First time buyers priced out...

wotsthat

geneer wrote: »

Lets all agree to call the crash a teapot.
Cos if its a teapot, then clearly theres been no crash.
So the bulls win.
Yawn.

Those tablets are taking longer and longer to kick in.

IveSeenTheLight

shortchanged wrote: »

Where do you see me saying that?

I stated that a lack of 1st time buyers will eventually have a downward impact on house prices, something that julieq seems to dispute.

Dearie me, I even quoted you on the last post

shortchanged wrote: »

there is going to be less incentive to pay higher prices for property.

At the time we were talking about how house prices could be sustained without FTBers

IveSeenTheLight

wotsthat wrote: »

I'll help Graham a little more. In January 2009 I was paying 5.49% on my mortgage which equated to £2550 interest per year. If my rate goes to 5.49% tomorrow this would equate to £1600 interest per year.

If I could afford that rate in 2009 why won't I be able to afford it tomorrow?

Your doing well, ahead of me.
as we can agree mortgage interest is equivalent to renting, effectively: -

• You were paying £212.5 rent per month in 2009
• If you were to return to 5.49% rates you would be paying £133.33 per month

It should also be noted that actually, the monthly mortgage interest / rent reduces marginally each months assuming rates stay the same.

Thrugelmir

julieq wrote: »

And nationalising NR had no effect one way or another on repossessions. How could it? If NR had failed, it would have failed as a deposit/savings bank due to liquidity issues, not bad debt. Had it failed, the mortgage book would have been sold on. The debt is still being repaid and the "bad bank" is running at a profit.

Add the new Northern Rock to NRAM and the nationalised operation is still making a loss.

The combined mortgage debt books of NRAM still has 850,000 borrowers and £110 billion of outstanding lending. So in the market who would buy this poor quality debt?

Only £6.4 billion was redeemed in 2010 ( £9.9 billion in 2009). So there's long way to go to repay the mortgage book. Particularly as the majority of B&B debt is for BTL borrowers on interest only mortgages.

chucky

shortchanged wrote: »

Well I am actually referring to downward pressure on property prices from a lack of FTB's which julieq seems to dispute.

FTB's are being locked out because of the amount of money being lent at the higher LTVs and also the the rates of these mortgages. once this increases there will be more FTBs.

if you believe that the banks will not be lending to higher LTVs in the future then you would have downward pressure.

Graham_Devon

IveSeenTheLight wrote: »

Indeed it does.
You've just wiped out the impact on 20 million properties.

It really doesn't matter. Julie was talking about mortgages and interest rates. I.e. only looking at mortgages.

Doesn't matter whether the total amount of mortgages is 100 or 100 billion.

The effect will be the same, regardless of the total number of mortgages.

Quite right that I mistook total households for total mortgages. But the point I was making doesn't really change. It's still based on total mortgages.

Graham_Devon

wotsthat wrote: »

I'll help Graham a little more. In January 2009 I was paying 5.49% on my mortgage which equated to £2550 interest per year. If my rate goes to 5.49% tomorrow this would equate to £1600 interest per year.

If I could afford that rate in 2009 why won't I be able to afford it tomorrow?

So you now speak for the country as a whole?

Were talking the total mortgaged properties. Not one of them. That one being you with a massive mortgage round your neck it seems.

wotsthat

Graham_Devon wrote: »

So you now speak for the country as a whole?

Were talking the total mortgaged properties. Not one of them. That one being you with a massive mortgage round your neck it seems.

No I'm not speaking for the country as a whole. Just a little example for the hard of understanding that if debt is reducing and if interest rates increase the effect will be limited. In fact, that sounds like the conclusion of the ISER study which said the impact of interest rates would be limited. You remember that don't you Graham? It's the one that you didn't want to talk about because Shelter managed to find 60 people for whom interest rate rises would be a matter of life and death.

Massive mortgage around my neck - having a laugh aren't you? Those interest figures are per year and I inflated the second figure to take into account the large overpayments I've made. With a good wind I won't have a mortgage in 18 months. Thanks for your concern though.

shortchanged_2

IveSeenTheLight wrote: »

Dearie me, I even quoted you on the last post



At the time we were talking about how house prices could be sustained without FTBers

Talk about being pedantic. If I'm saying there is less incentive to pay higher prices.....that equates to me saying that I don't feel that current levels of house prices are sustainable with a major shortage of FTB's currently around.

chucky

Graham_Devon wrote: »

But the point I was making doesn't really change.

what was your point?