House prices could fall another 40% from here.

carolt

inspector_monkfish wrote: »

what ????????

Reread it.

It's cyptic, but I wouldn't have thought it was beyond you.

You seem like a generally bright chap.

Graham_Devon

StevieJ wrote: »

So have house prices hit the bottom?

On the same basis, today, the ratio, based on an assumed average household income of £31,200 and an average HBOS house price of £160,869 is still a very high 5.16 times. To give you an idea of just how high that is, it's still above the 1989 peak ratio of 5.02 times.


That is interesting considering Bank rate was 14.875% in 1989 and 0.5% now Although to be fair I think we should use a rate of 5% for comparison purposes.
Wow it must have tested family finances in 1989, what was that phrase Macmillan used it would be quite apt today.

What is happening this time round, however, is that the bank rate really isn't making that much difference.

The rate may be 0.5%. But as we are seeing daily, mortgages companies are hiking their rates, soon to be 6%....5.5% above base.

So in effect, you would have to tell me mortgages in 1989 were at 19.5% for new buyers or those remortgaging. I have no idea if they were or not to be able to use this comparison fairly.

Thrugelmir

kennyboy66 wrote: »

Like this one;

Shares are good value.
October 16th 2007

FTSE 100 down 25% since then.

All invested in pension wrapped with tax relief. Minimal investment in mortgage lending banks. Ah yes..... not forgetting increasing reinvested dividends ..... :j


:beer: ........ quite happy considering the turmoil in the economy. Ready for the upturn.

michaelboyd2

interesting article.

StevieJ

carolt wrote: »

Yes, but it only hit those rates for a very short time - couple of months I think. Plus wage inflation was far higher, so the rates quickly became bearable. I recall lots of people working second jobs at the time. Obviously, those who couldn't get a second job fed into the repossession statistics.

It was 14.875% from the 6th Oct 1989 to the 8th Oct 1990, I make that around 12 months it did ease gradually to around 10.5% in the next 12 months :eek:.

kennyboy66_2

Graham_Devon wrote: »

What is happening this time round, however, is that the bank rate really isn't making that much difference.

.

Is it making no difference if you are on SVR ?

StevieJ

kennyboy66 wrote: »

And perhaps the Daddy of them all.

US housing: it's not a bubble

By James Ferguson Dec 12, 2005



http://www.moneyweek.com/investments/property/us-housing-its-not-a-bubble.aspx


I don't usually do smiles but that really deserves one:rotfl:

That is a seriously class find, ever thought of taking up investigative journalism :beer:

StevieJ

Graham_Devon wrote: »

What is happening this time round, however, is that the bank rate really isn't making that much difference.

The rate may be 0.5%. But as we are seeing daily, mortgages companies are hiking their rates, soon to be 6%....5.5% above base.

So in effect, you would have to tell me mortgages in 1989 were at 19.5% for new buyers or those remortgaging. I have no idea if they were or not to be able to use this comparison fairly.

Can't you read, I said
'Although to be fair I think we should use a rate of 5% for comparison purposes'

Graham_Devon

kennyboy66 wrote: »

Is it making no difference if you are on SVR ?

I'm now at 3.5%, down from 6.75%.

So 3% above base from around 1% above. Although rumour has it SVR's are gonna go up soon?

kennyboy66_2

Thrugelmir wrote: »

All invested in pension wrapped with tax relief. Minimal investment in mortgage lending banks. Ah yes..... not forgetting increasing reinvested dividends ..... :j


:beer: ........ quite happy considering the turmoil in the economy. Ready for the upturn.

Hindsight is a great thing, but do you imagine anyone investing in share trackers since that article is happy.

I'm a big fan of shares in the long run, but tax relief or not, you would be very lucky to sitting on a gain since he published that article.
I missed the bit where he advised not to invest in banks.

In fact his advice "big is best" would seem to guarantee you would be exposed to some financial sector.

He managed to make the FTSE 100 a buy at its highest value in 5 years.

Probably best to stick to writing about it rather than doing it.