how many REALLY think there'll be a crash rather than a stabilisation ?

dannyboycey

sheraz2 wrote: »

I know you say that in jest, but this is not actually true.

The UK economy has never ever been as stable as it has been in the past few years. This economy is awash with money and wealth.

Britain is awash with debt, and it's this debt that is currently acting as a 'prop' in the final stage of the cycle. It's also characterised by a feeling of getting on the market at any cost before you miss the boat. Just as in cycles (or bubbles) that have gone before and just like the ones in other countries.

granville_2

sheraz2 wrote: »

I know you say that in jest, but this is not actually true.

The UK economy has never ever been as stable as it has been in the past few years. This economy is awash with money and wealth. It's never been like this before as well. high houseprices are a side effect of Britains booming wealth and things would be alot worse is property prices didn't go up.

Only problem being that houses are a basic social need and those that can't afford them are a growing social problem and social cost of the country's wealth.

Consumer spending is only reported by the media because it's what the layman on the street can understand, this is only one of the smaller factors that are indicators of the economy itself. Britians booming mate. If you think times are bad now, just wait till we come down.

Nope, Britain has been gorging on cheap credit. It is an illusion of wealth, brilliant if you can get away with it.

As someone once commented, Gordon Brown has been a brilliant chancellor. He's convinced us we're all getting richer whilst actually getting into more debt.

Snow_Dog

DT is our resident loopy, I guess as fast as th mods/IT block his user names he starts up a new one.

I appear to have an unread PM which i'm not even going to bother to open presuming its along the same lines as his posts and previous PMs.

dannyboycey

Derek_Taylor wrote: »

I CAN TAKE 6 INCHES OF BROLLY HANDLE UP MY ARRSE

Do you want a medal bucket bum?

I think you're in the wrong forum. There are plenty of adult sites for kinky self abuse (or so I've heard)

wecanhelpu

Derek_Taylor wrote: »

I CAN TAKE 6 INCHES OF BROLLY HANDLE UP MY ARRSE

:rotfl::rotfl::rotfl:

Easily your best post so far.

albacore1854

No idea.

Lets say people borrowed 100K at 4%, that would give them earnings of say 30K £1800 month after tax, and a payment of £333 a month.

With rates now at 5.75 odds are the best renewal would be 6% or a payment of £500 a month.

At what point do they run out of credit and get repo'd. Just don't see how the rate rise to the current level brings on a slump.

phlash

sheraz2 where have you gone? I've been away for lunch, and expected to come back to a reasoned argument. What I often hate about this site, is that people will say alot but you ask them for more detail or pose a question because you are genuinely interested in how they formulated their opinion, and they never provide. Whether thats because they can or can't I don't know, but it seems to typically come from the bullish side of the debate.

I have to say that MSE seems alot more bearish than I have seen it in the past. The bears seem to be able to provide mountains of information and to analyse this and provide useful conclusions. The bull argument back is often unfounded or comes in the form personal attack on a bearish mindset. "Why do you want the housing market to crash?" being a typical response to well thought out logical conclusions based on economic principles.

Is all I'm after is some sensible suggestions and debate from the bull's side. Sometimes I think I could put together a better bull argument than any who claim the housing market is solid and set to continue to rise.

It's just not debate!

phlash

albacore1854 wrote: »

No idea.

Lets say people borrowed 100K at 4%, that would give them earnings of say 30K £1800 month after tax, and a payment of £333 a month.

With rates now at 5.75 odds are the best renewal would be 6% or a payment of £500 a month.

At what point do they run out of credit and get repo'd. Just don't see how the rate rise to the current level brings on a slump.

I like fact you used an Interest Only example? Do these people in your example have a plan with which to pay off their debt?

A repayment mortgage using your example would be £533 at 4% and £652 at 6%.

Take home pay on £30,000 is about £1,600 not £1,800:
Gross: £2500
Tax: £431.91
National Insurance: £227.33
Student Loan: £112.50
Pension @ 5% contributions: £125
Take Home: £1603.26

Correct me if I'm wrong, but I think there are people with far more than £100,000 of mortgage. My 2-bed flat sold for £155,000, supposedly its a prime FTB property, meaning the mortgage would be nearer £140,000. With that their repayments would go from £746.80 to £912.64. Now, that is looking tight!

pickles110564

phlash wrote: »

Money supply growth at >10%, and so has house price inflation.
Please answer me, if people are getting more wealthy and not more indebted, how come the figures don't show this?

You do realise the level of personal debt has gone past the £1 Trillion barrier?

You are 100% correct, it was not so long ago in our local rag that you might see the odd one or two cases of people going bust, but just lately anything up to 20 cases.
I believe there will have to be a major correction soon because I have friends already struggling to pay for repair bills to their cars.

albacore1854

Thanks Phlash.
But I'd really like to understand how the credit withdrawal will work.

No one is going to stand by and loose their home, they would use loans/shift cards about etc. Realistically how long could they hold out for.