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Debate House Prices
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new lending crackdown means lower UK house prices
Comments
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Thrugelmir wrote: »Cash always returns to the banks.
The asset its used to purchase, is only as valuable as the cash someone will hand over to acquire it.
Well currency always chases certain asset classes. As everyone piled into property it sucked currency away from other areas. As people pile into other things and get out of property because they think its overvalued then currency gets drawn away from one sector and into another until that becomes overvalued. The public always chases yesterdays news.
Everything goes from overvalued to undervalued then back again.It does not matter how many people would like to live in a property all that matters is who can afford it.0 -
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People seem to be underestimating the role of the FSA in all this. Thier wonderful 'thematic reviews' on interest only lending, has a lot to do with the lenders tightening things up.
I've yesterday had an example yet again of the lack of latteral thinking where I/O is concerned.
A 45 y/o Woman is buying out the matrimonial home so that her children remain undisturbed as far as poss, and they retain the settled home setting.
Her budget currently extends to I/O. There is about 45% equity.
She cannot afford captial repayment right now.
Someone like her faces having to sell up a settled family home and trade down. Tough I guess, but what an unecessary upheaval.
In the past she would have simply bought her ex out, and no doubt in time had a pay rise / kids leave home / meet a new bloke and all would be well, but oh no, not now, nanny knows best.0 -
People seem to be underestimating the role of the FSA in all this. Thier wonderful 'thematic reviews' on interest only lending, has a lot to do with the lenders tightening things up.
Lenders would have tightened up in any event. Banks wish to control the situation. To unwind their own positions as they wish to. Not be dictated to which, in the short term , could cause them funding problems for example.
There's a huge exercise of letting the air of the balloon slowly going on. As that's the only way of returning to ground safely. This will take some years to achieve.0 -
In the past she would have simply bought her ex out, and no doubt in time had a pay rise / kids leave home / meet a new bloke and all would be well, but oh no, not now, nanny knows best.
Life is so simple for you Conrad.
What happens when none of your assumptions actually happen?0
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