House prices to fall by 40% from peak, 3-4 million in neg. equity

luvpump

StevieJ wrote: »

So economists are suddenly the oracle of Delphi, I thought they knew FA according to you lot.

Stevie bro... We feel your pain dude !!.. We feel your pain

StevieJ

luvpump wrote: »

Stevie bro... We feel your pain dude !!.. We feel your pain

Remind me, what pain?

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Cannon_Fodder wrote: »

Got me wondering about the scale of the problem...

http://www.fsa.gov.uk/pubs/consumer-research/crpr56.pdf

"Product sales data shows that around 19% of all new mortgages are written on an interest-only basis with no record of a repayment vehicle in place."

Those with "3. A Rough" or "4. No Idea" how they would repay their mortgage "would equate to around 58,000 borrowers in the year."

Every year...

Yep, another balls-up by the banking industry, interest only mortgages should never allowed to be taken out without prrof of a repayment vehicle, this is how it used to be.

I'm pretty sure this policy has added to HPI, due to the number of BTL'rs increasing 35 fold since '96. All this could have been stopped and things would have been so much different.

Pobby

Well I do hate to be so boring but I also listened to the same program. When even your wife agrees with you that house prices could drop as much as 50% it still has a rather strange feel to it and still seems impossible. When I heard these guys saying the same, well it certainly makes you think.

To see this week that in auction some stuff is not reaching 50% of what it was originally sold for is certainly of concern to many.

Pobby

StevieJ wrote: »

Remind me, what pain?

Dunno, but saw you taking a pop at Carolt on another thread,

http://forums.moneysavingexpert.com/showthread.html?t=1257191

Thee last thing I think is that Carol, being a housing bear, is dreaming. A housing bear with his own place without a mortgage???? Why, I should be talking the housing market up. It`s different this time.

StevieJ

Pobby wrote: »

Well I do hate to be so boring but I also listened to the same program. When even your wife agrees with you that house prices could drop as much as 50% it still has a rather strange feel to it and still seems impossible. When I heard these guys saying the same, well it certainly makes you think.

To see this week that in auction some stuff is not reaching 50% of what it was originally sold for is certainly of concern to many.

You know what they say, when everyone agrees about something - They are almost certainly wrong , or is it when the taxi driver (or is that shoeshine boy) is advising you to sell your house.

StevieJ

Pobby wrote: »

Dunno, but saw you taking a pop at Carolt on another thread,

http://forums.moneysavingexpert.com/showthread.html?t=1257191

Thee last thing I think is that Carol, being a housing bear, is dreaming. A housing bear with his own place without a mortgage???? Why, I should be talking the housing market up. It`s different this time.

Could you please translate that into English?

Pobby

OK what i am saying is I have no vested interest as I own outright. Why would I want to see a 50% drop? It would be nice to see prices return to some sort of sensible level.

_bankrupted

I really think people are fooling themselves when they believe that in general house prices will fall 50%. Of course there will be properties in localised areas that will see this size of fall, but that will be for a very specific reason, specifc to the property.

If my house falls 50% it will put it at a price (adjusted for wage inflation) at the price I paid for it in 1993 right at the bottom of the last slump.

Then interest rates were 12%.

The difference today is that interest rates are 4.5% and predicted to fall to around 3%

There is greater demand today for housing due to population growth and more people living alone.

At the end of the day it's a complex issue but the price is in part driven by affordability and demand. Both of those favour house prices higher than the last slump.

besonders1

I never believed (being a non -home owner or FTB to be!) that houses would ever come down in value, I am really surprised they have got to 15% now. I thought that the days of working class FTB couples or single people getting on the property ladder were left behind in the late 1990s and renting is the only option.

After this housing crash I believe that anything is possible.