Reply to: What % do house prices need to fall before you are in negative equity?

[DiscoStu]

yeah but the guy who bought it 7 years ago for peanuts is still laughing. That's just the market for you, good times, bad times.. it's all about offloading at the point the market peaks again maybe 10yrs from now or whenever.. people need to think long term about property, not just what is happening today. If you are 'living' in the house then it doesn't matter if it's worth £500 or £500,000 you still need a house to live in. At the point you need to sell it to get all that money out just hope you can do it when the price is good.

People go on about 'losing' money on their house, their only losing what was a speculative figure some months ago but they forget they made 40%+ gains from 2001-2006.

Unfortunately for my landlord it's a 12 month old new build. I give it 6 months before it's worth less than he paid for it, and it'll be years before he'll be able to sell it for anything near what he paid for it.

... but SallyAnne will not be paying a mortgage or rent in 5 years time, but you will pay rent for the rest of your life. I think she'll have the last chuckle!!

I have no intention of renting for the rest of my life, but I'm happy to keep on renting until I can buy with a small mortgage.

[ASB]

That's fine as long as you can guarantee you don't need the cash at hand at any time. I have enough to clear my mortgage right now, but if I did so, I'd have nothing to fall back on when something unexpected hits (like a recession or something)

Obviousl you pay more in interest on a debt than you gain in an investment, but paying off a debt is sunk money.

Obviously you have to find an appropriate balance. A lot of mortgages will also normally let you borrow back overpayments at the same rate with no fees etc so it can still be accessible.

[tay]

Blimey !!! You are in trouble !!

[Cyberman]

I dont have a mortage in fact I own the banks that hold the mortgages.

Churchill

Blimey !!! You are in trouble !!

[tay]

I dont have a mortage in fact I own the banks that hold the mortgages.

Churchill

[Cyberman]

I don't own any property, but it does make me chuckle that my rent doesn't even cover the amount the flat's depreciating each month, let alone the mortgage.

... but SallyAnne will not be paying a mortgage or rent in 5 years time, but you will pay rent for the rest of your life. I think she'll have the last chuckle!!

[chris79]

I don't own any property, but it does make me chuckle that my rent doesn't even cover the amount the flat's depreciating each month, let alone the mortgage.

yeah but the guy who bought it 7 years ago for peanuts is still laughing. That's just the market for you, good times, bad times.. it's all about offloading at the point the market peaks again maybe 10yrs from now or whenever.. people need to think long term about property, not just what is happening today. If you are 'living' in the house then it doesn't matter if it's worth £500 or £500,000 you still need a house to live in. At the point you need to sell it to get all that money out just hope you can do it when the price is good.

People go on about 'losing' money on their house, their only losing what was a speculative figure some months ago but they forget they made 40%+ gains from 2001-2006.

[TykeMerc]

I think one of the factors hampering house sales is EXACTLY this effect - a lot of BTLers are hanging about for the bargains.

Well anyone seriously considering investing in property to let out would be insane to buy while the market is clearly falling.
If I was buying property to rent out I would wait until I felt the market had hit bottom to get maximum value and potential future growth.

[Diver]

I think one of the factors hampering house sales is EXACTLY this effect - a lot of BTLers are hanging about for the bargains.

[TheBigYinJames]

Hmmm interesting and surprising poll results. It seems that most people can cope with a significant downtrend in price and that there might be quite a bit of pent up demand for BTLs later.
Of course CUK is not a representative sample of the population.

I think one of the factors hampering house sales is EXACTLY this effect - a lot of BTLers are hanging about for the bargains.

[BrilloPad]

Hmmm interesting and surprising poll results. It seems that most people can cope with a significant downtrend in price and that there might be quite a bit of pent up demand for BTLs later.
Of course CUK is not a representative sample of the population.

It is a representative sample of the population of a people using care in the community.

[sasguru]

Hmmm interesting and surprising poll results. It seems that most people can cope with a significant downtrend in price and that there might be quite a bit of pent up demand for BTLs later.
Of course CUK is not a representative sample of the population.

[bobsmithldn]

It's ok - I paid £60 for a bottle of Borolo on Saturday and spilt it al over my dress.

Sh*t happens

You were ripped off! Unless it was a bottle of Barolo ...

[TykeMerc]

That's fine as long as you can guarantee you don't need the cash at hand at any time. I have enough to clear my mortgage right now, but if I did so, I'd have nothing to fall back on when something unexpected hits (like a recession or something)

Obviousl you pay more in interest on a debt than you gain in an investment, but paying off a debt is sunk money.

I agree in general that debt is a bad thing, my mortgage is my only debt and fortunately I've managed to get it rather low.

That's much the same way I think about it, plus the cash in the offset accounts reduces the amount of capital attracting interest on the mortgage.
If I paid off the mortgage any remaining savings would earn interest on which I would pay tax at 40% and I wouldn't have instant cash available for contingencies. In my situation the offset mortgage is an ideal solution.

[ace00]

There is an argument that says doing any saving whilst you have debt is wrong. Pay off the debt.

That might be an argument but it is wrong.
What if you can save at 8% but have outstanding debt fixed at 4% ? Or how about if you can get 20% on savings and pay 0% on debt?