FSA warns on levels of UK mortgage debt

Thrugelmir

RenovationMan wrote: »

. I also dont believe that anyone in any authority, whether in government or banking has learned a thing from the last housing boom and subsequent crash.

That's the purpose of tighter global banking regulation, in particular capital requirements. Implementation of Basle 3 was pushed out to 2018, as the fiscal tightening to reduce Government deficits was deemed enough for the global financial system to cope with initially.

abaxas

ukcarper wrote: »

But you say planning is fixing the market so what would you like done.

The return of the building plot, where areas as desgined with roads and utilities and a rough specification of housing. People then buy the plot and build their own home.

Lets plan the future.

mbga9pgf

RenovationMan wrote: »

'Ever' is a long time, mbga. I did a quick google of "will house prices every reach 2007 peak again?" and there was a wide range of opinion of between 5 and 10 years. I doubt I will be selling within that timeframe and from what I remember, your very similar. We have both bought large family homes at decent discounts and are happy to remain in them until our kids leave and we start to rattle around in them .

That timeframe for me is about 15 to 20 years, which is outside even the most conservative claims for recovery to 2007 prices. To be honest, I can easily imagine seeing two more housing booms before I buy my retirement cottage. I also dont believe that anyone in any authority, whether in government or banking has learned a thing from the last housing boom and subsequent crash. Bankers are back to paying themselves huge bonuses and governments always prefer to have voters who feel rich wih positive equity rather than poor with negative.

Once we get out of our current mess, everything will be back to business as usual. In the words of Homer Simpson, "Marge, I [we] havent learned a thing".

There is a difference between reaching peak prices and REAL adjusted peak prices. OK, I would not say never, but I dont think we will be seeing it any time this century, unless they discover the UK is sat on an oil, gold or diamond reserve!

How is the renovation going? about to finish the wiring, the plumber and plasterer are booked over the next month and I have finished insulating out the 200mm solid stone walls upstairs. I am oping to get solar hot water next year, by all accounts, the government are about to start a FIT scheme for solar hot water, which is pretty awesome, paying 18p per KWh. should make me about 300 a year I reckon!

abaxas

RenovationMan wrote: »

...and by 2018, the whole sorry mess will (hopefully) be just a memory and there will be no political incentive to push for such strict regulation. Even now in the midst of the mess I believe that they are watering down a lot of the harsher policies.

The day the first 100% mortgage appears from a mainstream bank is the day that we realise that nothing much really changes.

The issue is not with the high street lenders, it is with the specialist lenders who no longer exist.

There will come a time when they return but for now the bottom 10-20% of the market is simply not there. Not because banks dont want to lend, but because these operations simply don't exist any more.

You cant buy a product from a business that doesnt exist.

Thrugelmir

RenovationMan wrote: »

...and by 2018, the whole sorry mess will (hopefully) be just a memory and there will be no political incentive to push for such strict regulation. Even now in the midst of the mess I believe that they are watering down a lot of the harsher policies.

The day the first 100% mortgage appears from a mainstream bank is the day that we realise that nothing much really changes.

The financial "mess" is very much in everyone's minds. European banks are going to be stress tested this year (like last year) albeit with different and slightly stricter criteria. The fiscal adjustment can only be made slowly but its happening.

Nothing wrong with 100% mortgages. Providing the risk is proportionate to the overall lending book of the lender.
The downside for lenders is that they'll be required to hold over 6 times the capital reserve of funding a 60% LTV mortgage. So to compensate the interest rate charged will have to be higher to maintain profitability. The alternative is to lend more customers who have higher equity/deposits.

geneer

RenovationMan wrote: »

The 'housing ladder' I refer to is the process by which a person buys a starter home either alone or with a partner, they then buy a larger house in order to start a family, they then might buy a still larger house because they have more kids or because their kids grow into overlarge teenagers, they might buy a couple more larger houses dependant upon their financial and personal circumstances and then once the kids leave home and they get close to retirement, they sell the family home and move back into the sort of house they started with (releasing a lot of capital that is largely tax free).

