Boom, Boom, Boom, Bust, Bust, Bust

Realy

Turnbull2000 wrote: »

1)Nope, you're still miles off. Average equity levels are above 50%, and the majority of poeple bought before prices trebled from 1997 onwards.




2)You're doing a great job of cornering yourself Realy. This last quote really does show you haven't got a clue.

1) Have you got a link. I have the average mortgage being £115k and the average house being what £166K? Given those figures are for all mortgages the majority must have around 17 years + to pay and be well over £115K.
(Ill give you a hand the average mortgage is thirty % less than average house price, that means the average house has 30% equity. You could also say that they are aproximatly 30% through their term, about 7.5 years. But given the figures are nearer the asset value most transactions must be nearer to the start of the mortgage than the end)

2) No a mortgage is not affected by inflation if you borrow £250K on IO you would still owe £250K in 25 year time, it does not go up with inflation!

So who does not have a clue. Oh it's you.:rolleyes:

Turnbull2000

Realy wrote: »

1) Have you got a link. I have the average mortgage being £115k and the average house being what £166K? Given those figures are for all mortgages the majority must have arround 17 years + to pay and be well over £115K.
(Ill give you a hand the average mortgage is thirty % less than average house price, that means the average house has 30% equity. You could also say that they are aproximatly 30% through their term, about 7.5 years)

Homemove.co.uk

A recent study by Scottish Widows has established that the average outstanding mortgage debt is £38,000

Your figure of 115K will be for new mortgages, not existing.

Realy wrote: »

2) No a mortgage is not affected by inflation if you borrow £250K on IO you would still owe £250K in 25 year time, it does not go up with inflation!

So who does not have a clue. Oh it's you.:rolleyes:

I call troll. But I'll answer anyway.

250K now, and 250K in 25 years time are not worth the same.

Realy

Turnbull2000 wrote: »

Homemove.co.uk


1) Your figure of 115K will be for new mortgages, not existing.



2) I call troll. But I'll answer anyway.

250K now, and 250K in 25 years time are not worth the same.

1):rotfl: average mortgage is £38K
If you divid £1.3trillion by the 11.8Million mortgage holders it is £110,169 per mortgage.

2) You are right if they pay £250K, in 25 years time it would be loads less than todays values.

PS Your link is based on retired home owners.:rotfl: . Read the title first.:D

Turnbull2000

Realy wrote: »

1):rotfl: average mortgage is £38K
If you divid £1.3trillion by the 11.8Million mortgage holders it is £110,169 per mortgage.

2) You are right if they pay £250K, in 25 years time it would be loads less than todays values.

PS Your link is based on retired home owners.:rotfl: . Read the title first.:D

Ah well, I'll accept if that figure is wrong. Not easy looking up numbers at work

http://www.telegraph.co.uk/finance/2811552/Interest-rate-rise-to-hit-mortgage-payments.html

Here's another one, this time quoting an average outstanding mortgage of £94,000. A 30% nominal crash, plus 20% RPI still leaves the majority above this figure, and that 50% real fall will not leave 25 years worth of mortgage holders in negative equity. There's also the millions who have no mortgage at all, reducing the numbers affected even further.

A high amount in negative equity. Yes. The majority? No.

And a 50% fall taking us back to 1993 prices? Average price 1983 - £30,000. Umm, ok.

Realy

Turnbull2000 wrote: »

Ah well, I'll accept if that figure is wrong. Not easy looking up numbers at work

http://www.telegraph.co.uk/finance/2811552/Interest-rate-rise-to-hit-mortgage-payments.html

Here's another one, this time quoting an average outstanding mortgage of £94,000. A 30% nominal crash, plus 20% RPI still leaves the majority above this figure, and that 50% real fall will not leave 25 years worth of mortgage holders in negative equity. There's also the millions who have no mortgage at all, reducing the numbers affected even further.

A high amount in negative equity. Yes. The majority? No.

Not realy, as that is a 30% crash, RPI only makes a difference when you are buying.
But not to the people who have already purchased.
Because any inflation is offset by the fact their loan is not increasing with inflation (the opposite in fact.)

So as a buyer if 30% nominal falls happend you could argue in real terms their as been a 50% saving to you. (but you have still got to get 20%RPI yet)

But for someone who purchased at the height it is only a 30% fall as their loan as not gone up with other inflation (wages etc)

it's a classic case of who is right. You are if you get 20% RPI and you buy you have saved 50% in therory.
But I am also right because inflation does not eat away at a loan (well it makes it cheaper over time not more)

Can we agree on that?

blisk

Can the European leaders hold their nerve & stay united.

Who will blink first ?

Annpan

blisk wrote: »

Can the European leaders hold their nerve & stay united.

Who will blink first ?

I liked that Dr. Who episode called "Don't Blink". Did you see that one?

blisk

Annpan wrote: »

I liked that Dr. Who episode called "Don't Blink". Did you see that one?

We need Dr Who & the Tardis to sort this mess out.

mircea

Turnbull2000 wrote: »

Then care to explain why 50% drops are not possible? The bears have put their (often valid) arguments forward numerous time. Why don't you try the same. It's not that hard. Or is it just "supply and demand innit"?? :rolleyes:

Prices cannot fall 50% because they only crashed 12% and look at the domino effect they started. I would imagine 50% would change the world as we know it.

lostinrates

mircea wrote: »

Prices cannot fall 50% because they only crashed 12% and look at the domino effect they started. I would imagine 50% would change the world as we know it.

I'm not foecasting anything, but that argument doesn't hold for me. Life changing from how we know it happens.

People have lived depite 'catasrophic' events such as abolision of slavery, women getting the vote..and wearing trousers, a black man-and a woman- running for president of the US of A, the fall of the Berlin wall, End of the Soviet Union................I could go on for some time......