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Debate House Prices


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

1234689

Comments

  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    ad9898 wrote: »
    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

    things aren't as bad for some people.

    unemployment may hit 3 million. that's a 90% employment rate - not good, but will not be the worst situation compared to other European countries.

    rates are historically low so debts will be able to serviced much cheaper. also, there's the 6 month no reposession rule and also the 2-year deferred interest option

    inflation also coming down rapidly.

    the above will help people that lose their jobs. it's not a solution by any means but it will help their situation. the above may change but it's better than having higher inflation and high rates.

    if it means anything i think you're quite a balanced poster :)
  • http://www.allagents.co.uk/house-prices-from-1952/

    as per graph in the link, the last crash in 1989 took until after 1997 to reach peak again.

    ...and that was without a Financial crisis.

    This is the UK average.
    If you look at specific areas, many were not affected the same
    Take a look at this link showing the last 20 years
    http://www.hbosplc.com/economy/includes/19_01_08PostTownsData3.xls
    If you look at Edinburgh for example, they had drops, but each year after recovered, so not trending as per the UK 8 years you describe above. It was only 1 year.

    I'm sure the same will happen this year and that some areas will be hardly affected and others will be more affected than the UK average house price
    Barclays admit that it will be another year or two for lending to be resumed, by which time, what sort of drops will have occured? Taking it that much longer to get back up to peak...

    HBOS are lending double what they did in 2007
    NatWest have re-started 100% mortgages to existing customers
    Lending is already available
    "the old banks dont have any money argument"

    But the point is, that it is NOT an "old" argument. It is a very new argument, in the scale of economic activity. Wishing it away, will not work.

    See the point above
    :wall:
    What we've got here is....... failure to communicate.
    Some men you just can't reach.
    :wall:
  • I have read this from start to finish, and it is amazing how I am no further forward, however, I would say that the property market where I am has been busier in December than any month since August, the buyers seem to cash buyers, what we aren't seeing is long chains of house sales, the cash buyers are saying that over a ten year period their money is better in bricks and mortar than in stocks and shares or savings accounts...there are also schemes to help people buy their first homes which means the bottom end has movement still.
    I have no opinion one way or the other, my livelyhood relies on selling property, and some people are buying/selling ahead of the market, and even today we have had two people after the same property that has been on for over six months...I cannot call it from one day to the next.
    You can't rely on a lottery win to pay off your debts....or a long lost aunt come to that;)
  • One bunch of people that won't be returning to the market in any hurry are the sort of quick relationship house flippers. Meet him on the Monday, 3rd date is out looking for a house to buy before prices go up. Until now when they've split up less than 18 months later they could sell at a profit. That won't be happening.

    I think a lot of FTBs in the last 8 years or so have been people newly met rushing into buying a house before prices go up.

    You could see more flippers, especially if the believe that they can buy at the bottom and know prices are increasing again
    :wall:
    What we've got here is....... failure to communicate.
    Some men you just can't reach.
    :wall:
  • ad9898_3
    ad9898_3 Posts: 3,858 Forumite
    You could see more flippers, especially if the believe that they can buy at the bottom and know prices are increasing again

    I think that's a big risk, they will have to guess, as the bottom will only be seen in the rear view mirror, big balls would be required to go down this road in the current financial climate.
  • Numenor
    Numenor Posts: 104 Forumite
    Part of the Furniture Combo Breaker
    Capping on multiples is going to mean we're stuck on the SVR when our fixed rate expires in two years. There isn't enough of a 'human factor' in mortgage approvals imo.

    3 years ago we were offered up to about £145,000 (4x our salaries) on an LTV of 95%. Instead we borrowed £87,000 on 89% LTV. Since then our combined salaries have increased by 25% so presumably the amount we'd be offered on another property would in theory be up to about £181,000 - but if prices continue to drop at this rate our property will have lost its equity and nobody will give us a remortgage deal when the remaining £72,000 balance is 100% or more LTV on our current house.

    I realise that LTV capping is there to mitigate the financial risk of the debtor not being able to pay... but there's a much lower chance of the debtor not being able to pay - even if they lose one of their jobs - when the debt is less than 2x their combined salary. If they lose both their jobs... well, there's still a much lower risk of that happening than just one of them. There should be some flexibility in the form of a human being making an informed decision, rather than 'computer says no'.

    For now, all I can do is continue my overpayments (currently £200/month) and watch and wait.
  • Numenor wrote: »
    For now, all I can do is continue my overpayments (currently £200/month) and watch and wait.

    Mortgage overpayments is when I truly saw the light.

    Fortunately, I'm in the position to be paying in £1,610 in overpayments each month.
    I've also just topped up an end of year overpayment of just over £6k.

    I've set up graphs for my BTL's and its facinating how overpayments can vastly accelerate the payment completion date.
    :wall:
    What we've got here is....... failure to communicate.
    Some men you just can't reach.
    :wall:
  • Yep its a compound effect because you stop the interest on interest 25 years into the future, the oppisite is paying interest only of course

    Some argue rates are low so the money could be invested elsewhere but personally I'd always say less debt is always the best investment especially if they are going to restrict deals by equity
  • Yep its a compound effect because you stop the interest on interest 25 years into the future, the oppisite is paying interest only of course

    Some argue rates are low so the money could be invested elsewhere but personally I'd always say less debt is always the best investment especially if they are going to restrict deals by equity

    Fully agree here. The drop in interest rates in the last few months has enabled me to overpay by hundred of pounds extra, shortly to be thousands of pounds extra
    :wall:
    What we've got here is....... failure to communicate.
    Some men you just can't reach.
    :wall:
  • geoffky
    geoffky Posts: 6,835 Forumite
    MOST people buying now will regret the decision..whether it be seeing they could of paid 10s of thousands of pounds less or their ltv when remortgaging....green shoots of recovery will be wiped out by the icy frost coming...this market is going nowhere but down for a long time..only people who need to earn money from property will tell you different..
    It is nice to see the value of your house going up'' Why ?
    Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
    If you are planning to upsize the new house will cost more.
    If you are planning to downsize your new house will cost more than it should
    If you are trying to buy your first house its almost impossible.
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