Fascinating. And in relation to my point, its just an accumulation of debt. They would still have been better off had the housing market got loopy.

RenovationMan wrote: »

My point was that a friend gambled that he would be able to sit backj and laugh at all us 'debt junkies' when we failed. We didnt fail - he did (by his own judgement, not mine).

How do you fail at "gambling" renovationlad.
Surely its just dumb luck? You seem to crowing awfully loud for some one who did nothing more than elect to run with the rest of the herd.

Gotta wonder how embittered your imaginary friend is of course.
I mean, your the one on a website full of faceless entities wanting them to be impressed at your "Victory". :rotfl:

RenovationMan wrote: »

My point was that a friend gambled that he would be able to sit backj and laugh at all us 'debt junkies' when we failed. We didnt fail - he did (by his own judgement, not mine).

I dont know what your fixation with 'boomers' is because I'm talking about people born in the late 60's early 70's .

Thats funny. So was I. A scenario you don't appear to have much to say about.

mbga9pgf

RenovationMan wrote: »

If we had not seen the 2009 partial recovery I would agree with you, but it just showed that the Uk populace has not lost any of their mania for home ownership. The fallback now is more to do with the inability to get a mortgage than the lack of desire to buy a house.

p.s. How are your OPs going? I'm looking forward to June where my mortgage window opens again and I'm allowed to overpay another 10%. My renovations are coming to an end (well the current batch are, anyway) and I'm looking forward to a couple of years of hard saving and hard overpaying.

We have paid off 15K in around 8 months, renovations costing a fortune, though once they are done they are done. Wife is working for 1 more year and has just got a 25% pay rise. Combine that with the rent a room scheme lodger we are getting in, we should be able to get the mortgage down to under 3 times single salary in about 20 months time, factored for swap rate future level interest rate rises.

We currently arent overpaying, although we are saving everything we dont spend as a buffer. Even with 6% rates in 4 years time, we remain cash flow positive on single salary assuming our current standard of living, this is assuming 1K overpayments at the same time.

Just glad we slogged it for 4 years during the crazy boom years and saved 100K. Once the renovations are complete, I am tempted to get a surveyor valuation for sh*ts, giggles and piece of mind. I reckon I have saved at least 15-20K by doing much of the work myself at current trade prices, electrical work in particular.

mbga9pgf

Yeah. I was doing it manually then bought one of these:

http://www.screwfix.com/prods/25831/Power-Tools/SDS-Drills/Bosch-GBH-2400-2kg-SDS-Plus-Hammer-Drill-240V

And a set of these:

http://www.screwfix.com/prods/45394/Drill-Bits/SDS-Plus/SDS-Plus-Sets/SDS-Plus-Combi-Bit-Set-17-Pc

Check it out:

http://www.youtube.com/watch?v=d5fL-jgNVsM

Much better than angle grinder believe me. I had 1cm of dust over EVERYTHING after I chased in last time with it.

Graham_Devon

RenovationMan wrote: »

It sounds like your getting the right side of your renovations too so congrats on that. I'm in the process of replacing the electrical wiring, an easy but painful job (painful in that I have the missus moaning about the floors being up and the dust caused by channeling cable into the walls!)

LOL, do what I saw once....rewire the house with trunking

Never seen anything like it. The bloke who did it in his house was so proud of himself though!

Every light socket, every mains socket, every other switched socket, trunking running to it, running into larger trunking, which seemed to be used as cornice in the corner of the ceiling

ukcarper

abaxas wrote: »

The return of the building plot, where areas as desgined with roads and utilities and a rough specification of housing. People then buy the plot and build their own home.

Lets plan the future.

Nice idea but I can’t see it happening. Where would the land come from and who would pay for the initial infrastructure.