House Price Revison (2003) - This is why we are going to have a 50%+ Crash

brit1234

Back in 2003 the BBCs Money Program did a investigation why house prices went mad. I won't say anymore at this point but if you have a spare 30 minutes this program will enlightern you why property prices will crash 50% or more (excluding buy to let), enjoy.:eek:

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

stevetodd

brit1234 wrote: »

Back in 2003 the BBCs Money Program did a investigation why house prices went mad. I won't say anymore at this point but if you have a spare 30 minutes this program will enlightern you why property prices will crash 50% or more (excluding buy to let), enjoy.:eek:

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

Where can I back those odds for house price falls that you are quoting? and from what benchmark are they being measured?

House Price Crash Betting Agency Odds
Increase in prices =:rotfl:....0-30% falls = 10-1
30-40% falls - 7-1 ........40-50% falls = 4-1:think:
50-55% fall = 2-1:j .......55%+ = 3-1:santa2:

Although I have to say that I would be worried about being paid out as there are many serious errors in the pricing which raises extreme doubt on the competence of the odds compiler. The possibility of that company to still be trading at payout time I think would be a serious risk.

wolfman

That was an interesting watch. Blast from the past, and amazing how it tried to make people aware, but still the property market pushed on.

It does make me angry, especially as the fraud is being covered by my taxes now. I'm glad the market is dropping, maybe one day I'll be able to afford a place legally.

adr0ck

hethmar wrote: »

I have to admit this happened to my son in 2003. He went to a broker for a mortgage re his first little flat. They told him how much he needed to earn to get a 90% mortgage and just left him in the office. When the broker came back son said he couldnt complete the form as he didnt earn that much and the broker sighed and pointed at the form where he needed to enter the amount needed to get the mortgage and son did it. 2 years later he dumped that mortgage and got a "genuine" repayment one. But it does show you how rife it was at that time.

so your son committed fraud?

adr0ck

hethmar wrote: »

Yes he did obviously - as a 20 year old he took a mature brokers advice.That was my point. Your point is?

so the broker committed fraud

and so did your son

it was only a question

adr0ck

hethmar wrote: »

I think you knew the answer before you asked, so pointless really then. Broker told him as a graduate in a profession that would be a high income in a few years he was safe in assuming an increase in pay. (His pay has grown 500% since that time) I was honestly stating how the situation was at that time. As the film states, 1 in 3 mortgages at the broker they went to was a self cert.

not really.......it was only a question

i wasn't paying that much attention

mizzbiz

Can anyone explain what's in the programme?

I have mobile broadband so if I watch it it will kill my limit :-)

Interesting that you mention it was five years ago now....

hethmar

Perhaps more attention before you comment next time then ad .

mizz bizz - Its a documentary concerning brokers offering self certification mortgages. The program is based on a teacher in Ealing who earns £30k a year and has a £36k deposit but is unable to buy his own flat due to the high prices in the area. An undercover team go to 10 brokers/estate agents in the area and 9 of the those advise the applicant to lie that his income is about £54k a year so that he can get the mortgage for the flat he wants. It goes on to state that 1 in 3 of applications from some brokers are self certification mortgages and that no checks are made on them at all re income of the applicant. Point being that it was fuelling the price of houses.

moanymoany

He was wrong when he said he thought it would now stop! The lenders would not allow such a lucrative product to disappear!

It does give a nice clear picture of why house prices kept going up. It is logical that the average house price should match the average wage - given the correct multiples.

The market must fall to this - if not - and lending is restricted to correct multiples of proven income - there will be no buyers at the lower levels of the market.

adr0ck

hethmar wrote: »

Perhaps may more attention before you comment next time then.

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

i won't mention your son paying more attention next time

hethmar

moany, are those types of mortgages still available then?