How long before the inevitable nominal fall of 35% in houseprices

IveSeenTheLight

paulmapp8306 wrote: »

ive seen prices slowly drift in the last 4 years (started looking when I was posted to Belfast - and kept looking as I got closer to my end date).

As I understand it, you may have a good chance of getting a bargain in Belfast.

Emy1501

StevieJ wrote: »

House prices fell because the banks dramatically reduced lending to first time buyers (in fact all buyers), nothing to do with interest rates.

100% mortgages were still around well into 2008 and at least 6 months after the falls begun. The problem for me started when subprime borrowers on teaser rates found when they came to remortgage people didn't want to touch them and they found themselves looking at rates of 3-5% higher than what they were paying. It was the same with BTL. The Wilson's would have been a prime example. As they said they would have stuffed if rates had not come down as they and others had been able to take out fixed rates for 4-5% pre crunch but when they came to remortgage all they could get was SVR which was closer to 8%.

If it was down to FTB's then prices would never have fallen as people would have just done what they are doing now and refused to sell unless the price was right. Forced sellers forced the prices down in late 2007-2008. It too much of a coincidence that prices stopped falling as rates hit rock bottom.

Pimperne1

Emy1501 wrote: »

100% mortgages were still around well into 2008 and at least 6 months after the falls begun. The problem for me started when subprime borrowers on teaser rates found when they came to remortgage people didn't want to touch them and they found themselves looking at rates of 3-5% higher than what they were paying. It was the same with BTL. The Wilson's would have been a prime example. As they said they would have stuffed if rates had not come down as they and others had been able to take out fixed rates for 4-5% pre crunch but when they came to remortgage all they could get was SVR which was closer to 8%.

If it was down to FTB's then prices would never have fallen as people would have just done what they are doing now and refused to sell unless the price was right. Forced sellers forced the prices down in late 2007-2008. It too much of a coincidence that prices stopped falling as rates hit rock bottom.

How does that work then? Say rates bottomed out in Mar 09 that could only immediately affect those with tracker mortgages, indeed there is an argument that those who are not on trackers are still paying something similar to what they would have been paying had rates stayed at 4%ish.

StevieJ

Emy1501 wrote: »

100% mortgages were still around well into 2008 and at least 6 months after the falls begun. The problem for me started when subprime borrowers on teaser rates found when they came to remortgage people didn't want to touch them and they found themselves looking at rates of 3-5% higher than what they were paying.

.

We didn't have teaser rates, we had market rates at the time. I think you are confused with US sub-prime where teaser rates were linked to outrageous mortgage placements with NINJA purchasers. Mortgage liquidity started drying up in the summer of 2007, why do you think Northern Rock hit the buffers in Sept 2007, it was called a credit crunch for very good reason.

Emy1501

Pimperne1 wrote: »

How does that work then? Say rates bottomed out in Mar 09 that could only immediately affect those with tracker mortgages, indeed there is an argument that those who are not on trackers are still paying something similar to what they would have been paying had rates stayed at 4%ish.

As I said above those who could not remortgage were on SVR's. If use mortgage express as an example people would have seen their rate go from something like 7.75 to 2.5 in a matter of months on. People would have found themselves anything up to 7.5k a year better off.

Emy1501

StevieJ wrote: »

We didn't have teaser rates, we had market rates at the time. I think you are confused with US sub-prime where teaser rates were linked to outrageous mortgage placements with NINJA purchasers. Mortgage liquidity started drying up in the summer of 2007, why do you think Northern Rock hit the buffers in Sept 2007, it was called a credit crunch for very good reason.

In 2005 I got a fixed rate for 4.25 the svr in 2007 was 7.75. People didn't look at the SVR at the time as thought was you would take out fixed rate 2 years later. For those with subprime 90% BTL's this was not possible. All of a sudden those with a 150k mortgage needed to find another 4.5k a year enough to cause some to force sell

StevieJ

Emy1501 wrote: »

In 2005 I got a fixed rate for 4.25 the svr in 2007 was 7.75. People didn't look at the SVR at the time as thought was you would take out fixed rate 2 years later. For those with subprime 90% BTL's this was not possible. All of a sudden those with a 150k mortgage needed to find another 4.5k a year enough to cause some to force sell

In 2005 I got a tracker of BR+0.25 for two years (2005 = 4.75%) and then BR+0.95% for the life of the mortgage, I obviously had more foresight than you

Pimperne1

Emy1501 wrote: »

As I said above those who could not remortgage were on SVR's. If use mortgage express as an example people would have seen their rate go from something like 7.75 to 2.5 in a matter of months on. People would have found themselves anything up to 7.5k a year better off.

Well that response kind of lacks the immediacy of your previous post. Those coming off of fixes didn't all come off at the same time so the "co-incidence" of house prices stopping falling when interest rates reached 0.5% doesn't really fit in. Don't know about anyone else but I have a couple of SVRs which are around 6% (but I do accept that Mortgage Express have a surprisingly low SVR tied to the Base Rate).

So, two problems with your bottoming of interest rates suspending house price falls, firstly we weren't all with ME and many of those who were with ME didn't come off their less attractive long term fixes till well after base rates reaching 0.5%.

Emy1501

Pimperne1 wrote: »

Well that response kind of lacks the immediacy of your previous post. Those coming off of fixes didn't all come off at the same time so the "co-incidence" of house prices stopping falling when interest rates reached 0.5% doesn't really fit in. Don't know about anyone else but I have a couple of SVRs which are around 6% (but I do accept that Mortgage Express have a surprisingly low SVR tied to the Base Rate).

So, two problems with your bottoming of interest rates suspending house price falls, firstly we weren't all with ME and many of those who were with ME didn't come off their less attractive long term fixes till well after base rates reaching 0.5%.

Wasn't only ME though. It was lloyds, NW, Bristol and west etc. Anyone on SVR between 2007 and end of 2008 would have seen a fall and many by the full 5.25. You only need a few % of people to force sell to have an effect on the Market. If people did not need to sell in 2008 they would not have.

Emy1501

StevieJ wrote: »

In 2005 I got a tracker of BR+0.25 for two years (2005 = 4.75%) and then BR+0.95% for the life of the mortgage, I obviously had more foresight than you

I never suggested that I have more foresight than you. Not really sure the relevance either.