clivem2
pfm Member
The classic advice is to always buy and sell in the same market to avoid this scenario.
Housing market
- Thread starter matt j
- Start date
Ponty
pfm Member
That’s what I’m trying to do at the moment. It’s an absolute nightmare. No way am I gambling with my primary residence even though things could well slow down.
Enfield boy
pfm Member
Well, I was addressing Ponty's points about debt junkies etc being "flushed out" by mortgage rates of 5% or more, this is not directly relevant to renters. I am certainly sad that anyone is made homeless through no fault of their own whether mortgagor or renter. However renters would never find themselves in a negative equity situation nor would they suffer the doubly whammy of a lender selling the property at a knock down price which certainly happened last time there were many in a negative equity situation. The mortgagor generally used to find themselves with a judgement against them for the difference of what they owed (plus costs) less sale price.
Enfield boy
pfm Member
If that is what happens, and it is as inevitable as you suggest, mortgage lending will be the greatest mis-selling scandal yet.
misterdog
Not the canine kind
If house prices are dictated by supply and demand, the highest number of new house builds for 20 years is hardly going to inflate the market.
The Tories have pledged to build 300,000 new homes every year.
Not everyone is happy with new estates popping up next door.
Ponty
pfm Member
Good luck with that. The govt has tried to ban recessions, which I’m afraid, are a natural part of an economic cycle. Without corrections, markets don’t function and everything will go to the moon, which in effect is what we are seeing with housing.
andyoz
pfm Member
They aren't made homeless. They can go and rent a place. They simply can't afford the asset they currently live in.
ks.234
Half way to Infinity
Just because we’ve always had recessions doesn’t make them natural. The natural world will suffer recession at periods of, for example, drought which then creates food shortage, but we long ago insulated ourselves from natural supply cycles with a buffer stock.
The reason we have periodic recessions is an economic system that relies on exploitation of economic resources so we still have peaks and troughs.
We could have a much more stable economy by creating a buffer stock of economic resources in the same way we do with natural resources.
Enfield boy
pfm Member
And still have a bloody great debt against their name. And private renters at the mo' are typically paying more than the mortgage costs.
andyoz
pfm Member
If people were doing proper 'worst-case' stress tests of say 6% interest rates and one person losing their job for 6 months then the housing market wouldn't be in this inflated mess. Don't rely on the bank to tell you what you can afford...work out your Worst Case scenario and if happy then proceed...if not 'sit'
The governments have stoked it along at every junction. I didn't hear one commentator question the Stamp Duty holiday...I did to my wife anyway as thought this might happen.
It's a mess!
Ponty
pfm Member
You’re painting a picture where no economic failure is allowed. Without failure there are no corrections. Without corrections, future generations will be paying interest only mortgages to the bank for life. If there is no risk to borrowing as much as you can, people will continue to do so and house prices will continue to rise.
Snufkin
pfm Member
I don’t think this is exactly what KS.234 is saying. My understanding is that we should move away from our ‘lean burn’ economy where we have little or no buffers available to a more stable model where we deliberately create slack for those inevitable downturns.
Ponty
pfm Member
Thanks for clarifying. Trouble is, if there was slack in the system it would inevitably become absorbed by politicians making short term, fire fighting decisions. Just look at govt debt and deficit levels, no chance of having a reserve!
Snufkin
pfm Member
I fear you are correct regarding the UK but some countries manage this.
ks.234
Half way to Infinity
The purpose of buffer stocks is not to create slack, but smoothing out the peaks and troughs the economy. This is obviously not popular with investors and speculation bankers who profit from placing protected bets on the turbulence, but the turbulence is a consequence of not controlling the economy, the turbulence is a product of monetary policy, it’s not ‘natural’
Not sure what you mean by no chance of having a reserve? We have had deficits and an accumulated deficit for 300 years or more and still managed to maintain reserves?
Ponty
pfm Member
Where would these ‘buffer stocks’ be held and who decides how and when they are used? Any notion of reserves is just funny money. Like saying I have £10K in a bank savings account when I owe the bank £10M.
Rockmeister
pfm Member
It's a crazy side effect of the inequality that exist in Britain.
Still If you want to live in Scotland? Just PM me lol
serious? Go a different route
get in car. Drive to desired location. Go to pub. Talk about your love of the village and how you dream of living there, but no one is selling sob
(oh and PS, you are a Londoner and loaded) and wait an hour.
After that, ever new entrant to the Cock and Hounds will be checking you out
SteveG
pfm Member
We struggled last year when trying to buy a place - getting the problem of properties being listed on Monday for which we'd arrange a viewing straight away for that weekend (as we couldn't view any earlier) but either finding out that the place had sold before we could view, or that a closing date was set on the Monday because they'd already had loads of offers (and when that happened we decided not to view as the end prices ended up being crazy high).
The same scenario almost applied to the property we eventually bought - listed Monday, viewing booked the same day for that Saturday (as we were working during the week) however in that case the lister did decide he'd let all the booked viewings go ahead before making any kind of decision. By the time we viewed it on the Saturday there had already been 4 offers, however our offer was accepted (after a little negotiation) as we were a cash buyer and not part of a chain - and we also negotiated getting all the listings for the property removed straight away in-case someone came in with a higher offer (not normally a concern here in Scotland, however it is an issue we encountered in England).
A friend of a friend (who lives in the same village) was recently looking for a house here and ended up finding a property (and a decent one) that hadn't been listed yet via local contacts. They managed to arrange a purchase without the property ever being listed, which is just as well as it's a desirable little cottage and there would have had significant interest. So putting the word out in the area you're interested in could work.
The same scenario almost applied to the property we eventually bought - listed Monday, viewing booked the same day for that Saturday (as we were working during the week) however in that case the lister did decide he'd let all the booked viewings go ahead before making any kind of decision. By the time we viewed it on the Saturday there had already been 4 offers, however our offer was accepted (after a little negotiation) as we were a cash buyer and not part of a chain - and we also negotiated getting all the listings for the property removed straight away in-case someone came in with a higher offer (not normally a concern here in Scotland, however it is an issue we encountered in England).
A friend of a friend (who lives in the same village) was recently looking for a house here and ended up finding a property (and a decent one) that hadn't been listed yet via local contacts. They managed to arrange a purchase without the property ever being listed, which is just as well as it's a desirable little cottage and there would have had significant interest. So putting the word out in the area you're interested in could work.
Sue Pertwee-Tyr
Accuphase all the way down
Easy to say, a lot harder in practice. If you lose your home because you can't pay the mortgage, you probably don't have any cash reserves left, which means you probably don't have the deposit for a rental property and, because of the default, you can't get a loan to cover it either. So there's a very real prospect of homelessness from a mortgage foreclosure situation.