If house prices fall another 37% ...

Really2

Wookster wrote: »

Who's sock puppet are you? Really2? Seems like you have a similarly low IQ if the best arguments you can put forward are those above. Better luck next time...

What the hell is your problem. I thought we had sorted this out.:mad:

Low IQ, don't kid your self I may have poor written english but that is nothing to do with IQ you muppet.

Why don't you just get lost.
Yet another example why they want to move the board.

Bears sort this twit with an "a" out before he does get the board put in the "arms"

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Kenny4315 wrote: »

I am fairly confident that I won't be getting my gums around Gordon's plums. :money:

57% correction you guys .... :rotfl: :rotfl:

We are nearly halfway to that figure Kenny, and with IR's only going one way in the future, inflation without wage inflation, unemployment upto 3 million by the end of the year, and finally our subprime to hit the fan, I say at least take your teeth out ready.:D

whathavewedone

If prices were to drop by this amount then interest rates would have to stay extremely low for a very long time as they have done in Japan in order that the majority of people can continue to service their debt.

The alternative would mean that huge numbers of people would declare themselves bankrupt which would further undermine the banks and the economy in general.

In previous recessions the banks could recover their losses in most cases - if prices crash a further 37% and interest rates then go up how are they going to make back the money that they've lost?

Consequently I don't see a combination of house prices 70% off peak with interest rates of 8% plus.

If we end up like Japan then our interest rates will be low for yonks and our economy depressed for decades. I don't see how that would be good for anyone.

I don't believe the guy who wrote the article believes we'll have falls like this for a minute but he's sold to rent so has a vested interest in talking the market down, hurrying people into the fear and capitulation stages etc. Of course if people were stupid enough to believe him and put their houses on the market for 20% below current market value believing they were doing well for themselves then the market would plummet wouldn't it? Talking down the economy DOES work because it erodes confidence. You bears know that full well, hence you all wetting your pants over the prospect of the board being moved to the obscure reaches of MSE.

FWIW we won't be selling our house on the strength of this suggestion and I'm the only person I know who has a mortgage and actually takes an interest in the economy.

Most people I know switch off gloomy news and certainly don't go on websites like MSE, HPC etc. They know things are c*ap but they're just getting on with their lives as usual, taking their kids to school, worrying about whether they're going to get into the school of their choice, that kind of thing.

Graham_Devon

whathavewedone wrote: »

In previous recessions the banks could recover their losses in most cases - if prices crash a further 37% and interest rates then go up how are they going to make back the money that they've lost?

QE and bailouts.

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whathavewedone wrote: »

If prices were to drop by this amount then interest rates would have to stay extremely low for a very long time

But the setting of IR's has nothing to do with house prices, apparently.:rolleyes:

whathavewedone wrote: »

The alternative would mean that huge numbers of people would declare themselves bankrupt

Why ? house prices have increased by 200-300% over the past 13 years, for them to halve in value shouldn't be that bigger deal for the majority of people, unless of course people have been mewing to finance their lifestyle, in which case it's a lesson to be learned, and no sympathy is required.

whathavewedone

Oh not mewing again.

People who bought within the last 5 years would come into this category even if they bought with a decent deposit and didn't mew.

We bought with a 25% deposit in 2007, put another 16k in 2008 and are now overpaying.

If our house was worth £200kish in 3 years time when we go off our fixed rate and interest rates are high there would be little point in fighting as we'd never have any hope of repaying our negative equity.

Would just go bankrupt leaving the bank to whistle for it's 100k. Us and how many others?

Going back to your original mewing point - yes there are people who did that who will be destroyed along with the people who bought in the last five years and those who bought with 100% and 125% mortgages.

The powers that be aren't going to distinguish between the people who bought during the boom with deposits and those who mewed their equity away or bought without deposits.

Have you not worked out yet that there are no prizes for prudence? All anyone gives a F*** about is making the banks profitable again. How the hell can they pay back taxpayers and go back to lending again if there are further massive defaults from all the people in the categories above?

It's not that there's nothing wrong with cheap house prices per se but to go from the house prices we have now to very cheap house prices will cause carnage to the economy and leave many many families without a home.

angrypirate

zappahey wrote: »

Not to suggest that his vested interest is directing his writing but it should be noted that, like me, Cliff D'Arcy, the author of the article, has sold to rent.

That simply means he puts his money where his mouth is. How many people go on about "house prices only ever go up" but then dont take their own advice?

Graham_Devon

whathavewedone wrote: »

Oh not mewing again.

People who bought within the last 5 years would come into this category even if they bought with a decent deposit and didn't mew.

We bought with a 25% deposit in 2007, put another 16k in 2008 and are now overpaying.

If our house was worth £200kish in 3 years time when we go off our fixed rate and interest rates are high there would be little point in fighting as we'd never have any hope of repaying our negative equity.

Would just go bankrupt leaving the bank to whistle for it's 100k. Us and how many others?

Why on EARTH would you decide to go bankrupt and not only put yourselves basically on the streets, because you have negative equity?

That's a really extreme scenario you are painting, and I very highly doubt many others would be with you, apart from those who cannot pay their repayments.

To say you would simply go bankrupt because of negative equity, is frankly bizzare. You'd be shooting both your feet.

penguine

whathavewedone wrote: »

Talking down the economy DOES work because it erodes confidence.

whathavewedone wrote: »

Most people I know switch off gloomy news and certainly don't go on websites like MSE, HPC etc. They know things are c*ap but they're just getting on with their lives as usual, taking their kids to school, worrying about whether they're going to get into the school of their choice, that kind of thing.

If most people ignore gloomy economic news, then how can talking down the economy erode confidence?

space_rider

If my house were to drop by that much, if I had to sell it, I would just get enough to pay the mortgage off and the fees. As I don`t intend to sell until I can downsize I`m not too bothered. As long as I can afford to pay the mortgage and upkeep it`s no big deal. I did put down a £50,000 deposit but I`m sure in my lifetime I`ve squandered that in holidays, clothes, cars etc.