At least a decade for prices to return to 2007 levels.

mitchaa

Max_Headroom wrote: »

I don't know if you noticed, but when banks were lending amounts that funded 2007 house prices, many of them actually collapsed!!

It will be a long long time before they're able to lend at those levels again, and wages are able to support them (rather than the fresh air of more borrowing and the hope that prices only ever go up).

It's interesting that you quote 95% mortgages being back as reason to suggest this will fund 2007 levels. The percentage is irrelevent if they're only prepared to lend (say) half as much.

Or to put it in numbers, they might have been prepared to lend me £190K to buy a £200K house last year. But if this year they're only prepared to lend me £95K to buy a £100K house, then they're still offering me a 95% mortgage, but my spending power has halved.

Ahh you are suggesting banks have finally seen sense and capped their lending multiples;)

How much truth is there in this??

I agree the sub prime lenders have certainly had their fingers burnt and are not offering 7-8x anymore but the main lenders are still offering the same lending multiples if not more compared to this time last year.

Just looking at the C&G site and it is showing you can borrow 4.85x Joint salary. I am pretty sure when i set mine up last year it was at 4.4x Joint max lend.

You can still easily get 4x+ joint with most lenders, so nothing has been restricted as such.

Only deposits have been tightened and this appears to have 'slackened' already with re-introduction of 95%.

Try it yourself...

http://mortgagetools.lloydstsb.com/borrowing_calc.asp

Lloyds TSB but C+G funded.

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It will be interesting to see 10 years hence, my belief is that we will be in the midst of peak oil, with all the associated problems that go with it. I don't see anyone re-inventing the wheel at the moment so we are running out of time to replace the staple ingredient that is the very foundation of our modern lives. An example, ever thought within 50 years of petroleum discovery in 1846 we had the basis of the lives we have today, yet we have been around for over 1 million years (unless you're Sarah Palin:D) and achieved relatively little ? Food for thought.

After the banking crisis that no one saw coming, this will be the next problem on the horizon, it could possibly make the banking crisis look like a storm in a tea cup.

And on that cheery note, Merry Christmas :xmastree::D

handful

I get the feeling there are a lot of potential FTBs busy saving their deposits and waiting for the 'bottom' of the market. When this moment perceptually arrives and the rush to catch the moment gathers momentum, HPI up to close to double digit growth is far from unlikely imo.

The media is very good at persuading us to do the right thing financially and the current 'doom and gloom' on every news bulletin is taking us further down than we need to go. The further we go the greater the rebound will be and I fear inflation may be closer than we all believe possible.

tomstickland

mitchaa wrote: »

The old banks dont have any money argument

95% mortgages are already back, quite a few of them aswell. People have been saving good size deposits the last 12-18mths or so and are just looking for the bottom of all of this in order to buy.

As soon as that happens, great influx of buyers, houses start to rise again. Times have moved on from the last crash that many refer too, we are a lot more greedy now and our attitudes to housing over the last 10yrs or so have changed 10 fold.

Ah, the old "things are different this time" argument.

michaels

mitchaa wrote: »

Try it yourself...

http://mortgagetools.lloydstsb.com/borrowing_calc.asp

Lloyds TSB but C+G funded.

Wow - just offered me 5.2x salary at 60% LTV :eek:

So that means I could 'afford' to spend 200k more on a house than I think prudent...

chucky

michaels wrote: »

Wow - just offered me 5.2x salary at 60% LTV :eek:

just gave me 5.25% with 85% LTV - are things really that bad??

mitchaa - in future can you post links that tell us about 70% price drops instead please. there much more appreciated.

Spendless

I bought a MTH in Dec 94 for £25k, within a year I was in negative equity. At it's worst I'd say I would have got between £12-£14k for it (late 90's). When I had it valued mid 2001 as I now had a husband and child and the house was to small,it was worth £19,500. The EA did say to me at the time that a 10 year cycle would fetch me out of the negative equity. We moved to a bigger place and rented my place out. House prices started soaring here summer 2002. After a couple of years my tenants left and I sold March 2004 at £41K. That was a cheap price at the time as the hosue by now wanted quite a bit of work doing on it. The people who bought my place did do the work on it and sold it for £64K exactly a year later. Obviously I don't know how much they spent doing the house up but I do know it included having a new bathroom suite and double glazing 3 windows (rest were already done).

So from that info, if history repeats itself, I can believe a 10 year cycle is correct.

IveSeenTheLight

skap7309 wrote: »

I have said this many times before. If everyone is waiting for the bottom when does it occur? Prices will stabilize/rise when buyers return. I will not be buying yet, the next person will not be buying yet (continue down the line...)

Although the figures are still low compared to 2007, buyers have increasingly started to return to the market.

I understand the last few months figures were 32,000, 33,000, 39,000 and reports that December is to be higher still

You might not buy and so may the next, but many others are starting not to wait. I've seen many posts saying I have recently bought

chucky

a 10 year cycle is possible if you get too hooked on the Halifax or Nationwide indicies, i think that it will be less though.

there will be some desirable areas that will have recovered much before then maybe two or three years time. HPI will be very regional and maybe more localised as buyers will be in a position to make their purchase more selective if their timing is right.

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chucky wrote: »

just gave me 5.25% with 85% LTV - are things really that bad??

To be honest chucky, things aren't that bad as long as you have a secure job, have very little unsecured debt, aren't going through a split/divorce/death situation, having bought a house with little or no deposit in the last 2-3 years.

Seriously, I'm not being patronising at all, if you don't tick any of those boxes above, things are pretty good, lots of bargains to be had out there for sure.

Anyway, enough of that otherwise I will lose my membership of the 'doom monger club':D