If house prices fall another 37% ...

Wookster

Kenny4315 wrote: »

I heard of negative equity ?

If you wipe off 57% of the housing value then that's masses of personal wealth gone, the asset devalues and the liability remains. In short a 57% fall won't happen because it would be catastophic, and Mr Clown knows it.

I still don't understand how negative equity bankrupts people.

If they can still maintain the mortgage payments then there isn't a problem, other than sour grapes at having paid too much :rolleyes:

StevieJ

Jim_B wrote: »

And yet prices are dropping rather than rising. It's almost as if people will pay anything for a house in a boom and the only limit is how much the bank will lend them. Well, I say "almost"; that's exactly how it is!

Same as now, the only limit is what the bank will lend them (and deposit).

StevieJ

Graham_Devon wrote: »

I meant its gone passed 20% falls by spring.

Were already passed 20% and it's not the end of spring

Mindyou, I guess you could say your not wrong yet, and hope for a few increases!



What about when were passed 35%?

Not with you on that one:cool:

On an annual basis, the average price of all completed transactions in England and Wales is now 13.3% lower than a year ago. All ten regions in England and Wales are showing prices falling on both a monthly and an annual basis.
http://www.acadametrics.co.uk/ftHousePrices.php

Then again you have a 20% spread on yours

Kenny4315

The reason why negative equity is such an issue is because when your in that situation most ain't able to sit it out, and in a market that dropped by 57% then there no chance of waiting for a recovery. They can't remortgage and more often than not the payments become unaffordable, and thus it forces them to be repo'd and when they come out of the other end they ain't got a bean left.

Graham_Devon

StevieJ wrote: »

Not with you on that one:cool:

On an annual basis, the average price of all completed transactions in England and Wales is now 13.3% lower than a year ago. All ten regions in England and Wales are showing prices falling on both a monthly and an annual basis.
http://www.acadametrics.co.uk/ftHousePrices.php

LOL.

So your predition is YOY then, not from peak, like the rest of the thread is talking about!

ad9898_3

Kenny4315 wrote: »

There's more chance of me going down on Mr Clown than a 57% fall from peak. :eek:

Oh this is going to be funny when it's posted on youtube. With 21% down now, unemployment just taking off, tax bombshell around the corner, and last but not least the artificially low interest rates that can only go one way now.

I think you maybe eating your words, or maybe if you keep your word, you maybe eating something else.:D

I would say it maybe unlikely, but I wouldn't bet on gobbling Brown's trouser snake on it.

Graham_Devon

Kenny4315 wrote: »

The reason why negative equity is such an issue is because when your in that situation most ain't able to sit it out, and in a market that dropped by 57% then there no chance of waiting for a recovery. They can't remortgage and more often than not the payments become unaffordable, and thus it forces them to be repo'd and when they come out of the other end they ain't got a bean left.

You looking forward to it!? ;)

Jim_B_3

StevieJ wrote: »

Same as now, the only limit is what the bank will lend them (and deposit).

Between you and me, I honestly believe that if God announced that house prices were going to half in six months and on the following day Northern Rock started redoing 125% 6x Joint Income mortgages, there would be a queue outside before opening time.

bluey890

Wookster wrote: »

Falling house prices alone don't bankrupt people. Losing jobs and being unable to service debt repayments do.

it does if you have masses of BTL and need to refinance.

Wookster wrote: »

It is the foolish notion that house price rises are wealth that has caused this problem.

house price rises are wealth, its just not realised wealth until there sold.

now i see how rochdale runs rings around u.

mewbie_2

bluey890 wrote: »

house price rises are wealth, its just not realised wealth until there sold.

Ah yes. So durign the boom as people got more 'wealthy' they were able to cash in on the value of their houses by releasing equity (not borrowing of course).

Umm what happens when they go down? Does that wealth disappear? Oh no it can't - because they invested in 4 x4's and foreign holidays, or even... oh stop me.. I'm going to laugh... or even BTL's.

So wealthy as prices rise. And .. er.. what is the opposite of wealthy when prices fall?

Hilarious.