The real question is why house prices aren't falling faster?

Dan:_4

pickledpink wrote: »

If the property fell to zilch (and the bank effectively owned it) it would be their loss too. I would offer them whatever I could afford to pay off the arrears. If I was penniless and could only afford,say, £2 a month they would have to accept that.

One learns a lot on this forum don't they?:D

Just declear yourself brunkrupt, your be discharged within a year, and can start afresh in 6.

neverdespairgirl

pickledpink wrote: »

Let me tell you - if I had a mortgage - and I found the repayments beyond my means, and owed thousands to the bank I would make damn sure my family bought it from me! For a tenner!

I think you are having trouble with the idea of a mortgage. It's secured on the house. So you can't sell it without paying the mortgage off, unless the bank agrees. Something tells me they are rather unlikely to agree to a sale for a tenner!

pickledpink

neverdespairgirl wrote: »

I think you are having trouble with the idea of a mortgage. It's secured on the house. So you can't sell it without paying the mortgage off, unless the bank agrees. Something tells me they are rather unlikely to agree to a sale for a tenner!

I know what a mortgage is - I had one once.:T

What I'm saying to you is if a person can't sell their house, and they can no longer pay their mortgage (you can't get blood from a stone, and all that...) the banks have no option but to accept whatever amount the mortgagee can afford. And if it's just £2 a month they will have to accept that - by law!

Of course, the house will be repossessed, but according to all you doom and gloomers properties are going to drop to such laughably low levels that it seems people will be able to pick up a prime mansion for a few hundred quid!!!:rotfl: In which case, it would be totally logical to send your son/daughter/sibling - whoever - to go and bid it bacvk for you at the auction. Who knows? They may start a Buy One Get One Free!:rotfl:

moggylover

dopester wrote: »

Market improves? And how do you expect that to happen?

Demand also requires the ability to pay.

And people thought that last time - the demand is already there - there are still people who want to move and buy - the financial situation will improve again - and whilst it might alter a little for the better - those hoping for a return (en masse) to 1960's prices across the Country will probably still be renting when they die:D .

For those of us old enough to remember clearly, and have been affected during the 1990's - the pessimists then were predicting far greater losses and far longer periods than were actually suffered - not sure if that was pessimism or optimism though:D

GDB2222

moggylover wrote: »

For those of us old enough to remember clearly, and have been affected during the 1990's - the pessimists then were predicting far greater losses and far longer periods than were actually suffered

Is that really true? I remember that period well. Also, my friends at Nationwide have provided some statistics to help me refresh my memory. http://www.nationwide.co.uk/hpi/historical.htm

According to the stats (as opposed to my hazy recollections) prices peaked in 1989 Q2/Q3 and then dropped by 20% over the 3.5 years to 1993 Q1. They then bumped along almost unchanged for 3 years to 1996 Q1, when prices started going up again.

Adjusting for inflation, house prices reduced continuously until 1996 Q1, with the reduction in price being 37%, allowing for inflation as measured by the RPI. Measured against wages, the drop was much greater.

Far from pessimists expecting the drop to continue for much longer, my recollection is of false dawns being sighted every spring from 1992 onwards, so there were lots of disappointed optimists.

Clearly, mortgage rates increased a lot in the early 1990's, but by Q1 1991 base rate was back to the level it had been in Q3 1989 (when prices peaked). In fact, the peak in base rates was only 2% more than at the time when prices were still rising and hit their peak. Even so, it took nearly a further 5 years for prices to start to recover, by which time base rate was less than half the level it had been when house prices peaked.

Of course, repossessions and redundancies played a major role then, but my view is that the real reason it lasted so long was 'market sentiment', ie prices had been much too high and people simply did not have the confidence to borrow heavily again to plough the money into houses.

David_beach

[quote=pickledpink;

Let me tell you - if I had a mortgage - and I found the repayments beyond my means, and owed thousands to the bank I would make damn sure my family bought it from me! For a tenner!:p

[/quote] Oh pickledegg don't stop now I have not laughed so much in ages.

David

mewbie_2

Dan: wrote: »

Just declear yourself brunkrupt, your be discharged within a year, and can start afresh in 6.

I think if you try declearign yourself brunkrupt you will actually be certified. Still, no housing worries when that happens.

Doom_and_Gloom

I do think that renting is dead money. My grandma and grandpa (when he was alive) rented a place for over 25 years :eek: always stating to my dad (their son) that they could not afford a mortgage. They paid the mortgage off for the person that owned the place they had been in all that time quite nicely though. They then decided to move due to various factors. Now thankfully my great aunt bought them a small bungalow (sp?) to live in after that. However what would have happened if she had not? They would not have been able to afford rents as they were when they moved (forget what they are as it stands) as they were used to a fixed rent for all that time (although it did change with the currency of shillings to pounds if you get what I mean). My grandparents would be between a rock and a hard place due to this as they were only on their pensions (my grandma still is). They really could have got a mortgage but did not realise that .

My parents have the house I'm i right now as a mortgage. They bought it in March 1994 near the end of the last crash. House prices were alot more realistic then. Just to show you the kind of unrealistic prices we have there is a house down this road that is 7 bedrooms with an asking price of around £750,000 :eek: . It's probably really worth half of that to be honest.

Now I'm saving for a house and have been since I was 18 (I'm 19 now). I'm not too bothered if I pay a little more than I think the place is worth when I do as it is a home that I'll be able to decorate as I wish, have however many pets I want to, can use the garden to it's full etc. That to me is worth alot. I've rented and it was a nightmare (I know this is my experiance and will not parallel everones). It made me more determind to own my own place. In a year or two I'll have enough money for a hefty deposit on a house and a decade or two (maybe a little more) down the line I will own it. Then I won't have to worry about a mortgage or rent as the place will be owened out right. Surely that is why buying is better than renting . A mortgage comes to an end. Renting never does.

carolt

Absolutely, Doom_and_Gloom, and hopefully, due to your age, you will be lucky to have just missed the peak of an enormous bubble (do bubbles have peaks? ) and will be in a great position to buy in a couple of years. I think you're kind of missing the point - (almost) no-one on here thinks renting is better than buying per se - just renting versus buying at stupidly high prices.

Best of luck!

carolt

pickledpink wrote: »

Property can only drop so far...............:money:

AND then they stabilise.

The properties that have dropped are mainly those which were overpriced or undesirable. Now they have fallen back to more or less the price they should have been - they can't fall any more. It wouldn't be economically possible.

Things will level out by next Spring and prices may stay static for a year or two - and then they will start to climb back up again. Just like they always have.

Even the doom & gloomers accept that; which is why they're waiting to pounce themselves!

Everyone knows property is the best investment long term. :money:

Oh thank you, thank you!

Please, please, please, can I quote this post back on a monthly basis every time the property stats come out? It would put a smile on so many people's faces!

In fact, this post is so great, I think it really deserves a sticky all of its own.

Which is why I've quoted it in full, just in case any mischievous person attempted to delete it....