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how many REALLY think there'll be a crash rather than a stabilisation ?
Comments
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Carpetbelly, the 15% interest rate argument holds no water, and has been put to death on several occasions on many different sites. Sit down with a calculator for a couple of minutes, and work out why.
I never said we needed to get to interest rates upto 15% to cause an issue for people on variable rates. Obviously with the sums of money people are lending 2% would cause a nice dent into people's disposable income.0 -
carpetbelly wrote: »You really think interest rates will carry on like that?
The amount of money you can borrow depends on more factors than just interest rates. Yes, if you want the same monthly repayment then yes, you cannot get the same amount but then increase the term? Do something inventive, speak to the lender, there are plenty of options now adays to make things affordable even for those sums of money.
Do you not think the fall out from American CDOs is going to lead to a credit crunch as lenders elsewhere get a bit twitchy about lending to people who can't afford to pay back what they are borrowing?
& remember what's affordable at 5.75% probably isn't affordable at 7%...
Borrower: My three-year, fixed-rate, interest-only mortgage is coming to an end. I'd like to remortgage onto you're BoE+0.5% tracker please.
Lender: Now let's see... hmmm, you've not paid anything off over the past three years.
Borrower: Yes, that's correct - interest only innit?
Lender: Hmmm, house prices in your area have dropped 10%.
Borrower: Oh? Really, well that's not a problem I'm not planning to move.
Lender: Well actually it is a problem, you see you can't remortgage onto our current three-year, fixed-rate, interest-only mortgage, because your house isn't worth enough.
Borrower: Oh? Really, what happens now.
Lender: Well you will move onto our standard variable rate of BoE+1.5%.
Borrower: Ah!"Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
Not really... Judging by your responses you know what's out in the market currently and I'm sure you'll make yourself aware of what else comes to the market when it does.Would you like to clarify how much more inventive the lending market could get???
As I said, I work for a bank and you'd be surprised the ideas in the pipeline for new products.That stage has been and gone, they've been propping up the market with inventive schemes for too long now, there's not much trickery left!
yep, read those ones myself as well. Isn't the BBC great :beer:Worst Mortgage burden in history: http://news.bbc.co.uk/1/hi/business/6287982.stm
Sub-Prime lending growing:
http://news.bbc.co.uk/1/hi/business/6288738.stm
(Just some recent stories plucked from BBC, not even hard to find)
Yes, it's the 'worst mortgage burden in history' but its still all affordable. That's the key point at the moment.
Yes, but then even going from the article you quoted on the BBC by 2011 it will still be less that 10% of the total mortgage market. Also, our credit controls are far tighter than in the US for the subprime market especially.We all know what sub-prime has done/is doing to the American market.
That was actually an interesting read, thanks for that.Out of interest, read this little gem as well:
http://www.thisismoney.co.uk/investing/article.html?in_article_id=422221&in_page_id=1660 -
carpetbelly wrote: »I never said we needed to get to interest rates upto 15% to cause an issue for people on variable rates. Obviously with the sums of money people are lending 2% would cause a nice dent into people's disposable income.
a) Interest rate rises do not just affect the people on variable rates, see:
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/06/03/nmort03.xml
b) It's not just the affect to current homeowner's ability to repay the loan, it is also tha fact that new buyers cannot borrow as much. Increased numbers of people interested to sell due to lack of affordability mixed in with buyers with less money equates to falls in house prices. Quite simple really.I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.
That also means I cannot share in any profits from any decisions made!;)0 -
Yes, you're right. Sorry, I forgot to add that it will also affect people who are currently coming to the end of fixed deals etc. Shall I compile a full comprehensive list of every one who will be affected next time? :rolleyes:a) Interest rate rises do not just affect the people on variable rates, see:
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/06/03/nmort03.xml
Actually, going by one of my previous posts new buyers still can borrow as much they will just have to be more inventive on how they do it.b) It's not just the affect to current homeowner's ability to repay the loan, it is also tha fact that new buyers cannot borrow as much. Increased numbers of people interested to sell due to lack of affordability mixed in with buyers with less money equates to falls in house prices. Quite simple really.
I still stand by my opinion, and yes, that's all it is, my opinion, that prices will correct, might fall a little but nothing that would constitute a crash by any means. I then believe that prices will just go back up again but at a much reduced rate and I still firmly believe they will surpass current prices after the correction within 10yrs easily.0 -
carpetbelly wrote: »Not really... Judging by your responses you know what's out in the market currently and I'm sure you'll make yourself aware of what else comes to the market when it does.
As I said, I work for a bank and you'd be surprised the ideas in the pipeline for new products.
yep, read those ones myself as well. Isn't the BBC great :beer:
Yes, it's the 'worst mortgage burden in history' but its still all affordable. That's the key point at the moment.
Yes, but then even going from the article you quoted on the BBC by 2011 it will still be less that 10% of the total mortgage market. Also, our credit controls are far tighter than in the US for the subprime market especially.
That was actually an interesting read, thanks for that.
Really useful.
a) You work in a bank
b) Trust you, because everything will be alright
1) I don't trust banks; Bank charges, HSBC Graduate Overdraft, bully boy tactics.
2) No, because nothing you have contributed has ever been backed up by any decent references or reasoning. It's pure speculation, much like how the housing market has got to the levels that it has.
In fact, you are sounding more and more like a VI.I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.
That also means I cannot share in any profits from any decisions made!;)0 -
You know you're in trouble when banks start wheeling out ever more exotic mortgages."Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
a. yes I do...Really useful.
a) You work in a bank
b) Trust you, because everything will be alright
b. where did I ever say anything remotely like that? I've done nothing but ever offer anything but my opinion and thoughts. This is not a thread asking for help, it's a thread asking for peoples opinions.1) I don't trust banks; Bank charges, HSBC Graduate Overdraft, bully boy tactics.
2) No, because nothing you have contributed has ever been backed up by any decent references or reasoning. It's pure speculation, much like how the housing market has got to the levels that it has.
In fact, you are sounding more and more like a VI.
1. you dont trust banks. Wow, show me one person that does? I double check everything that I get from my bank as should everyone.
2. And the only references you've given have been from two different websites. And if I didnt have to go home now I'd quite happily go through both those websites where there are economists that share my view and have written articles to that effect.
Vested Interests. Not really. I'm happy in my new first time bought house. it's fine for me for many years to come. I can afford it, even if rates continued to go up (to a point).
Id love to have not bought and had house prices drop, but I personally dont see it. I'd love them to drop so a lot of my friends in jobs that arent as well paying as mine could get onto the ladder themselves rather than dealing with dodgy landlords.
I'd love a lot of things but I have to be a realist about things and act on my feelings.0 -
You didn't say point b) carpetbelly, it was implied from a lack of founded reasoning. It was obviously embelished.
I hope you have a good evening, I know I am, I'm getting to meet my best mates girlfriend, fun fun.
I'm not attacking you, I was initially inviting you to provide something more substantial, and got persistent about it. Apologies for that.
Minor point: Was 3 sources, and the point was that they were easy to find. Of course, I don't trust the BBC's reporting as far as I can through it, but in those two articles they had some fair points.I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.
That also means I cannot share in any profits from any decisions made!;)0 -
carpetbelly wrote: »I'm glad I've bought, I've got my house that I like where I am happy. Yes, it's not my dream home but what first home is? FTB need to be more realistic as to what they can get for their first house also.
Interesting.
I'm pretty much a FTB. I earn over 50% more than the average London salary, I have a 6 figure deposit and yet I still cannot afford much more than a 1-2 bed flat in an average London neighbourhood.
It must be impossible for those FTBs with smaller deposits on average salaries.0
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