Mortgages scarcer than ever

WTF?_2

Realy wrote: »

Sorry must have missed the bit where I said there will be no forced sellers.:rolleyes:
In this market people will not sell if they don't need too.

Assuming they have equity in their house, why wouldn't they sell assuming they have a typical reason for selling up?

D'you think that because they could have got 'x' amount in Summer 2007 they are just going to stay put for maybe a decade until market prices recover to at least that level? That's nuts.


It's the people in neg equity that won't sell - because they can't. Instead, they'll be trying everything to keep the payments up. Should they be unable to do so however, repossession and bankruptcy beckon.

There are unprecedented levels of personal debt being held by the population. I don't think we've ever seen anything like this going into a recession before (normally, people are skint by the end of it not before. Ditto bank problems). This is going to be especially nasty and no mistake.

dopester

!!!!!!? wrote: »

It's the people in neg equity that won't sell - because they can't. Instead, they'll be trying everything to keep the payments up. Should they be unable to do so however, repossession and bankruptcy beckon.

There are unprecedented levels of personal debt being held by the population. I don't think we've ever seen anything like this going into a recession before (normally, people are skint by the end of it not before. Ditto bank problems). This is going to be especially nasty and no mistake.

Agreed. It seems that bleak to me. Where some people look at property prices and see value... it is still like some trippy alternate reality to me.

And there are people still taking about recovery.. in 2009-11 from these stupid levels.. when we don't even know whether the Lloyds-HBOS deal will go through, and drastic part nationalisation of the banking system to coming in, as well as many other nasty variables as everything unfolds.

Repossessions are set to rocket: more than 300,000 UK households are now over three months in arrears and Shelter reports a 160 per cent increase in enquiries over court action.

http://www.independent.co.uk/news/business/analysis-and-features/if-we-dont-get-our-house-in-order-the-bailout-will-backfire-958347.html

Realy

!!!!!!? wrote: »

Assuming they have equity in their house, why wouldn't they sell assuming they have a typical reason for selling up?

D'you think that because they could have got 'x' amount in Summer 2007 they are just going to stay put for maybe a decade until market prices recover to at least that level? That's nuts.


It's the people in neg equity that won't sell - because they can't. Instead, they'll be trying everything to keep the payments up. Should they be unable to do so however, repossession and bankruptcy beckon.

.

Well because with the lack of credit and FTB's it could be a fruitless task of chasing the market down.
I sold earlier this year and I nearly pulled the house of the market the day we had the offer as it is disruptive getting the house ready for viewings etc.
Also if people do not think they are going to get what they value their property at why sell.
I am not saying the mentality is correct financially but if they have a perceived value and will not sell for less, why would they sell for less?
I think that is why you se houses for dale at 07 prices as they would like to get top whack for it but don’t need to sell.

Personally coming from a home owner and recent seller the only people at the moment prepared to drop are forced sellers, people who need to move for work reasons and some STR's.
Personally I think it is too late to STR, and the market is not their to sell for any other reason than the above, people have realised that and are now looking to upsize etc when transaction levels go up.

The reason why people see a value in a property is also the amount of work they have done and will need to do on a new house. If they would like to sell but are not realy bothered if it does not reach a price they think the house is worth why sell? (not saying the house is worth more but if they are happy not to sell why should they_

chucky

dopester wrote: »

Realy... I'm not sure if anyone has already explained this, but the sellers, motivated or forced, go on to set the values of similar houses in the road / street / village / area.

People can sit it out if they can or want to, but that won't stop their property crashing in price.

so as not to generalise and to be a bit more accurate.

a price on a property doesn't matter if it is crashing, just as when houses prices were rising. as we all know property prices are only important when you sell.

not everyone has to sell, so prices are not crashing for these people.

it is only crashing for a motivated seller.

neverdespairgirl

chucky wrote: »

a price on a property doesn't matter if it is crashing, just as when houses prices were rising. as we all know property prices are only important when you sell.

It also matters if you are coming to the end of a fixed-rate deal and want to re-mortgage, though.

Realy

neverdespairgirl wrote: »

It also matters if you are coming to the end of a fixed-rate deal and want to re-mortgage, though.

Only if you do not have sufficient LTV to go to another lender or can not afford SVR.
But nearly all lenders will let you switch to another one of their products without a valuation.

neverdespairgirl

Have a look on the mortgage board ehre on MSE - it is mattering to a lot of people at the moment.

I'm no expert, but I understand that most bank do assess value when re-fixing, it's income they don't.

chucky

neverdespairgirl wrote: »

It also matters if you are coming to the end of a fixed-rate deal and want to re-mortgage, though.

good point - do you have numbers on how many people are on Fixed Rate Deals?

it would be interesting because they would probably be on deals that were at least 2 years, some probably 5 years long or even longer. in those 2 years there should be some equity in the property compared to todays 'prices' unless they have bought very badly.

HammersFan

neverdespairgirl wrote: »

It also matters if you are coming to the end of a fixed-rate deal and want to re-mortgage, though.

With the re-pricing of BoE-related variable rates (upwards) by many lenders last week (and the setting aside of inflation as a reason for holding rates), there seems to be strong evidence interest rates will be heading sharply south. IMO all this 'payment shock when re-mortgaging' stuff will be a dog that didnt bark. People that hang on until next year might be able to re-mortgage at around 5% even with a high LTV.

chucky

neverdespairgirl wrote: »

Have a look on the mortgage board ehre on MSE - it is mattering to a lot of people at the moment.

I'm no expert, but I understand that most bank do assess value when re-fixing, it's income they don't.

i've come to an end on various fixed rate mortage deals in the last 4 years and have re-mortgaged without proof of income and re-survery. i've done this with Mortgage Express and Abbey.

in July when I did this with C&G, I asked the question why they didn't and they said that they calculated the 'value' from the average HPI for each year to work out the LTV ratio they could lend.