Another couple of questions for crash trolls

westernpromise

Let's suppose there's a house price crash like many crash trolls imagine they want.

Let's further suppose you're a crash troll who's been confidently waiting for this to happen so you can step over the wreckage and snap up a bargain.

So a couple of questions, for fun.

In a market that has just crashed (eg) 30%, do you think mortgage lenders will require a deposit that is

1. higher than they require now?
2. lower than they require now?
3. the same as they require now?

And as fun followup question, what do you think your own chances are of spotting the bottom of the market and buying back in at the right time, given that you're a houseless crashtroll now?

1. Good; you are a shrewd trendspotter who has so far always called house prices right
2. Poor; you've never called the housing market right yet
3. Neither; lizards and the banks will conspire against you again

movilogo

Crash like 30% won't happen. At most it will be like ~10%. That is enough to send an earthquake shockwave to many.

Banks lend on the assumption that if borrower defaults they can take over the house and recoup their cost by selling the house. It is fine in a rising market but won't work in a falling market.

So if such a crash really happens, banks may not lend in a falling market. They will probably still lend, but with more deposits requirement or a non favourable (to buyer) interest rate.

purch

I'm going 1. and 3. but I have just had a large Wild Turkey & Coke

DiggerUK

purch wrote: »

I'm going 1. and 3. but I have just had a large Wild Turkey & Coke

Lay off the coke.........

Crashy_Time

westernpromise wrote: »

Let's suppose there's a house price crash like many crash trolls imagine they want.

Let's further suppose you're a crash troll who's been confidently waiting for this to happen so you can step over the wreckage and snap up a bargain.

So a couple of questions, for fun.

In a market that has just crashed (eg) 30%, do you think mortgage lenders will require a deposit that is

1. higher than they require now?
2. lower than they require now?
3. the same as they require now?

And as fun followup question, what do you think your own chances are of spotting the bottom of the market and buying back in at the right time, given that you're a houseless crashtroll now?

1. Good; you are a shrewd trendspotter who has so far always called house prices right
2. Poor; you've never called the housing market right yet
3. Neither; lizards and the banks will conspire against you again

I will be buying cash, so the banks are not involved - in answer to your first questions.


In answer to your second - when there are no posts on here from indebted property mentalists, that is the time to buy

silvercar

The chances of a crash troll spotting the bottom of the market?

Never, they can only see the downside. Until prices drop to the level of the 92 price crash, they won't think it worth buying.

chucknorris

silvercar wrote: »

The chances of a crash troll spotting the bottom of the market?

Never, they can only see the downside. Until prices drop to the level of the 92 price crash, they won't think it worth buying.

This is a very good point, where some see opportunity, others can only see disaster. I've made virtually all my profit from buying (shares and property) when the relevant markets have been falling. In fact, I am disappointed in myself (shares, not property) for the times that I have bought during a buoyant market, instead of being more patient and waiting to buy during a trough. Still, it is impossible to get everything right all the time, so I'll settle for being ahead.


EDIT: Right now (in the last week) I am being a bit bearish, and I have moved a substantial sum out of shares, into cash.

mayonnaise

Crashy_Time wrote: »

I will be buying cash, so the banks are not involved -

Yes of course. No bank would give you a mortgage at your age anyway. :rotfl:

Percy1983

The crash already happened, I bought at the bottom of it.

Prices where down 24.88% from the peak of April 2008.

Prices matched to September 2004 approx.

Prices are still down 17.83% down from the peak.

I also bought when it was 'impossible' to get a mortgage with only a 10% deposit, but that was just luck apparently.

chucknorris

Percy1983 wrote: »

Prices are still down 17.83% down from the peak.

Depends where you are Percy, for example our properties in London are up about 35% from the 2007/8 peak.

purch

silvercar wrote: »

Until prices drop to the level of the 92 price crash, they won't think it worth buying.

They might be waiting a while.

We still have 3 of the properties I bought at auction in 1991 in Queens Reach East Moseley....one of them cost me £ 41,365 all in, and the rest less than £ 50K. Seeing as they go for much more than 10X that nowadays................