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334 sats \ 19 replies \ @orthwyrm 3 Jul 2023 \ on: Daily discussion thread
Here in the UK I have been reading many horror stories of rapidly increasing mortgage payments, which is all further compounded by the rising costs of food and energy. It's not uncommon for people to be paying +£1000 PCM more now than they were a couple of years ago.
I am feeling somewhat vindicated in my decision to not purchase a house a few years back. Part of that is because Bitcoin has since appreciated more than any house has since I first entered the space. But more importantly, I can't imagine having a 6-figure debt over my head where the interest rate is controlled by an increasingly out-of-touch elite who couldn't give two shits if I went bankrupt or starved. And if shit really hits the fan, a possibility that seems more likely by the day, who knows what that property will even be worth a few years from now.
The UK housing market exhibits all the signs of being a bubble unrecognised by the majority of people - particularly by mortgage holders themselves.
The 80s Thatcherite mania of home ownership is still strong in the current generation (and help for many first timers comes from ‘boomers’ getting their offspring onto the property ladder). This is in contrast to large parts of Europe which still has high proportions of home renters.
Whilst, as a hard asset, home ownership is a good option - especially given the amount of leverage you can take - you can’t sell into a falling market without pain and you can’t eat bricks and mortar.
In truth the banks are locked to the fate of their borrowers, the Government are beholden to their sacred property cow and its worshippers and many borrowers are now trapped by their mortgage.
Interesting times…
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Yep. Despite everything, I'm still regularly hammered with advice to purchase a property from well-meaning colleagues and family members because houses "only go up".
Who knows if they're right. It sure looks like a bubble, but groupthink can carry a market longer than any rational person would expect. It's certainly the case that analysts smarter than me have been prophesizing the downfall of the housing market for years and years now, yet here we are.
What I can say is that the idea of locking myself into a £250k loan at 6-7% interest seems borderline insane and is not a gamble I am willing to take. Especially when the loan is against an asset carrying uncomfortable levels of counterparty risk; if your neighbourhood turns into a dumpster fire or your government decides to raise taxes on home ownership, good luck passing on your hot potato to the next sucker.
There is a decent argument to be made that Bitcoin will begin to demonetise softer assets like gold and real estate. Those would be very interesting times indeed...
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Agree on all of the above.
Not to make light of the entirely avoidable and criminal tragedy that befell Grenfell… but there are people now locked into mortgages on houses and flats they cannot sell. This is wholly the responsibility of lax regulation and weak politicians in the pay of building companies. And no fault of the mortgage holders.
Real estate will always have some value as they aren’t making anymore and you have to live somewhere but Bitcoin is the harder asset and much more affordable. I’m backing Bitcoin.
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You can't completely demonetize real estate, people need a place to live and that won't change.
Also, real estate is not softer than bitcoin, it has a fixed supply.
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The supply of money for it is the problem, not property itself. Property should not have exchange value. If you can't make the money to pay the bills of keeping the land it's overpriced. And it's probably overpriced because of banks suppressing interest rates so they can keep milking the money supply.
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I can't wait to see the banksters favourite racket eaten by Bitcoin.
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Western europe is full of renters but eastern europe half the people own two properties and the rest will inherit one in a few years.
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Yeah man inflation is completely out of control in this country. I'm not planning on being here in 2024 if I can at all arrange it.
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Where are you planning to go? I've considered it too.
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haha. South America, Africa or Siberia. I have a friend in Mexico but maybe he wandered back south again since I last heard from him. Obviously not a war zone.
I do rather miss the balkans though, maybe I'll end up back there again.
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Yeah, it's a bit strange when debt is bad in all cases except for buying an incredibly expensive house.
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Here in the UK I have been reading many horror stories of rapidly increasing mortgage payments, which is all further compounded by the rising costs of food and energy. It's not uncommon for people to be paying +£1000 PCM more now than they were a couple of years ago.
It sounds like a lot of UK home owners have variable rate mortgages. I don't know why anyone would sign up for that kind of mortgage, especially considering how badly people were burned during the 2007 housing crisis. Those who don't learn from history...
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I don't know why anyone would sign up for that kind of mortgage
If it's the only option available in the country, then that's your answer.
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We're talking about the UK, where variable rate mortgages are not the only option.
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They only have fixed for a few years only, then it turns to variable.
Example: HSBC UK has up to 5 years fixed, plus if you have a fixed mortgage there are fees like early repayment fee, booking fee, etc
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I stand corrected.
That's actually completely insane. With a 25 year mortgage, you'd be guaranteed to have to deal with at least 2 recessions (which are typically 7-11 years apart), any one of which could push your mortgage payment beyond what you can afford. In the best case scenario, you're savings would get wrecked partway through the mortgage term.
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And they call you a conspiracy theorist when you say the banks are bleeding us dry!
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It blew my mind the first time I heard about the rarity of fixed rate mortgages like we have here in the US. I don't know if the US has more fixed rate mortgages due to free market forces or regulation. My guess is a bit of both. I can't imagine taking out a 20 year variable rate loan. Makes me wonder if variable rate mortgages lead would lead to less debt which might lead to lower real estate prices (a force driving down market price).
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Likewise, I was surprised to learn that you guys in the US had access to such long term fixed rate mortgages! I'd assume that your system promotes a greater accumulation of debt and thus pushes up house prices.
Ten years ago the average UK house price was ~£170k, and now it is sitting at around ~£290k (a ~70% total increase, or ~5% / year). Which doesn't seem so bad, until you realise that average wages have only risen by ~20% in the same time period.
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