Potential buyer having trouble getting mortgage

Milliewilly

mbga9pgf wrote: »

Let them sit it out. I am willing to wait till the pea soup is dribbling down their chin and they are in a home before they claw a penny out of my hand for a home they bought at my age for a fraction of the price.

And its a home. Its not an asset. Pick an investment vehicle that doesnt screw the next generation and their children. And they arent getting their money back either. They are multiplying their initial investment by 5, sometimes 15 times the value they put in to it. Greed.

Oh, I think you will find homeowners have had to cut prices30%+ in Greece, Ireland, the US and of course Japan, where, land supply and overpopulation are far greater issues.

They may have chosen to save rather than spend on credit; makes no odds, becuase thats exactly the road that international investors are pushing the UK down.

I had a 25% offer off accepted recently; unfortunately, the seller blinked and I am no longer interested. As Brit points out, prices are now falling again with NO GOVERNMENT MONEY TO SAVE YOU THIS TIME! 2010 will see the start of a slow, drawn out price decline that will last 5 years. Better get used to lower prices and a less luxurious retirement people!

Still as bitter about not getting the detatched house with land that you are 'entitled to' because you have a wife and children on your salary?

Why only put a 25% offer off in if you think we are at the start of a 5 year decline and Greece Ireland etc have already dropped 30%?

Is the real reason because the airline industry is going to go into an even worse decline so you are too scared about your job security to buy?

mbga9pgf

Who said I worked for an airline? And I dont have kids, my wife works full time.




Oh, sat on my 100K deposit now, which makes all the difference, as opposed to a millstone of a property I cant sell and a shedload of negative equity to boot.

Hate to break sour news to you jack, the airline industry is international. So, when I DO elect to go work for them, with over 4000 hours heavy jet, I get to pick from Quantas, ANZ, Emirates or even Air Canada. BA and Virgin are both re-starting recruitment next year to fill the boomer retirement gap, even if I was stupid enough to stick round in the UK to get taxed to death.

Whilst you and your generation will be b*tching about how the younger generation upped and left and how unfair it is they are not going to pay for your extortionate cancer drugs and OAP homes, I will be enjoying the delights... with money earned by hard work as opposed to stolen from my grandchildrens pay statements before they are born.

Bitter lemons old boy. Whats up, sat on Negative Equity? To answer your question, Mervyn announcing the SLS would not be rolled over changed my view on a few things, as did the liklihood of a hung parliament, which will be disasterous for the UK economy and house prices.

Good little dit from that Idiot Anatole over at the Times:

According to Treasury forecasts, public borrowing will be reduced from 12.6 per cent of GDP in 2009-10 to 12 per cent in the next financial year, 9.1 per cent the year after and 4.4 per cent by the end of the next parliament in 2014-15.

That scale of public expenditure cutback will not go unnoticed in the housing market.

brit1234

Milliewilly wrote: »

Why only put a 25% offer off in if you think we are at the start of a 5 year decline and Greece Ireland etc have already dropped 30%?

Because its the start of a 5 year or so downturn and sellers are only starting to realise. It doesn't matter what happened else where, its the stimulas and size of housing buble here.

Stimulas gone or ending, rates going up. House prices are going down to normal values. Do you really think all this unsupported decade of house price inflation is sustainable. Come on, the fraud is being clamped down and banks are lending less which will fall further as government support ends.

WallyBird

PasturesNew wrote: »

Title should be changed from
"Potential buyer having trouble getting mortgage"
to "Ill-prepared time-waster viewed my house"

You are funny!
Actually, perhaps it should be "Ill-prepared time-waster viewed my potential buyers' house"

property.advert

mbga9pgf wrote: »

This situation is bound to get much, much worse between now and 2014. THe BOE have effectively said they categorically cannot roll over the Special Liquidity Scheme, meaning banks will have to magic 300 billion between now and then. only way to do that is cut savings rates, hike mortgage rates and stop lending.

Simple fact is, until we see a 40% correction from 2007 prices, houses/flats will be unaffordable.... You were unlucky enough to buy (I am guessing here)in atime when money was thrown at people to buy homes. Those days have gone for a long long time. How can a FTB on 20K a year afford the typical average FTB home cost of 120K? Thats over 6 times earnings after moving costs... its obscene.

Either FTB homes are not going to sell, or people are going to have to start dramatically dropping prices again to get a sale. The cash buyers are spent, now its down to good old market forces to correct house prices to the correct level.

Few people seem even to realise that the only way for FTB's to pay for their over 4 times salaries properties is to get a cash handout. Now there is some assistance coming from elderly relatives dying and leaving inheritances which can be passed straight to the FTB generation but not everyone is in that position. I never was, but had I had kids early in life and had a normal life, I guess I would inherit in my 40s and if my kids were in their 20s then I could theoretically pass on that inheritance and let my kids buy a place.

My first property in London is a £500,000 flat now. Only 2 beds but a single person would need a traditional income of £150,000 or even a more relaxed income of £125,000. Not many people even in London get that salary when they are 25. Buy a 1 bed and maybe you can go down to £350,000 and a salary of under £100,000. For people on the national average of 25k, what on earth can they buy ? they cannot afford a car nevermind a house.

Something has to give, just has to.

