).

So a tracker only makes sense if you think mortgage rates will drop further or not rise in the next 5 or more years. Especially when only saving a few quid a month. Unless you don't have the deposit.

3.99% fixed for 10 years looks a very good deal to hedge against pending chaos unless I'm missing something?

[AtW]

Not sure that's so special. There's a 10 year fixed at 3.99% on moneysupermarket (requires minimum 30% deposit)

There is even better deal there -0.5% (requires 110% deposit).

[PAH]

There is even better deal there -0.5% (requires 110% deposit).

Too early in the decade for me to compute that one.

[BlasterBates]

But if salaries stagnate, which they will, then how will house prices rise. The way I see it we're heading for a period of inflation of everything but houses, as effectively the West becomes poorer, to make up for the fact that they lived beyond their means for a while, at the cost of the later generation. In a way it's sort of a global adjustment where India and the UK converge.
In the future your energy, bill, car, stereo and computer will become hugely expensive, so Britain will be rather like an Emerging economy with not much technology and dirt cheap housing. Might be worth thinking about building an outside toilet in the backyard.

[scooterscot]

But if salaries stagnate, which they will, then how will house prices rise. The way I see it we're heading for a period of inflation of everything but houses

In Japan it is typical for mortgages to be passed to the next generation. Our currency is weak, surely the only way is up. That'll take 10-15 years as it did Japan.

Hopefully by that time my BTL's shall be fully paid for my children/s use.