Myth-Busting. Proving Bears Wrong, again.

Really2

Thrugelmir wrote: »

Bears don't need to be desperate. We are cash rich so can bide our time and pick off the good investment property.

You right they don't need to be but the majority are not cash rich though.

Thrugelmir

Really2 wrote: »

You right they don't need to be but the majority are not cash rich though.

Savers outnumber borrowers by 7 to 1.....

The debt lies with the minority.....

HousingBear

HAMISH_MCTAVISH wrote: »

Ah, but you're wrong.

Higher house prices do not translate into higher debt for those that already locked in a lower price that they paid on a house.

Buyers lock in a price.

Unfortunately, you've blown it there. Buyers lock in a price only if they then don't use the apparent increase in value of their house to borrow more. And they did borrow more - lots more - which is why MEW was QOQ positive during the 1996-2007 period.

Why did they borrow more? Because their houses were "worth" more. It was the rise in prices that fuelled the debt boom amongst both current and potential house owners.

People were using their houses as cash machines to fund consumer spending and it was that additional consumer spending that was contributing to the apparent growth of the last decade. Have you looked at GDP figures after removing MEW? A bit shocking really.

Now MEW has turned negative and people are paying back the debt. Banks aren't lending on the basis of increasing property values, despite this current upward blip. Even people asking for mortgage holidays are being turned down if they don't have at least 10% equity.

Using a house as a cash machine only works if house prices continue to rise ad infinitum, with people continuing to borrow on the basis of rising property values. As I've pointed out to you before (and I've yet to see you acknowledge the seriousness of the situation), the dramatic failure of this model was within six hours of causing CGNAO's worst predictions to come true in October 2008.

Just so you know: Speculation on house prices very nearly caused the complete economic collapse of the western world. Cheerleading the current blip in prices (and I am confident it will be a blip) is encouraging more of the same.

JonnyBravo

Thrugelmir wrote: »

Don't you detect the desperation of the bulls.......

There are some noticable absentees from this forum who had large BTL portfolios. Last we heard from one he was renegotiating finance on his 60 plus property empire.......:think:

60? :eek: Who was that?

house123

But these things can change sentiment Hamish. You cannot ignore sentiment; after all it’s what has currently stabilised the market.

Really2

Thrugelmir wrote: »

Savers outnumber borrowers by 7 to 1.....

The debt lies with the minority.....

I am a saver and a mortgage holder.

being a saver does not mean you are a bear though.

but if that is the case how come you lot are always going on about everyone is in debt.
Only 1 in 8 houses as a mortgage according to that stat

ad9898_3

I think it's safe to say, no BTL'r who is in trouble is going to show his/her face here, the only ones that do are the ones that are doing ok, if they started not to, expect them to disappear or change username.

I wasn't about in the cheerleading HPI days, but I suspect a lot of them have also disappeared and are in trouble.

Thrugelmir

Really2 wrote: »

I am a saver and a mortgage holder.

being a saver does not mean you are a bear though.

but if that is the case how come you lot are always going on about everyone is in debt.
Only 1 in 8 houses as a mortgage according to that stat

People can rent or live with parents etc. Don't have to owe on a mortgage. :rolleyes:

Debt creates problems for us all. Asset values falling wipes wealth from us all. We are all paying the cost for irresponsible lending through higher taxes for years to come. Though we've not enjoyed the benefits of mewing.

10% of all mortgages are BTL, plus lots of consent to let now......

Really2

ad9898 wrote: »

I wasn't about in the cheerleading HPI days, but I suspect a lot of them have also disappeared and are in trouble.

or fed-up or beleived in hyper-inflation

I think the main point for bears and bulls leaving is we seem to have the same conversations week in week out.:D

Really2

Thrugelmir wrote: »

People can rent or live with parents etc. Don't have to owe on a mortgage. :rolleyes:

Debt creates problems for us all. Asset values falling wipes wealth from us all. We are all paying the cost for irresponsible lending through higher taxes for years to come. Though we've not enjoyed the benefits of mewing.

10% of all mortgages are BTL, plus lots of consent to let now......

It was a simplistic joke as you were classing savers as bears.

It is simply not true, a bear could be in debt (graham) or a bull can be a saver (StevieJ).

How is the 7-1 figure derived? it sounds like net wealth I can not belive nearly 90% of the population do not hold any credit.