A very very very bad day for the housing market

kingkano

Are the only choices 'crash' and 'continued boom'?

ds1980

lypsey wrote: »

CB
I have attached a very old BBC interest rate chart because I couldn't quickly find a current one that goes back past 2004

http://news.bbc.co.uk/1/hi/programmes/newsnight/3693789.stm

Anyway people like you who have nothing to say apart from "your wrong" always say the last housing crash was caused by a doubling of interest rates to 15% back in the 1990's
You will notice from the graph that rates were from late 2001 to Jan 2003 were 4% then they were 3.75 and below to mid 2004. Therefore if interest rates go to 6% the best case senario is an increased mortgage of 50% and worst case senario is a 71% increase in payments. I very much doubt if even a clever person like you has had wage inflation of 70% over the last 3 years
Now do a calculation on what happens if interest rates go to 7%

You also have to remember that according to Halifax etc etc the average house price is 200k , the average wage is 23.5k that means the average mortgage today is over 8.5 times salary. This has NEVER happened before and it cannot be supported long term

One final point and he is far far richer and much cleverer than you and me . Warren Buffet always says " I can never sell at the top or buy at the bottom but if I do so somewhere in between I am very happy". Before you come back with one of your statements that I am a F&&&wit then try and use some of your grey matter and come back with something of relevance

One passing point is take a look at the oil price today and come up with something interesting as to why this won't have a MASSIVE effect on inflation.

The 8.5 x salary is a load of tripe. How many people on 23.5k buy a £200 k house. The ones that do have someone else on say 23.5k making payments 4.25 times their salaries combined which isn't the end of the world.

irnbru_2

CB1979 wrote: »

1) more divorces = 2 homes needed where previously 1

Are you sure ?

Generali

CB1979 wrote: »

i don't think I ever said it was sustainable???

just didn't say it was happening now.

but most IMPORTANTLY NOBODY knows when!

Agreed. If you could predict the timing of a US style drop off in prices, you'd be drinking a nice rum cocktail in the Carribean or something, not posting on here.

phlash

CB1979 wrote: »

@ phlash - as said I don't need to back it up, cos it's not happened!

yes the signs are there that things are more LIKELY to have an affect on house prices, but as of yet I haven't seen any DEFINATE affect????

for every piece of HPC "news" there is, no doubt I'll be able to go and find something to go against it and vice versa.

but do we really need an update everyday about different articles from different media?

we know it's pretty much a dead cert that IRs will rise in the next couple of months, but will that have an affect on the House Prices? who knows, we can all guess but no one knows

What do you mean "we know it's pretty much a dead cert that IRs will rise in the next couple of months, but will that have an affect on the House Prices?"

The strong correlation between the two is undeniable.

What you said is like saying, 'we know it's pretty much a dead cert that temperatures will rise in the next couple of months, but will that have an affect on the thermometer?

Of course, everyone knows that a rise in temperature will cause a rise in the reading on a thermometer, but for some reason the strong correlation between interest rates and house prices is not so obvious.

The correlation between the two is why the MPC discuss House Price Inflation when making a decision about interest rate rises isn't it? Or maybe, its just because they want to share decorating tips.

lypsey

CB , You say "but do we really need an update everyday about different articles from different media?".
Its strange , I had an idea this was a chat forumn , normally that means I am entitled to my view in exactly the same way as you are. That also means I can air things that are of interest to me and some other people on the board. If you don't like it I am not making you read it am I ??

sortofok

Well said lypers :beer:

irnbru_2

hearts wrote: »

Since the doom mongers have been spreading this "word" prices have probably risen by 30% now asuming we see a fall of 20% (which we won't) then the buyer then is still ok.

Yes by 4%.

ds1980

my house has gone up 30% in a month yippee!!!!!!! paid £240k now worth £320k interest [party is coming around tonight and ive not even finished it yet!

Woby_Tide

lypsey wrote: »

CB
I have attached a very old BBC interest rate chart because I couldn't quickly find a current one that goes back past 2004

http://news.bbc.co.uk/1/hi/programmes/newsnight/3693789.stm

Anyway people like you who have nothing to say apart from "your wrong" always say the last housing crash was caused by a doubling of interest rates to 15% back in the 1990's
You will notice from the graph that rates were from late 2001 to Jan 2003 were 4% then they were 3.75 and below to mid 2004. Therefore if interest rates go to 6% the best case senario is an increased mortgage of 50% and worst case senario is a 71% increase in payments....

on an interest only mortgage