The 70% club

IveSeenTheLight

skap7309 wrote: »

It goes on about how Japan struggled with a complete block on lending, low rates and previously rampant HPI. BTW house prices dropped 90%. Now....where have those ingredients been mirrored?

I read somewhere it was only Tokyo.

IveSeenTheLight

skap7309 wrote: »

Why thankyou sir lol.

No. £33,000 saved so far. Not bad for a 26 year old IMHO.

£33,000 saved and yet property is unnaffordale
:rotfl: :rotfl: :rotfl: :rotfl:

IveSeenTheLight

Ewarwoowar2 wrote: »

It shows that property prices only started falling (i.e. the YOY went negative) about 6 and a half moths ago. In that short period of time, prices have fallen 14 - 15%. In this period redundancies had only just begun. It's going to get worse over the next 12 months.

If prices continue to fall at the same rate, by the end of 2009 prices will have fallen by 45%. If HPC accelerates due to recession/unemployment the figure will be higher.

No.
UK average price has fallen accoring to Nationwide by 14.6%.
That's over 12 months.

the graph you refer to is YoY drops and you will see in the coming months it settles around 15%, maybe peking to 18% due to low initial drops and then back to 15%.
this is calculated on 1.5% monthly drops

dopester

IveSeenTheLight wrote: »

Dopester,
Do I correctly recall that you almost bought in Aug 2007?

Are you out of your mind?

No. You are definitely confusing me with someone - although I see what you are trying to do. Nice try.

dopester

...but perhaps more realistic than some of the optimistic "15% crash maximum*", or "gentle slowdown", or "green-shoots - recovery coming" posts of others.

*As was ISTL's forecast back at the start of May.

IveSeenTheLight wrote: »

remember to post a link when you quote me.
I'll be happy to respond and show other links

Sorry. I forgot, and didn't mean to bring about conflict.

Here you go:

6th May 2008

IveSeenTheLight wrote: »

I'm wondering looking at the average actual house prices and their drops durin gthe last crash if there will only be a nominal small drops around a lot of the country (say 10 - 15%) with London experiencing slightly higher and more prolonged drops (as shown during the last crash) thus skewing the UK average by an even higher percentage

dopester

Reading the quote over again closely, I think you are wrong about nominal drops of 10%-15% around a lot of the country, in that it will be much worse than that, but yes, London might even hit and skew averages harder.

Cannon_Fodder

IveSeenTheLight wrote: »

I read somewhere it was only Tokyo.

So, if its "only" London that suffers -70% (or -90%) drops, that will be ok for the UK, then??

beer_tins

Don't venture onto here much. I've got to say that average prices of £103,000 (as was alluded to in an earlier post) are highly unlikely. Why?

The average rent is around £1000 a month

A FTB can get a 90%LTV mortgage at 6.5%. So on a repayments mortgage would be paying roughly £620 a month.

Do you not think FTBs would say, why do I not save myself £400 a month and get to own my own home? At least be free to do what they want and own it outright after 25 years.

Even if the mortgage rates shoot up, they have some way to go before they are paying as much for their mortgage as they were to rent. Frankly, I think a lot of buyers would pile in a lot sooner than that. Even at an average price of £160,000 FTBs would be paying the same on a 90% repayment mortgage as they were in rent. A very tempting level indeed to jump in, I'd say.

We all know prices are falling, but let's keep it realistic!

dopester

beinerts wrote: »

Don't venture onto here much. I've got to say that average prices of £103,000 (as was alluded to in an earlier post) are highly unlikely. Why?

The average rent is around £1000 a month

You are making the assumption that rents can't fall to match prevailing economic conditions.

Try unemployment, pay-cuts, and deflation on for size. Go back in history and see how previous credit-crunches have played out. People can't pay £1000 rents if they aren't now getting that in income. Polish workers leaving the country. Many reasons. And competition for tenants will drive down rents.

beer_tins

dopester wrote: »

You are making the assumption that rents can't fall to match prevailing economic conditions.

Try unemployment, pay-cuts, and deflation on for size. Go back in history and see how previous credit-crunches have played out. People can't pay £1000 rents if they aren't now getting that in income. Polish workers leaving the country. Many reasons. And competition for tenants will drive down rents.

OK, we don't know what rents will be like in future. I'm just saying that at £600 a month repayment mortgages, a lot of people will be going for a piece of the action. Even before they hit that level. Also, we aren't experiencing deflation and it's certainly not guaranteed that we will.