1.5m homeowners face 'disaster' if house prices keep falling, MPs warned

Really2

housesitter wrote: »

So it's you that is responsible for all the teenage pregnancy?
Shame on you... :cool:

I dont' think my wife would be happy if she knew.:D

housesitter

b0rker wrote: »

I would not say that was so much poor judgement as poor education.

Here we go again:

I approached a mortgage advisor before I bought the house. He arranged it all for us. I put complete faith in the system and the MA and did not relaise the risk I was taking. I agree it was entirely stupid considering the circustances but with the information at hand I would still not consider it as poor judgement.

In future.
When taking advise from people that take comission (or even a lump sum) from your financial decisions:
Have a long, hard, think about just how far you want to trust them to think of your best interests over their own.


Regardless of that. Did you think prices were going to keep going up and up ?

If not, then you accepted at some point they were going to go back down again. So, did you think that was a long way oof thus giving you time to save up a buffer to avoid NE?

Or, didn't you care at the time about potential NE in the future?

b0rker

!!!!!!? wrote: »

So because 'you could lose your job at any time anyway' that wasn't a factor in your deliberations as to how much debt you would take on ?

Of course but if we sat around worrying that we were going to lose our jobs during boom time (it was still boom time) we would never have moved out of rented accomodation. As I stated we could afford the mortgage if one of us lost our jobs.

!!!!!!? wrote: »

Because "house prices have been going up and up in my city for the past 10 years" it was therefore OK to assume that they would never fall ??

I never said they that I thought they would never fall. I would not have expected the value of my house to drop by £20% in 2 years. A fairly reasonable assumption in the summer of 2007.

!!!!!!? wrote: »

You were taking on an eye-watering amount of debt and you didn't give the matter much more than cursory thought because you "...put complete faith in the system and the MA and did not relaise the risk I was taking" ???

We can afford the debt assuming we can keep our jobs. In fact we could pay off the whol e £100K between us in about 8-9 years if we really had to. I don't think you have read the rest of my posts in this thread. The debt is affordable. What is difficult to afford is £28K in 2 years.

!!!!!!? wrote: »

Just because people were lending irresponsibly is no reason to borrow irresponsibly yourselves.

Once again I do not think we borroed outwith our means. If we had secured a 5 year fixed we would have 5 years to find the NE not 2.

!!!!!!? wrote: »

No - the brutal truth is that it was downhill from the moment you bit off more secured debt than you could chew with no equity buffer.

No the brutal truth is that I don't think you seem to understand the point I am trying to make which is that we are probably part of the 1.5m stats that are being quoted in this thread.

!!!!!!? wrote: »

You were leaving yourself horribly exposed to the risk of having to default and losing your home if conditions changed from the patently unsustainable state of ever rising prices and a perma-boom in the economy.

[/quote]
Not exactly. As I say the debt is very affordable for us.

rrwfotr

The simple fact is economics! House prices will only go down as the economy is in recession, and far as I can see the UK will be in recession for at least 1 -2 years (well that’s what all the pundits think but mind you most of them haven’t got a clue!) . Therefore we will see prices coming down for that period once the economy picks up we will see prices going up. Banks will be very unwilling to lend in uncertain times. It’s as simple as that!

Cannon_Fodder

To be fair, I think there is probably a big chunk of the younger population that had never heard of NE before this crash happened.

Education, education, education - now, where have I heard that before?

b0rker

housesitter wrote: »

Here we go again:
In future.
When taking advise from people that take comission (or even a lump sum) from your financial decisions:
Have a long, hard, think about just how far you want to trust them to think of your best interests over their own.

In the future I will not be making the same mistakes that I made this time round. You must appreciate that there are many first time buyers who have not got a !!!!ing clue. I was one of them. I make no excuses for that.

housesitter wrote: »

Here we go again:
Regardless of that. Did you think prices were going to keep going up and up ?

If not, then you accepted at some point they were going to go back down again. So, did you think that was a long way oof thus giving you time to save up a buffer to avoid NE?

Or, didn't you care at the time about potential NE in the future?

Well as someone who spent pretty much all of his adult life (was 30 in 2007) watching hose prices rise I am not sure I would be expected to think much other than house prices rise. I am now only too aware of the fact that they do not. i do not blame anyone else for my situation. I do not however consider the choices I made when buying the house to have been poor judgement given the information I had at the time.

As I see said many times on this site. If you could predict the precise point as to when the bubble will bust then you would be a very rich person indeed.

Really2

Cannon_Fodder wrote: »

To be fair, I think there is probably a big chunk of the younger population that had never heard of NE before this crash happened.

Education, education, education - now, where have I heard that before?

Is it the corse Phil and Kirsty are going on after Relocation gets pulled.?

Really2

Ok So from what I can See it as more to do with when you were borne than anything else.

I was 25, purchased 01 (start of the boom) sold 08. Repurchased 08 and my HPI gains will now be lowered (well in theory but that another story.) but now have a top of the lader house.

I could of not purchased waited saved and still be in a virtualy identical position (but waiting to buy)

Any one who FTB now and in the next 5-10 years will now be looking at going throgh another bust period.

In the end, does it actualy make that much difference?

whathavewedone

I don't see banks doing negative equity mortgages while house prices are still falling.

At some point, however a bottom will be reached - no one knows when that will be in terms of time but it will probably start to happen when prices become attractive to cash buyers initially. I think the next stage will be that the banks will be more confident to lend, first time buyers will start returning to the market and at that point we may well see negative equity mortgages being offered again.

As to whether they will be available in 2 years I have no idea. It really depends on how quickly house prices fall.

housesitter

Really2 wrote: »

I dont' think my wife would be happy if she knew.:D

That would have been much funnier if you'd been female.
Opportunity wasted


As a side. I was talking to my father about his last house purchase which was in the 80's. Historically he'd always borrowed little, however house prices were closer to salary.

1986:
16K wage, 80K house with 60K equity and a 20K mortgage.

House on the same street of same style sold in 2007 for 400K.
Wage inflation puts us about the same wage betwen now and then.


I'd say that house prices are a little over the top.