House prices down to at least 115K... Thans FSA! 3X here we come!

chucky

mbga9pgf wrote: »

:beer:

http://www.propertyweek.com/story.asp?sectioncode=297&storycode=3136243&c=1




Taking the bulls imaginary average wage of 36K (Yeah, right....)
plus the 5% deposit, prices WILL crash to at least 115,000 average... this is before the effects of any recession (depression) are factored in.

:rotfl::rotfl::rotfl::rotfl::rotfl:

before we start to go on about the same stuff repeated THIS IS NEW!!!!!


Everyone dance along with bowie now...

http://www.youtube.com/watch?v=30AVhf-ZLwM

a little flaw here - this is very similar to what that Spain's regulators have.
it didn't stop HPI there... can't see it having much impact here either.

it's a political rather than a regulatory measure.

Graham_Devon

ukcarper wrote: »

I don’t Know why people keep saying the average house price is 3 or 4 times average salary + 5% or 10% they never have been. In the early seventies house prices almost doubled in 18 months and multipliers were 3 to 4 times then.

Theres a difference between what people will lend you, and how much a house is.

The problem in the last 5 years has been that house prices kept going up, and so did the amount they would lend you.

That probably wasn't seen in your 70's analogy. I say probably because I don't know. I would imagine you just couldnt afford a house at all if your income didnt stretch to it using the 3-4x wages.

mbga9pgf

Graham_Devon wrote: »

Theres a difference between what people will lend you, and how much a house is.

The problem in the last 5 years has been that house prices kept going up, and so did the amount they would lend you.

That probably wasn't seen in your 70's analogy. I say probably because I don't know. I would imagine you just couldnt afford a house at all if your income didnt stretch to it using the 3-4x wages.

Anyone want to remind us what wage inflation was like in the 1970s compared to now? :rolleyes:

ukcarper

Graham_Devon wrote: »

Theres a difference between what people will lend you, and how much a house is.

The problem in the last 5 years has been that house prices kept going up, and so did the amount they would lend you.

That probably wasn't seen in your 70's analogy. I say probably because I don't know. I would imagine you just couldnt afford a house at all if your income didnt stretch to it using the 3-4x wages.

That is true but in 1972 I bought a new house in may for £8,000 they were £5,500 at the beginning of the year and over £10,000 in the beginning of 1973. Wages went up a bit but the mortgage criteria was the same.

Really2

Graham_Devon wrote: »

http://www.guardian.co.uk/business/2009/mar/15/fsa-mortgages-regulators

.

Again no mention of 3X Salary.

Graham_Devon

Really2 wrote: »

Again no mention of 3X Salary.

No, but it mentions the problems with above 4 times salary.

I don't think anyone is going to give you what you want, and commit to publishing something before it's actually been announced.

whathavewedone

So far as people who already have already bought are concerned I imagine it's the same as it's always been. If you are in negative equity or have less than a 5% deposit you can't move or remortgage but just go on the SVR with your existing lender until you are out of negative equity.

Coventry are already doing 100% mortgages for existing borrowers. I expect the banks who have received government money will roll out similar deals, particularly if prices do fall a lot further. It wouldn't be in the banks' interests to repossess people in 100s of thousands of equity because they'd never get their money back. It would also cost the taxpayer more.

The only people who will get repossessed will be the people who can't pay their mortgage same as in previous recessions.

GDB2222

Really2 wrote: »

PS The telegraph link does not even mention that.:)

You are right, the previous link does not mention that. But this link does:
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/4995778/FSA-to-cap-mortgage-borrowing.html


"As part of a wide-ranging package of announcements for banking regulation following the near-collapse of the financial system, Lord Turner, chairman of the Financial Services Authority, will also declare a ban on 100 per cent mortgages.In all but the most exceptional circumstances, it will become "normal practice" again for loans to limited to a maximum of three times the borrower's salary.
And as part of their deal, prospective home owners will have to provide a deposit of at least 5 per cent - with many banks and building societies expected to ask for even larger amounts."

Really2

Graham_Devon wrote: »

No, but it mentions the problems with above 4 times salary.

I don't think anyone is going to give you what you want, and commit to publishing something before it's actually been announced.

4X Customers income is different to 4X salary, I think you mis-read it.

ad9898_3

whathavewedone wrote: »

So far as people who already have already bought are concerned I imagine it's the same as it's always been. If you are in negative equity or have less than a 5% deposit you can't move or remortgage but just go on the SVR with your existing lender until you are out of negative equity.

Coventry are already doing 100% mortgages for existing borrowers. I expect the banks who have received government money will roll out similar deals, particularly if prices do fall a lot further. It wouldn't be in the banks' interests to repossess people in 100s of thousands of equity because they'd never get their money back. It would also cost the taxpayer more.

The only people who will get repossessed will be the people who can't pay their mortgage same as in previous recessions.

Ironically, it could be this kind of measure that keeps house prices tanking, leaving the generation who bought in the last seven years with a high LTV 'swinging in the wind', while people who bought before this (and didn't mew for a plasma TV) and people who buy from 2010 onwards get to live a much better lifestyle, free from huge mortgage debts.