i wanted house prices to fall as i knew it would be the only way i could ever afford one, but now the economic future looks bleak, so many people could lose their jobs and homes... According to this article the gap between the rich and the poor will lead to revolution in the US!
this makes interesting reading, i hope he is wrong (sort of)!
http://www.propagandamatrix.com/arti...e_predicts.htm
Well, it's going to be an interesting few years and who knows, the tin foil hat brigade could be right. I wouldn't be surprised if the UK didn't see some unrest in the next few years judging by the financial tsunami that is heading our way.
The amount of spin that has been force fed to the media is quite frankly scary in the UK. The government have been telling everyone that everything is fine, when anyone who was even mildly awake could see that there was some big problems on the horizon. When the government start making predictions for house price drops, double or even triple them!!
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I'm amazed at how badly the schools have tought people, becuase so very many people have this same desire.Originally Posted by j1979
Let me explain, if its only the price that falls, not a drop in demand, or increase in supply, you still won't be able to afford one.
Think of it this way. If house prices cost £250k, you earn £35k year, and you have only a £35k deposit, with mortgage companies offering 6 times multipler. You can't afford a house. However, the person on £36k per year can and will be the one who buys it, setting the cost just out of your reach.
If house prices drop because of a constraint of credit, and mortgage companies start offering only 4 times, same thing goes, the person who is on 37k will be the person who affords it, this time at £180k say, the most you on 35k could afford would be £175k. Once again your out bid.
So the only way you could hope is for a drop in demand, or increase in supply.
Now as we're heading into a full blown recession the likes of which most of us here are too young to ever have seen (its probably going to be worse than when old labour screwed things up in the 70s, looking at stock trends this looks more like the great depression in the US).
Good news on that is there will be a drop in demand becuase fewer people will have jobs. Bad news is that it could be you who has no job!
throw new ArgumentException (String, String, Exception)
Exactly why I've been calling for more houses to be built! Stupid local councils don't like it though and nor do most residents with their own houses - each time a local election candidate actually put forward the case for building more houses they lost resoundingly.
i would not be getting a mortgage. i have saved 50% of what i intend to spend and family will lend me the rest. im a poorper but my family are in a position to help.
ohh and sheffield and manchester city centres are full of completely empty new build flats, with half finished projects everywhere that developers are rushing to complete! the last flat i was looking at was being sold by HBOS (halifax estate agents) it sold, but last year they were going for £180k it had a guide price of £70K. so my point is there is low demand, migrant workers are leaving, investors are not able to rent as easily so there are lots and lots of flats on the market......at least here in sheffield the only places that are being sold are with huge reductions. A lot of investors are currently refusing to drop there asking prices. its a recipe for disaster.
as for the rest of the economy it does not look good even to my untrained eyes.
Last edited by j1979; 15-11-2008 at 12:51 PM.
Do you mean pauper? If you do, I doubt you are, if you have saved up for half a house - unless it's a dolls house
Do you mean pauper? If you do, I doubt you are, if you have saved up for half a house - unless it's a dolls houseyes i did, knew it didn't look right!! ive saved half of a 1 bed flat in the north of england. not quite London prices. im looking at spending 45 to 50.
anyhow can we try and keep the thread on topic.
Do you mean... taught?
Don't worry the worst and most likely time to spell intelligence wrong is when questioning someone else's
He is Dyslexic so I think we can forgive him the odd spelling error, although there is a firefox spell check plug in..
Anyway, I think Theanimus is using some flawed reasoning there because he isn't taking into account saving and he isn't taking into account debt. I might earn 10k less than somebody but then they might spend 12k a year more on living expenses and whatever else than I do meaning that I am saving a lot more than they are if they are. You also have to factor in the fact that not everybody has good credit and might not be free of debt.
I for one want to see houses come down in price a LOT, houses are massively overvalued and if prices come down then that means I can afford something bigger/better for the same money. Yes somebody may outbid me but at this stage its a buyers market so only a fool would bid the asking price on anything at the moment. If I were buying a house (and I am not going to yet, I think there is a way to go until we hit the bottom of this) there are many on the market which are not shifting, repossession's are going up hugely so the opportunity to get something for a reasonable price will only increase as prices drop. Plus as I think I have secured my job for the next couple of years my wages will be worth more due to the levels of unemployment. This recession should be good times for many younger people like me, so long as they can stay employed.
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I didn't realise TheAnimus is Dyslexic but I was only kidding around anyway, it's just funny which words people spell wrong and more importantly when they do it
I feel quite lucky in my chosen profession right now (Teaching). I'm still training but it shouldn't be too difficult to walk into a job at the end of it and so I'm not having to worry too much at all. I feel sorry for young people who are struggling though especially if they have taken a silly mortage to buy a house.
It's plots of land I want to fall in price. I've decided* I want to build me next place and really jump up the ladder.
*this will probably change tomorrow.
But mortgages was just an example,
you say only a fool would offer the asking right now, well thats fine but if there are 2 fools the same principle i illustrated above holds true, its what people can afford. The example i gave was taylord to the credit crunch, but you'd have to be a fool to pretend leverage makes no difference to investment and expected returns. Just because you've got x in savings dosen't exclude you from been leveraged, its all a case of supply and demand.
throw new ArgumentException (String, String, Exception)
Just point out I'm not nit picking over spelling and grammar, I'm sure plenty of my posts are dubious, just clarifying the meaning of the post.
The comment was questioning someone who has saved 20K thinking they are a pauper.
Last edited by manwithnoname; 16-11-2008 at 07:32 PM. Reason: spell a word wrong .. doh
Oh deary me. Burn the working classes!
To err is human. To really foul things up ... you need a computer.
No its worse than that, it seams the teachers who are too busy reading the guardian to realise basic ideas of money.
A student teacher friend of mine (whilst at my celebratory drinks regarding my promotion been made perminant (the people i work for are ruthless in applying the peter principle)) was gushing at how she couldn't understand that the work we do was 4 times harder than hers.
This was a number she'd plucked out of the air going, trainie teacher say £25k, senior dev, 100k.
She'd decided that ment that the free market was saying we are 4 times 'better'. And took us about 3 hours to try and explain that supply and demand really doesn't make it work like that.
I still don't think she got the notion. People try to introduce linearity where there is none!
throw new ArgumentException (String, String, Exception)
Eh, i'll hopefully be sitting with an MPhys by the time the recession/crunch/etc is really at rock bottom, so with a bit of luck i won't be out of a job just yet
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