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

StevieJ

!!!!!!? wrote: »

Regarding inflation: Don't be fooled by the switch to CPI as an inflation measure.

We have had low CPI because of the China-effect but a more honest measure of inflation would have shown considerably different inflation figures over the last decade.

David Owen (see iPlayer link on other thread) made a great point on Hardtalk last night that since Tony Blair and New Labour took over, there has been a culture of the government interfering with the figures to make them look better for whatever daft policy it is that they want to pursue.


Ironically, just as more general inflation is set to drop in the near term, CPI will likely rise due to the crumbling pound. Still, not to worry as I'm sure the figures will be re-assessed to whatever measure suits the liars at number 10.

Behave, CPI is not going up in the near term.

Pobby

Whilst on the subject of buying abroad it would be very interesting to know how many mewed to do it. It was maybe 2004 when the frenzy was really at it`s peak. I was at Alicante airport talking to a young couple with a kiddy. They had done just that. Double whammy, property here coming down and Spanish property tanking. Guess it seemed like a good idea at the time.

We looked at it I have to say but buying for cash out there. Once again the very sensible Mrs. P put the mockers on it. Not a bad choice as it turns out.

ad9898_3

StevieJ wrote: »

Behave, CPI is not going up in the near term.

I disagree Steve, If the BoE are too aggressive with the rate cuts, the pound will indeed crumble. The Fed Reserve can pretty much do what they like with dollar, its the currency of last resort, we do not have that luxury.

If the pound does tank then the CPI is sure to go in the opposite direction, we import nearly everything, manufacture nearly nothing.

Lotus-eater

hethmar wrote: »

I just keep thanking god that we didnt give in and mew - the constant offers from BS and Banks were so tempting - 2 decades of house price increase - "why dont you buy a retirment place abroad" - "wouldnt you like a brand new car?" -

Agreed, we were the same, almost gave in when we only had a shell of a house to live in and I was being moaned at a bit because we didn't have a kitchen. A friend of mine at the same time was doing the same thing, He borrowed another £30k on his mortgage to get the kitchen he wanted, saying to me "its so cheap to borrow on your mortgage, its silly not to"
We waited until we had the money, then only paid what we could afford.
Thankgod.

baby_boomer

Now that

"75% is the new 90%" when it comes to mortgage Loan to house Value

there are going to be some shocked people trying to remortgage over the next year or two.

The Times estimates that 49% of those who bought since the start of 2007 borrowed more than 75% of the value of their home, and loads of these people are not going to be able to switch lender.

Just think. They'll have no choice but to fulfil the original contract which they never intended to keep. How terrible!

This is a difference to the 1990s, I think. Plenty of people will be hit who don't even come close to Negative Equity.

hethmar

The one light being that I believe the neighbour from hell mewed on one house to buy the house next door to us which he then spent nearly 3 years renovating. Hopefully he may feel he has to sell up and move on. Always a silver lining.

baby_boomer

MEWing + lousy endowment / interest only mortgage + HPC = big issue at the end of 25 years.

StevieJ

ad9898 wrote: »

I disagree Steve, If the BoE are too aggressive with the rate cuts, the pound will indeed crumble. The Fed Reserve can pretty much do what they like with dollar, its the currency of last resort, we do not have that luxury.

If the pound does tank then the CPI is sure to go in the opposite direction, we import nearly everything, manufacture nearly nothing.

So the fact that commodity prices have tanked and wage inflation is zilch doesn't count?

WTF?_2

StevieJ wrote: »

Behave, CPI is not going up in the near term.

OK, 'remain stubbornly high' then.

And given the amount of careful massaging that CPI has received to minimise it, the fact that it's even around 5% is shocking.

(It's easy to forget that a steady inflation rate just means the rate of rise is steady, not that prices have stopped rising)

hethmar

Oh exactly Baby boomer - on top of all this we had an endowment "pay up your mortgage and youll have £40k+ to do what you want with in your retirement" - yes well, that went down the chute too didnt it.