More doom and gloom in the housing industry

[temi]

I was attracted to this new on BBC today:

Mortgage lending for house purchase by the UK's main banks has fallen to its lowest level on record.
The British Bankers Association (BBA) said that in May, the number of new mortgage approvals to home buyers fell to just 28,000.
That was a 20% fall in just one month and 56% down from May last year.



You can read the full story here

[Paul Carcone]

I still think that there is a deliberate attempt by the government and media to make all this seem a lot worse than it is...both for their own ends. Whatever the pressure that has been created, a secpnd drop in the wholesale price of oil has been recorded on the market...so hopefully this will be the start of at least a bit of a revival.

That said, I'm a big fan of conspiracy theories...!

[Jeddo]

Paul, While I agree with you that the government will do whatever it can to capitalise on any situation to save its own neck, I wholly dispute the notion that they and the media are trying to make things seem worse than they are.

If anything, they haven't yet fully recognised or admitted just how DIRE the situation is.

I applaud your optimism, but there is a whole lot of excrement on its way to the rotating blades and NOTHING is going to stop it...

Just my opinion of course Based on what I've been reading.

[Peter White]

Hi Temi

Thanks for sharing that link...

[Paul Carcone]

As expected....oil prices have dropped to a level much more conducive for business and this is in spite of the trouble in the Caucauses.

The situation isn't "dire" for the vast majority of people if you really analyse the situation objectively without listening to the howls of woe and fear provocation that sells newpapers.

As I've written before...you only actually "lose" money if you come out of the housing market altogether...and very few of us do that unless we emigrate or die. Those of us upgrading our houses are able to do so for a much smaller price differential and those trying to get on the housing market should find properties more affordable - and should find banks only willing to lend them what they can truly afford.

Additionally, the most basic rule in economics is that of supply and demand...the UK is a small island with a lot of people on it...and we all still cling to the notion that you have not really "made it" until you actually OWN some property. As such, there will never be a massive and prolonged downward spiral. This is just a sharp correction that is being blown out of proportion by the media for sensaionalisation purposes...

[GlasgowGirl]

However - those of us who want to upgrade our houses can only do so if we can find a seller - and they are thin on the ground at the moment. Not that I'm bitter...

[Joe]

Originally Posted by Paul Carcone

we all still cling to the notion that you have not really "made it" until you actually OWN some property.

It is interesting that in many European countries people are happy to rent for their whole life. GG you could rent out your old property and upgrade into a larger rented place. It will cost you more, but you will get more space.

[Paul Carcone]

Sit tight...someone will come...

I agree with Joe's assessment above. This is precisely what I have done and this it represents a tidy little income - with your mortgage being paid by someone else. This allows you to move AND wait for the market to pick up. As such, you get your upgraded house for less than you will pay for it on the upturn and you can almost guarantee rental income because this market is hugely buoyant at the moment.

If you are worried about the tax implications of renting...it is very easy to show that you are actually making a loss (and you can carry this forward against future profits) and the tax returns are very easy to complete.