Property crash soon???

roswell

"""Even if there is a housing correction, negative equity is not a problem as long as you can afford repayments and see it through. Prices will always rise again.""""

Can I assume from that comment your looking only at the price of property ??? as you will see you need a trigger eg interest rate increase`s, In that situation increased cost of borrowing one money that people have already over borrowed will mean that they are unable to make repayments ....

The view is a general global slow down which we are already seeing ... one fault of being in a global economy is butterfies flapping there wings in china really do cause tidal waves (financialy)

If you can just make the repayment on your morgage but cant make the payments on your CC loans car etc

There will be no single event that ONLY affects house prices, there will be a critical change to financial life that will cause other factors like over borrowing / house prices / increased unemployment / recession.

If your only looking at your house maybe its time to look at the window .. look at all the cars under 3 year old the sky dish`s / new laptops / kids in private school / consumer goods.

As its already been noted how does tesco make more profit selling essentials and comsumber spending is slowing ... maybe because more people are paying more to live and have finaly noticed that they cant borrow any more money for that holiday for that 2 week that costs 1 months wages before interest ???

Nows the time to pay off debts while its cheap not borrow more.

njwd

Absolutely. I've posted this before, but I'm going to post it again:
http://www.creditaction.org.uk/debtstats.htm

The debt in this country is absolutely staggering, combined with the huge surge in Mortgage Equity Withdrawal - remortgages (MEW) and this country's economy doesn't look as rosy as 'Prudence' Brown likes to make out.

Source: http://www.in2p.co.uk/nr/stats/amount-lent-for-remortgages.jsp;jsessionid=2FA023332DF7AF8660F3D9479641528B


Last year I believe MEW accounted for ~10% of entire consumer spending in this country. What happens when there is no more equity left to extract? Not least the fact that this will have to be paid back over the duration of the mortgage.

Tassotti

For all you negative posters (mostly from HPC probably), my post was meant specifically for the poster who actually earns a decent wage, lives around the London area, and has options.

Just because you may not be financially secure, it doesn't mean everyone else isn't . (noisy neighbours...what???)

You may feel hard done by by paying off other peoples mortgages (like mine) but then again, you will never own a property.

Its fine that you are happy to pay off other peoples mortgages (as your rent is so low compared...), but then don't whinge about it. Its your choice.

I do agree, however, that if interest rates treble, everyone would be in trouble. Recession, repossessions, and you still wouldn't buy, in the hope that house prices will drop by another 2%.

I, however, will keep on buying, as I see the long term statistics in my favour.

njwd

Tassotti wrote:

For all you negative posters (mostly from HPC probably), my post was meant specifically for the poster who actually earns a decent wage, lives around the London area, and has options.

Just because you may not be financially secure, it doesn't mean everyone else isn't . (noisy neighbours...what???)

You may feel hard done by by paying off other peoples mortgages (like mine) but then again, you will never own a property.

Its fine that you are happy to pay off other peoples mortgages (as your rent is so low compared...), but then don't whinge about it. Its your choice.

I do agree, however, that if interest rates treble, everyone would be in trouble. Recession, repossessions, and you still wouldn't buy, in the hope that house prices will drop by another 2%.

I, however, will keep on buying, as I see the long term statistics in my favour.

There are an awful number of assumptions there.

Wickedkitten

njwd wrote:

There are an awful number of assumptions there.

No more than usual really.

exil

I just wonder how many doom-mongers here have actually sold their house and are now renting. I'm not inclined to pay any attention to those who haven't.

MORPH3US

njwd wrote:

There are an awful number of assumptions there.

None bigger than the assumption that interest rates will rise to 15%, house prices will tumble, the economy will crumble and that everyone that owns a house cannot afford it and will be declered bankrupt!

Anyway, whats to worry about:

I predict the world will spontanepously (sp?) combust in 2009 and the whole of the human race will be wiped out. Then no one will have to worry about mortgage rates and house prices!!

Tassotti

Agreed, there are a lot of assumptions. However, it does appear that many negative posters are the type that appear on HPC.

Now, they have their place (in a dream world) but this is a site about saving money, and there are many FTBs on here asking for advice.

If they believe the drivel spouted by these people, then this adds to the aleady huge amounts of stress they will be feeling.

At the end of the day (whatever your beliefs are), FTBs (Second TBs) are looking for a home and want to get the best deal they can.

This site is good in that opinions can be expressed openly, and I apologise for my assumptions. My only explanation is that I have been looking at HPC for too long and have become bitter.

I wish everyone the best of luck in their decisions (btw if house prices drop by 27%, I will have lost 1.25 Million!!!)

NSR2

MORPH3US wrote:

None bigger than the assumption that interest rates will rise to 15%, house prices will tumble....

Err they don't need to rise 15%, Just a couple of 0.25% increases will do it.

From the looks of things that could be closer then you think:

Option 1, IRs stay at 4.5% or fall, Sterling tanks, imported goods cost more,
inflation rises, IRs increase to beyond 4.5%, people who have over borrowed lose, HP bubble bursts

Option 2, IRs rise, sterling doesn't tank, HP bubble bursts..

Any other options?

Broken_hearted

From my point of view it doesn't matter whether it crashes or not. I will still have a home I can afford to live in even if it goes up to 10%.