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House Price Crash 6
Comments
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When are people going to understand that by re-mortgaging to "free up cash" you aren't making money, you are BORROWING0
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Dead_Eye_Jones wrote: »FTBs need to know that they will be competing for these bargins against Investors who have hung back, City bonus spenders, and people like me who will fancy riding the next wave with a few BTLs. Im not so sure people will have any better access to property, even if they cost less.
The financially savvy do not buy when the market is cheap but they buy when it has started rising again. This cycle could take 10-15 years. In fact the numbers are arbitrary because nobody knows!0 -
dannyboycey wrote: »I think that they are realising that they are in deep trouble financially and need to free up cash either to pay their own debts or to stupidly fund their childrens housing deposits. Nobody is simple enough to use their property money to fund a week in Benidorm.... are they?
But if they MEW to pay off their credit card, they're just doing it after the fact. It's exactly the same thing.0 -
Remember that during each housing price fall in the past, the actual number of house transactions did NOT rise. The reason prices fell was because EVERYONE felt physically reluctant to buy at that time and this would include the people who had been 'waiting' for that price crash.
This time you've got the complication of all those BTL LLs. If there is a crash, we'll see how many really are in it for the long haul.0 -
Nobody is simple enough to use their property money to fund a week in Benidorm.... are they?
Around here I'd guess that's where all the Mercs and big SUVs have sprung from... so I wouldn't be at all surprised if they're MEW-ing for holidays as well.
I'm always amused when I'm at the laundrette and someone drives up in a 30,000 pound car to use the tumble dryers because they don't have space for one in their 'executive' ex-council two-bed terrace.0 -
I don't think people MEW to buy a week in Benidorm but they do when the 0% tart rate ends0
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dannyboycey wrote: »Nobody is simple enough to use their property money to fund a week in Benidorm.... are they?
Holidays in the Caribbean
New cars
Plasma screen TV's
Plastic surgery
School fees
People will MEW for just about anything..........and they'll MEW to keep up with the Jones who are MEWing to keep up with the Smiths............0 -
By the way, there are 3 types of people in this world: Those who can count and those who can't0
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Remember that during each housing price fall in the past, the actual number of house transactions did NOT rise.
That's a very good point.
I lurk on a US forum (unrelated to property), and the housing discussions they had last year are identical to the ones we're still having.
It's hilarious.
Now, all the discussions are along the lines "yes, the market is tanking, but not in MY state", or "of course some people are being repossessed because they shouldn't have taken out home loans in the first place!", and more recently "friends are starting to be turned down for loans because of their poor credit rating".
If the mortgage market tanks in the States, it'll spread here. And once credit tightens, THAT's when you'll get the mother of all crashes.
But it won't happen till then - which will blow to smithereens the arguments that "UK prices can't crash because there aren't enough homes" or "when the market falls people will simply snap up the bargains".
They won't because there won't be the bank credit available.
A home is only worth what these global banks are prepared to lend you on it.0 -
meanmachine wrote: »"when the market falls people will simply snap up the bargains".
They won't because there won't be the bank credit available.
A home is only worth what these global banks are prepared to lend you on it.
That is absolutely correct. If you can't afford a 3 bed detached now, you still wont when the crash happens for this reason. People often wrongly assume that it's a good idea to buy when the market has fallen/falling. It's not. It makes sense to buy when the market is on the up and prices are rising.
If a lender will give you 5 times your salary now, they sure as hell wont if the market crashes.0
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