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Debate House Prices
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Buy to Let is the British subprime
Comments
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Gorgeous_George wrote: »The major reason is the credit crunch caused primarily by dodgy American mortgages. Without the credit crunch, properties would still be somewhere near their peaks because they are based on what the banks will lend (if the bank will lend enough, buyers will pay it).
However, the effect of higher mortgages and tighter lending means those 'owners' whose homes fall into negative equity or below the tighter BTL LTV lending policy will struggle and lead the market lower still.
GG
Except that the unrestrained lending couldn't go on forever.
The credit crunch itself was caused by a collapse in the US housing market - it was the result of the US housing crash and not the cause.
Therefore the notion that things could have gone on just fine in the UK if only x, y or z hadn't happened is a bit spurious. The housing bubble burst like all bubbles must eventually do. It wasn't 'brought down' by some completely random and unfortunate external factor - it destroyed itself through its very unsustainability.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
Gorgeous_George wrote: »The major reason is the credit crunch caused primarily by dodgy American mortgages.
GG
I would say it was primary caused by dodgy western mortgages. You can see the same practices in every developed country. However if I was to give the blame to one single person or action it would of been Alan Greenspan who's attempts to stave off previous US recessions by flooding the world with cheap credit to create a series of bubbles all around the world.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
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I would say it was primary caused by dodgy western mortgages. You can see the same practices in every developed country. However if I was to give the blame to one single person or action it would of been Alan Greenspan who's attempts to stave off previous US recessions by flooding the world with cheap credit to create a series of bubbles all around the world.
... and it's still happening. As long as the central banks keep giving out easy money we'll see it being ploughed into asset bubbles.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
mr.broderick wrote: »Relative to your income moomoo? No one has the right to be able to afford to buy a house you know...
why do you feel the need to personalise every point.
people in here discuss issues in general.
my own situation is very comfortable, my decisions not to buy a house to live in myself, are my own. I do actually own property, outright. More than one.It's a health benefit ...0 -
In America, a distressed borrower can hand the keys in and the debt is wiped - or rather the burden falls back to the bank (or whoever has bought that particular mortgage). If these loans were still on their right side of the banks' balance sheets, the banks would be in a far better position.
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
Gorgeous_George wrote: »In America, a distressed borrower can hand the keys in and the debt is wiped - or rather the burden falls back to the bank
Its going to happen here too, remember the US market is 12-18 months ahead of us. This is why Bradford & Bingley together with Halifax are extremely vulnerable.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
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Gorgeous_George wrote: »In America, a distressed borrower can hand the keys in and the debt is wiped - or rather the burden falls back to the bank (or whoever has bought that particular mortgage). If these loans were still on their right side of the banks' balance sheets, the banks would be in a far better position.
GG
Firstly - only 'non-recourse' states in the US allow the homeowner to hand back the keys and cancel the mortgage debt.
Secondly - much the same effect can be achieved in the UK (or most places) by the debtor successfully petitioning for bankruptcy. Which I suspect will happen very frequently once the repossessed wind up being chased for the thousands, maybe tens of thousands, of negative equity still owed. It will be doubly tempting as they can clear all their CC/ loan/ overdraft debt in the process.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
why do you feel the need to personalise every point.
people in here discuss issues in general.
my own situation is very comfortable, my decisions not to buy a house to live in myself, are my own. I do actually own property, outright. More than one.
I'll tell you why moomoo because most of the punters on here have made it personal, they follow whichever belief suits them. I wasn't actually getting personal, you said they were too high in respect to salaries, you can't just say that can you? Cause we are all on different salaries.0 -
mr.broderick wrote: »you said they were too high in respect to salaries, you can't just say that can you? Cause we are all on different salaries.
Seems ok to me.
:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
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