Sparkle2nite

.....don't forget little 'ol me........all in the same boat.

Sparkle

TruBrit

your posts are always so positive

Sparkle2nite

I feel quite sad reading all these threads. Most of us left the UK for a better life and thought we were all going for ever. In such a short space of time the majority of us are back home and trying to pick up the pieces. It saddens me to when I think about our home we sold to finance the move and feel quite daunted at the prospect of getting an even bigger mortgage now we're back. However, I don't feel I'm quite 'home' yet living in this rented house and long for the day I'm in my 'own place' again where I can DIY to my hearts content and hang a picture anywhere I damn well like!

Sparkle......colour chart and hammer raring to go.....

moving2montreal

i wonder how high the interest rates will be when you get back. some people are thinking 7% by the end of the year.

BigDavyG

Ahh, but prices currently well exceed the means of most first time buyers, and a further hike in rates will impact them just as must as investors.
Expect a drop before the 'demand exceeds supply' factor kicks in and first timers start to snap up properties that are affordable to them.

esperanza

There are still first-time buyers out there who are buying - with friends or siblings, or with support of parents.
In the meantime, those who cannot buy are renting, thus propping up the buy-to-let investors.

I maintain that there will be a plateau rather than a drop, unless there are some serious interest rate rises. As I said, I think (hope!) that the govt/bank are not that stupid. But who knows!

davo453

7% sounds good to me with money in the bank. In contrast to most it seems, we landed in Australia with very little but leave with a fair bit.

There were times in the mid 90's were (although it wasn't even considered) a move back to the UK looked impossible.

But at the end of the day as said before if you own your won home or have a smallish mortgage on it and it is your only property. A falling housing market is not a real problem, as if you sell in that market you can still buy a home for the same money in the same market.

It's the investors that get hurt. The graph on the housepricecrash site does look over bought, corrections do happen and it's generally when most people are saying it won't happen. the 2000 tech wreck in the stock market was like that.

I wise stock market investor is reputed to have said when you find your taxi driver advising you to get into the stock market, it's probably time to sell. I think you could draw a parallel there with by to let properties.

Dave

BigDavyG

Not that stupid ???
Not that stupid to have average house prices equal to 6 or 7 times the average wage ??
Not that stupid to have a significant percentage of the population rely on property for their retirement income ??
Not that stupid to allow lenders to finance ridiculous rates of lending ??

No, they wouldn't be that stupid, would they........

FPM

Spot on. That's exactly what happened in Sydney which resulted in an average drop of 12% on units (flats). People 'buy' into the spin about negative gearing and 'double your money' rubbish. But nearly to a person they get stuck because:

a) they understand the tax advantage, but fail to realise the capital gains resonsibility.

b) they live in the better dwelling and buy a cheaper (less desirable) investment dwelling. When they should be renting out the better place, and realise better CG options.

c ) This is a big one here (can't say for UK) many people simply don't understand what they are doing and the implications of an interest rate hike (or several). They don't take the time to work out what is best for them in their situation. They just do it because 'everybody else is'.

Sydney is experiencing the highest rate of mortgagee sales on record now. 4.800 bank repossesions in 2006. Mostly happening west and north west (less desirable). But the chasm between owning a house vs a unit in the north shore or northern beaches or eastern subs (very desirable) is getting wider and that market doesn't look like crashing, but it has slowed.

BigDavyG

To be honest even if the UK does hit a blip its unlikely to wipe out anything more than the past year's gains, even if that so to be honest I'm not sure how many people would be badly hit - maybe first time buyers, but then again with only one property your losses would be minimized.
In many areas investors who got in anything prior to 2006 should be fine unless rates take several bumps.

FPM

They say here, generally pre 2003 is the key. I've always held the belief that the UK housing trend seems to be about 2yrs behind Australia. In my 18yrs here, it has been proven to be a fairly accurate measure. Although the degrees to which the changes affect the homeowners would be different.

moving2montreal

to be honest, i think the british economy is going to follow the american economy and take a downward turn. im thinking we will enter a recession sometime in 07.

BigDavyG

Did I miss the American recession when I took a nap this afternoon or something ??

THEGREATIDIOT

It'd be better if we could do something about the s****y exchange rate!

esperanza

Hence my "But who knows!" comment.
Although I don't think the govt is resposible for some of those things - there has to be some involvement of market forces, unless you advocate some sort of communist dictatorship.

Even if there was a drop of 12% in property values, the overall trend would still be upwards - it would not be a disaster for many people, as long as they stayed put then the value of their homes would rise again and they would be fine.