The big price falls are over.

ad9898_3

crazygaijin wrote: »

I am suprised Ad9898, you have changed your tune.

So are you saying that these artificaily low interest rates may last longer than previously expected? So the big crash is being postponed?

What do you think of the theroy about the more prolonged the time before the crash the bigger the crash will be?

The main point of my OP was to get some ideas from the bears here to why I am wrong, to a certain degree they have done this, make no mistake, for me at this point in time IR's are the 'finger in the dam', while rates stay low anymore price falls will be small (no HPI by the way, just a trough).

The big question is can the government keep IR's low for the duration of the hard economic times that are still ahead of us ?, if somehow they can, the 40%-50% off peak maybe averted, if they can't, then this 'trough' that I talk of will be merely another ledge on the edge of another cliff.

I know people personally who will be fooked if IR's rise (SVR's and tracker etc..), I don't think we can underestimate the pressure behind the 'dam', many hundred's of thousand's are right on the edge at this time. If SVR's crept upto 7-8% ish, the dam will break and 50% down would be almost guaranteed. The question is will it ? and if so when ?

neas

Id be more worried about dollar and pound devaluation as soon as we start defaulting on our national debt.

Gordon Brown has been palying tunes with the economy, propping it up by increasing debt.... its just getting to a point where confidence in uk will fall and nobody will lend Britain money...

Then we will be up 's hit' creak without a paddle... forget about houses.. think about shelter food and water then.

JonnyBravo

neas wrote: »

Then we will be up 's hit' creak without a paddle... forget about houses.. think about shelter food and water then.

Where's amcluescent and beaujolais_nouveau when you need em?

You'll be in good company in your bunker..... if they don't shoot you as you try and get in.....

IveSeenTheLight

neas wrote: »

forget about houses.. think about shelter

I thought houses were a form of shelter

Wookster

There was a documentary on C4 sometime ago, on which the former FD of Northern Rock was speaking. He had left after a disagreement with the CEO on risk. He said that there was not enough money in the UK to satisfy the mortgage market and therefore NR had to be reliant on international money markets.

There is proof, if ever you need it, that house prices are unaffordable relative to the UK economy.

Furthermore we've just had the worst economic data for 50 years, for my money it is way premature to be talking about an end to the big falls, after all, who knows what is [STRIKE]just round the corner[/STRIKE] to come after the election.

As that wonderful article on Moneyweek, the problem with UK house prices is affordability.

IveSeenTheLight

Wookster wrote: »

As that wonderful article on Moneyweek, the problem with UK house prices is affordability.

If you are looking at affordability as a multiple of income, then you are correct, the UK is slightly above the long term average with the 09 Q1 figures showing a multiple of 4.35 against the long term average of 4.02

If you look at the Mortgage repayment as a percentage of income, it is below the long term average with the figures being at 09 Q1 30.56% against the long term average of 37.29%

http://www.lloydsbankinggroup.com/media/excel/01_05_09Affordability.xls

StevieJ

IveSeenTheLight wrote: »

If you are looking at affordability as a multiple of income, then you are correct, the UK is slightly above the long term average with the 09 Q1 figures showing a multiple of 4.35 against the long term average of 4.02

If you look at the Mortgage repayment as a percentage of income, it is below the long term average with the figures being at 09 Q1 30.56% against the long term average of 37.29%

http://www.lloydsbankinggroup.com/media/excel/01_05_09Affordability.xls

Nothing like a good fact or two when you are dealing with Moneyweek and Wookie

Graham_Devon

IveSeenTheLight wrote: »

If you are looking at affordability as a multiple of income, then you are correct, the UK is slightly above the long term average with the 09 Q1 figures showing a multiple of 4.35 against the long term average of 4.02

If you look at the Mortgage repayment as a percentage of income, it is below the long term average with the figures being at 09 Q1 30.56% against the long term average of 37.29%

http://www.lloydsbankinggroup.com/media/excel/01_05_09Affordability.xls

StevieJ wrote: »

Nothing like a good fact or two when you are dealing with Moneyweek and Wookie

Another fact is that if you look at how the affordability is calculated above, it only counts males and also is done on the mean. Which pushes the average wage for their affordability multiples.

chucky

Graham_Devon wrote: »

Another fact is that if you look at how the affordability is calculated above, it only counts males and also is done on the mean. Which pushes the average wage for their affordability multiples.

instead of trying to twist things it would be good if you could reply to ISTL's point about affordability. it looks like you agree with it otherwise.

The_White_Horse

StevieJ wrote: »

Horsesh1t - end of

Not at all. in 2007 someone earning 30k could be lent almost 10 times their salary, without about 30p as a deposit.

Now they will be lucky to get 150k and will need a 20k deposit.

Until banks start lending like they did, house prices will never get back to those heights. And the banks won't lend like that again for a long long time!!!

maybe they will lend to someone on 50k a year, with a perfect credit history - but they won't lend to joe bloggs builder/plumber etc massive multiples of non existent salaries.

A house in or around London which is currently worth 300k should be worth no more than 180-200k - which it will be within 2 years.

It is so obvious. The only reason why they haven't collapsed so far is idiot belief that houses are "affordable", a reluctance by sellers to price accordingly, and low interest rates.

rates are now 5-6% for fixed deals, with base at 0.5%

you could get 5-6% deals when base was at 4-5% a few years back.

At this rate, most mortgages will be 8-10% as soon as base starts rising. Then you will see a nuclear fall out.