r/Glasgow Tools

Title
Author	meepmeep13
Comment	I bought my first house in 2005, value crashed in 2008, and I eventually sold it in 2014 for 25% less than I bought it for. And you know what? It was still tens of thousands of pounds cheaper than renting over the same period. The counterfactual isn't other investments, it's against throwing money away. And from what I see, I got the worst of it, I know very few people from that period who actually ended up in negative equity, especially not by now. > In the 2008 crisis I seen people in Glasgow still bidding huge sums for flats that have now, in some cases, halved in price. Any examples? > but I can assure you that in the broader market it's currently over valued you're guessing, just like anyone else - you have no way of knowing whether the historical market values are a valid indicator of future performance, particularly in an area of relatively high economic growth like Glasgow > I've seen many friends blackmailed into staying in the same house (or go bankrupt) due to very high negative equity. In Glasgow? Really? Again, show me some pricing figures for anywhere around the city that would demonstrate this Glasgow's housing market is, at the moment, demand driven - there simply isn't enough decent central housing stock for the current growth in employment (and the growing trend for under-occupation with folk who can afford to living on their own in 2/3 bed places). You're not betting on global financial markets, you're betting on Glasgow's continued growth, which is connected but also separate. You can see this by simply looking at how little Glasgow's property prices actually declined in the 2008 crash - if you bought a flat at typical market values in 2007 you'd still be sitting pretty now. The simple shock tests that any mortgage advisor would apply continue to apply - could you comfortably afford your repayments if interest rates went back to 8-10%? What would you do if you lost your current job? Could you ride through a drop in property value? Might you have to sell at a specific point in time (e.g. relocating for work)? Yeah, house prices can go down as well as up, don't mortgage yourself to the hilt and give yourself plenty of breathing room, but you're buying a house for a much longer period than coronavirus will be around.
Reddit Link	https://www.reddit.com/r/glasgow/comments/fbtk07/current_financial_crash_advice_to_fellow_glasgow/fj6g9fw/
Created	Sun 1st Mar 2020 1:56pm
Status	normal ()

I bought my first house in 2005, value crashed in 2008, and I eventually sold it in 2014 for 25% less than I bought it for.

And you know what? It was *still* tens of thousands of pounds cheaper than renting over the same period. The counterfactual isn't other investments, it's against throwing money away. And from what I see, I got the worst of it, I know very few people from that period who actually ended up in negative equity, especially not by now.

> In the 2008 crisis I seen people in Glasgow still bidding huge sums for flats that have now, in some cases, halved in price.

Any examples?

> but I can assure you that in the broader market it's currently over valued

you're guessing, just like anyone else - you have no way of knowing whether the historical market values are a valid indicator of future performance, particularly in an area of relatively high economic growth like Glasgow

> I've seen many friends blackmailed into staying in the same house (or go bankrupt) due to very high negative equity.

In Glasgow? Really? Again, show me some pricing figures for anywhere around the city that would demonstrate this

Glasgow's housing market is, at the moment, demand driven - there simply isn't enough decent central housing stock for the current growth in employment (and the growing trend for under-occupation with folk who can afford to living on their own in 2/3 bed places). You're not betting on global financial markets, you're betting on Glasgow's continued growth, which is connected but also separate. You can see this by simply looking at how little Glasgow's property prices actually declined in the 2008 crash - if you bought a flat at typical market values in 2007 you'd still be sitting pretty now.

The simple shock tests that any mortgage advisor would apply continue to apply - could you comfortably afford your repayments if interest rates went back to 8-10%? What would you do if you lost your current job? Could you ride through a drop in property value? Might you have to sell at a specific point in time (e.g. relocating for work)?

Yeah, house prices can go down as well as up, don't mortgage yourself to the hilt and give yourself plenty of breathing room, but you're buying a house for a much longer period than coronavirus will be around.