However, rent is dead money. Buying a property which over time does not lose value and which costs the same as your rent is still a good idea. If it costs less than your rent then it is a very good idea. I would love a convertible mortgage, low over base now but as base rises, it converts to a 10 year fixed at a predetermined rate.

There is another factor in this which I see in sales of businesses overseas where I lived. When people cannot afford to sell at the real market value, then sales dry up and prices stabilise or rise. I could see this in the UK where prices just refuse to fall because people just refuse to sell at the prices offered. It is happening in places in SE Asia and has been going on for 2 years.

The final added thing is that people with a mortgage may not be able to get another one which means that they are stuck with the property and cannot relinquish it because they would not get back in the market. That will push prices up against a limited supply and is a new phenomena we cannot factor in because we have not seen it before.

RX-78

mbga9pgf wrote: »

Let them sit it out. I am willing to wait till the pea soup is dribbling down their chin and they are in a home before they claw a penny out of my hand for a home they bought at my age for a fraction of the price.

And its a home. Its not an asset. Pick an investment vehicle that doesnt screw the next generation and their children. And they arent getting their money back either. They are multiplying their initial investment by 5, sometimes 15 times the value they put in to it. Greed.

Oh, I think you will find homeowners have had to cut prices30%+ in Greece, Ireland, the US and of course Japan, where, land supply and overpopulation are far greater issues.

They may have chosen to save rather than spend on credit; makes no odds, becuase thats exactly the road that international investors are pushing the UK down.

I had a 25% offer off accepted recently; unfortunately, the seller blinked and I am no longer interested. As Brit points out, prices are now falling again with NO GOVERNMENT MONEY TO SAVE YOU THIS TIME! 2010 will see the start of a slow, drawn out price decline that will last 5 years. Better get used to lower prices and a less luxurious retirement people!

I think the difference between the opinion is wether you see the "house" as an investment or place you live & grow.

As an investment you may want to wait and see if there will be a second crash. Although change in political party/economy may force the government to increase the spending in cirtain area whilst cutting back on less neccessary area (like MP's expense :rotfl:). I also dont think the interest rate will rise too soon - they know it will adversley affect struggling business/home owners and cannot risk driving the whole market down.

As a place of living, people will pay whatever the current market value is, rather than its future market value. I for one see it as a home - we would rather buy a home with garden in a quiet suburb to raise a family rather than in busy city centre. We cannot wait 5 years to have kids as we'll be getting on a bit too much by than! In this sense the social needs out weighs the financial one.

May be this is because I'm a firm believer in having a different perception at different ages. Ibiza at aged 18 will look very different from visiting Ibiza aged 80 (well for most people....)

brit1234

RX-78 wrote: »

I think the difference between the opinion is wether you see the "house" as an investment or place you live & grow.

As a ftb with a big deposit I'm priced out of the market still, my whole life is on stand still.I have no option other to save more and wait for prices to come down.

RX-78 wrote: »

As a place of living, people will pay whatever the current market value is, rather than its future market value.

Wrong people will pay based on the current lending criteria not what the socalled market value. Today people need big deposits and lots can't buy, tomorrow the banks will lend less. remember it was ever lossening lending standards and low interest rates that helped to creat this bubble and allow mass fraud to take place.

Prices will come down with the lending criteria.

RX-78

Brit - "market value" should reflect the current lending criteria as people's ability to buy in itself influences the demand. Less lending will lead to less demand as people cannot get a mortgage. So its the old demand & supply curve.

May be I didn't explain myself - sometimes what you need/want now is greater than the cost effectiveness of waiting. So for me;

emotional/social gain by buying now > financial gain by waiting

Ofcourse this may be very different for you, depending on your needs. Who was it that said time is money....

mbga9pgf

RX-78 wrote: »

I think the difference between the opinion is wether you see the "house" as an investment or place you live & grow.

As an investment you may want to wait and see if there will be a second crash. Although change in political party/economy may force the government to increase the spending in cirtain area whilst cutting back on less neccessary area (like MP's expense :rotfl:). I also dont think the interest rate will rise too soon - they know it will adversley affect struggling business/home owners and cannot risk driving the whole market down.

As a place of living, people will pay whatever the current market value is, rather than its future market value. I for one see it as a home - we would rather buy a home with garden in a quiet suburb to raise a family rather than in busy city centre. We cannot wait 5 years to have kids as we'll be getting on a bit too much by than! In this sense the social needs out weighs the financial one.

May be this is because I'm a firm believer in having a different perception at different ages. Ibiza at aged 18 will look very different from visiting Ibiza aged 80 (well for most people....)

Look what happened in Iceland. They may have not wanted to triple them, but the moment the international markets shunned them, Interest rates went to 11%, from 4%. That sort of rise here would wipe a lot of people out. Oh, their central bank didnt have a say so. It was a case of either they raised rates, or the government were going to be unable to generate funding on the international markets. No-one wants to raise interest rates. But they still go up. (Look at current FTB mortgages as an example).

Once the government mortgage support schemes end, and we get the bow wave of repos that they have generated, the "appetite" for owning homes is going to go through the floor. As it did in the 1990s.

DVardysShadow

mbga9pgf wrote: »

... Once the government mortgage support schemes end, and we get the bow wave of repos that they have generated, the "appetite" for owning homes is going to go through the floor. As it did in the 1990s.

But only on the other side of the election.