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Why we are going to have massive falls, far bigger than I thought

edited 30 November -1 at 1:00AM in Debate House Prices & the Economy
54 replies 3.6K views
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  • phil_b_2phil_b_2 Forumite
    995 posts
    Isn't "grand 3-bed semi" an oxymoron?

    PS, 50% fall followed by 50% rise = property still 25% cheaper than today.

    depends on the semi in question and your definition of grand.
  • brit1234 wrote: »
    Hi, today I am very shocked, it appears I may have drastically under estimated the scale of house price falls. I have some degree of expertise in risk management due to my degree and employment. Using this and studying economics over the last 5 years


    The Panorama program below show how a few years ago how the only way to get mortgages was to lie on self cert mortgages through mortgage brokers. The vast majority of the Brokers in Ealing London advised people with £30K salaries to inflate the figures to £52-56K to get a basic flat in the area (2003).


    Watch this program and you will be shocked and understand how this housing bubble got so big. It is a really good and extremely enlightening program showing how bad mortgage fraud is.

    http://video.google.co.uk/videoplay?docid=-8482518243122067675&hl=en-GB





    Also below is the link to Commodity Watch where 5 experts from Estate Agents to investors highlight how badly the market will fall. My 50% fall looks very conservative after listening and watching these programs. What is increasingly likely now to happen is 60-70% falls. This is based on now 3 times salary combined with raising a large deposit. The reason properties will fall beyond the 50% is due to the lower lending rate and the delay lag it will take the majority of people to raise the deposit especially due to the economic conditions ie rapid inflation. Hence we are going to have a housing price crash over fall due to lack of buyers due to the time to save the deposit.:exclamati


    Commodity Watch program
    http://www.minesite.com/webcasts/commodity_watch_radio.html





    What we know at this point:
    1. Properties have been sold for as much as 50% of their purchase value.
    2. Mortgage brokers are being squeezed out by lenders and self cert mortgages have almost disappeared.
    3. 100% mortgages have gone with 90-95% mortgages disappearing fast.
    4. 25% deposits are increasingly being requested.
    5. Mortgage interest rates are far higher than base rates and likely to increase further.
    6. Newbuilds are becoming very difficult to get mortgages for and often found to be overvalued by lenders surveyors
    7. Property prices are falling at their fastest levels every.
    8. Mortgage approvals are at the lowest ever and still falling.
    9. Building developers share values have plummeted and they are making 25-40% of their staff redundant.
    10. Northern Rock collapsed and had the first run on a British bank in 100 years.
    11. All bank shares have plummeted especially the most risky lenders which are issuing rights issues and are in danger of going under especially Bradford and Bingley

    Here is some good links to see the massive property price falls.

    1, Property Snake
    http://www.propertysnake.co.uk/


    2, The excellent Property Bee program which is showing huge falls in the area.

    Installation Video
    http://www.property-bee.com/toolbar/download/movie.html

    Program download
    http://www.property-bee.com/toolbar/download/




    Any one want to comment on their thoughts?:question:

    Heavens if they are going to fall further than what you have guessed we're bu.ggered.
  • Don't forget that a lot of potential FTB's are saddled with huge debts from University. Another chicken coming home to roost?
  • phil_b_2phil_b_2 Forumite
    995 posts
    Student debt repayments are b'ollock all though. A minor consideration.
  • SapphireSapphire Forumite
    4.3K posts
    Part of the Furniture 1,000 Posts Name Dropper Debt-free and Proud!
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    and it would be good to see a day of reckoning, when the senior perpetrators (and not just a few lowly advisors) are handed down exemplary jail sentences.

    That would include members of this 'government', who knew full well what was going on, yet allowed it to do so for their own gratification (short-term popularity and increasing their own personal wealth, e.g. Blair).

    This must be the worst government this country has had – and not just because of its support of the giant property scam. It's what they've done with the education system; enforcing political correctness at the expense of our cities; allowing so much of the indigenous culture to be lost, (including architecture, with sturdy old buildings that could have been made use of being replaced with flimsy and vile-looking newbuilds – the sink estates of tomorrow); allowing manufacturing and small businesses, and the skills linked to them, to die out; wasting taxpayers' hard-earned money on 'reports' costing millions, on unwanted schemes such as the Olympic Games building work, on their own private wealth, etc; taxing the poorer members of society to the hilt while allowing the wealthy to get away with paying very little tax; lying and cheating their way out of every scam.

    All they seem to be doing is defending themselves against attack – there are no policies for the betterment of society and for improving the situation they have got this country into.

    Never has there been such an immoral, incompetent and sleazy bunch of people 'running' this country. They make me so sick I can't even bear to look at any of them on TV. :mad:
  • VFR-RiderVFR-Rider Forumite
    119 posts
    phil_b wrote: »
    Student debt repayments are b'ollock all though. A minor consideration.

    I disagree.Personally mine are >£400 per month, this is more than some people pay in rent.

    (note: this is just what the SLC remove from my PAYE, I do not have any credit cards/ overdraft that I am including in that.)
    saving, saving, saving!
  • kingkanokingkano Forumite
    2K posts
    VFR-Rider wrote: »
    I disagree.Personally mine are >£400 per month, this is more than some people pay in rent.

    (note: this is just what the SLC remove from my PAYE, I do not have any credit cards/ overdraft that I am including in that.)

    Since student loan repayments are calculated at 9% of your salary over £1250 a month, I calculate you must earn around £6000-£7000 per month? As correctly stated, £400 is a minor consideration. Albeit yours are probably exceptional circumstances I'd have thought and your debt won't take long to clear at that rate?
  • PennywisePennywise Forumite
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    exactly how long has this type of (criminal) activity been going on?

    how many self-cert appl's (as a %age of total appl's) have been submitted?

    how many were approved? how many transactions completed? what money figure involved?

    In my experience as an accountant, the number of self-cert mortgages is truly huge. Upto 2/3 years ago, we regularly produced confirmation of earnings certificates for clients, both employed and self employed. In the last 2/3 years, I've done none at all - all the banks/b'soc's ask for is confirmation that we are the applicant's accountant and how long we have acted for them - absolutely no request for financial information at all. I've been worrying about this for a long time as it was clear that the lenders weren't being vigilant about ability to repay anymore. Obviously I don't know how many of my clients have lied about their earnings, but I suspect it is most of them as otherwise they'd have applied for cheaper status mortgages - why pay a premium for a self-cert if you don't need to?
  • VFR-RiderVFR-Rider Forumite
    119 posts
    kingkano wrote: »
    Since student loan repayments are calculated at 9% of your salary over £1250 a month, I calculate you must earn around £6000-£7000 per month? As correctly stated, £400 is a minor consideration. Albeit yours are probably exceptional circumstances I'd have thought and your debt won't take long to clear at that rate?

    I don't take home anywhere near £6-7k a month! I'd love that! However I don't have many compulsory commitments, that 400 could easily go into investments,

    My point was simply that you do not decide how much they take as it is directly out of PAYE, irrespective of any other commitments you may have...
    saving, saving, saving!
  • phil_b_2phil_b_2 Forumite
    995 posts
    To be paying £400 a month you would indeed need to be earning about 6k a month.

    I take it back, it isnt a non-consideration, but for most not a burden they notice I dont think.
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