LAND REGISTRY data finally shows FALLS in House Prices

phlash

keeperbear wrote: »

What rubbish! Why the heck does a higher interest rate automatically cause a person to sell or go into bankruptcy?

In your scenario 2, a 100% mortgaged borrower could remortgage to a better deal as they have built up sufficient equity to do so.

In scenario 4, if house prices fall considerably the BoE would have to reduce interest rates to save the economy. As a 100% borrower, I don't care what my property value is as long it it provides me with a home.

In scenario 2 they could indeed remortgage to a 'better' deal, and get a 'discounted' 0.5% on their rate. But what good is that if rates have increased by 3%?? So yes, they still would have to sell up.

In answer to your scenario 4 answer: House Prices are not part of the BoE's remit, Inflation is.

I cannot believe that you are suggesting that scenario's 2 and 4 could not play out. You have a more blinkered view than I first thought. Like watching Location, Location, Location? I'm guessing you'll be happy to hear that a new series is coming to a screen near you!:rolleyes:

EDIT: I'm off for the weekend, but I'll look up this thread when I'm back. It might still be on the first page with the way its going!

wolvoman

keeperbear wrote: »

Demand for property currently outstrips supply.

The bolding is particularly important here. Even in London the demand/supply issue is not for places to live, it is for places to buy. There is a key difference here.

keeperbear wrote: »

World stock markets are also overvalued, but no one is predicting a 40% drop in share prices.

Did you just make this up? In London the FTSE100 is still below its all time peak from 1999 and corporate earnings are far in excess of what they were then.

keeperbear wrote: »

As soon as property drops by 10%-15% investors will be snapping it up in certain areas of the country. I know I will!.

Perhaps, but the volume will be tiny. Private investors simply won't be able to get mortgages to fund buy-to-lets as banks will impose severe lending criteria during a declining market.

dannyboycey

keeperbear wrote: »

As soon as property drops by 10%-15% investors will be snapping it up in certain areas of the country. I know I will!

This will be short lived. There will be a dip, then a minor peak as people try to get their hands on a bargain, before prices plummet further. This happened in the last crash.