Is it too late to sell a house in Northern Ireland???

IvanOpinion

talksalot81 wrote: »

I don't know how someone struggling to meet their fixed rate deal (the media and anecdote will lead you to the conclusion that there are many) can possibly tighten the belt and survive if they are in negative equity. The whole problem is that they have absolutely NO ground to renegotiate. They cannot go elsewhere if in negative equity. There is not a provider in the country who will lend to them. They are forced to accept the jump to SVR or else sell up. If they can barely afford the fixed rate deal then they cannot begin to afford the SVR. They are forced to sell.

The only ones that is an opportuntity for are those with cash in hand and willing to gamble. Unfortunately for most bullish viewpoints, people in this position are more 'savvy' than the many amateur 'debt to let'ers and wont be so easily persuaded.

There are 2 sides to negative equity ... one in relation to the house price itself and the second in relation to remortgaging. as far as the house price itself is concerned this only becomes a problem if the owner needs to sell in which case they will lose money.

The second side is the remortgaging. Generally speaking it appears that if you have been a good payer, been with the bank for a few years then they will make their deals available (I can not say this is true for all banks but, anecdotally, know some definitely will). The problem is that many of the deals are now much more closely related to the actual cost of borrowing money rather than a desperate grab for customers. The borrowers had it far too good for quite a while and many bacame reckless.

When asked I have often suggested if you can not afford to pay back the loan at 50% above what you are currently paying then it is too expensive .. this is now the situation we are in. If people can not currently afford their fixed rate deals then why on earth did they sign up to it .. they knew at the end of the deal they would have to find something else and, given that basic common sense told us that deals could not go much lower, then it was obvious that it was going to cost more.

For years people complained that credit was too easy to get and that it was the banks fault ... well now it is getting more difficult and it appears some think it is still the banks fault. people said banks should be more responsible .. be careful what you wish for!

Ivan

IvanOpinion

talksalot81 wrote: »

I am inclined to think the problem is more fundamental. I think that the practice of lending money is at the source. Debt has simply become a substitute for hard work.

I am not sure I would agree wioth you although I think I know where you are coming from.

Many people work hard (very hard) but the debt is due to a society driven by materialistic and showy displays of extravagance whereby success is often measured on shallow displays of perceived wealth. I still work on the principle (mortgage excepted) that I buy things when I can afford them, I don;t feel the need to have everything 'now' and am willing to wait.

Ivan

martin57

hi,


I bought my semi detached bungalow in 96 for 60k and done a few improvements built extra bathroom etc. I suppose at the hight of the boom it would have been worth 230k, maybe now get 200k. I still consider it vastly over valued. This little house should cost no more than 140k, and because its my only house i.e my home I couldn't care less if it dropped to 100k or less, in fact I might be even quite pleased as with rates and other things linked to house values that might save me money in long run, and as well as that the young generation need homes that are affordable, need the same chance as ourselves to be able to buy a place.

Lets face anyone who has bought a second home are speculating and to a certain extent greedy and I haven't much sympathy for them.

martin

leftieM

IvanOpinion wrote: »

If people can not currently afford their fixed rate deals then why on earth did they sign up to it .. they knew at the end of the deal they would have to find something else and, given that basic common sense told us that deals could not go much lower, then it was obvious that it was going to cost more.

People borrowed what they could because they had to to get a house. There was the 'missing the boat' mentality. I suppose many thought that if it got too tight you could always sell up and at least you'd have made a few quid. You could just rent/ buy something cheaper. Demand has exceeded supply for the last 10 years so selling wasn't a major issue. Also you could usually remortgage and get another good deal. It wasn't obvious that there was going to be a credit crunch.

IvanOpinion

leftieM wrote: »

People borrowed what they could because they had to to get a house. There was the 'missing the boat' mentality. I suppose many thought that if it got too tight you could always sell up and at least you'd have made a few quid. You could just rent/ buy something cheaper. Demand has exceeded supply for the last 10 years so selling wasn't a major issue. Also you could usually remortgage and get another good deal. It wasn't obvious that there was going to be a credit crunch.

Hold on there bald eagle ...common sense and even the lightest of reading and listening to what economists have had to day has, for many years now, dictated a couple of things
1. historically interest rates have been very low for quite a while and it is very likely they will be heading back up
2. house prices will at some point in the future fall and house prices will at some point in the future rise ... for what happens after that please read point 2 again

I agree with you about the 'missing the boat mentality' but the problem was that many people were not willing to invest in a boat to suit their purposes but instead would only settle for a top of the range yacht. One that they could hardly afford to buy not to worry carry out maintenance, berthing fees or fill with petrol.

Ivan

leftieM

Common sense doesn't dicate much when it comes to economics. You need to be informed about these things to make a decision. You need to choose where that information comes from. If you allow yourself to just follow the headlines you may get misleading information. If you choose not to investigate further then, yes, you must take responsibility for that decision.

IvanOpinion

leftieM wrote: »

Common sense doesn't dicate much when it comes to economics. You need to be informed about these things to make a decision. You need to choose where that information comes from. If you allow yourself to just follow the headlines you may get misleading information. If you choose not to investigate further then, yes, you must take responsibility for that decision.

I think we are probably saying similar things ... ignoring the credit crunch (which in some ways has helped the situation, while hurting it in others), everything else has been widely predicted for many years .. however more importantly it was seriously predicted several months before happening when people were still extending themselves well beyond their abilities. In many ways I think it was the doom mongers predicting massive price collapses for years that generated a 'cry wolf' attitude in society.

Bringing the credit crunch back into the picture it has if anything pushed rates back down. What it has also done is mean that banks are now lending much more responsibly .. something we have been begging them to do for years .. the downside is that instead of carefully turning the credit tap off bringing people down carefully, it was turned off overnight leaving many people no time to prepare.

Ivan

talksalot81

IvanOpinion wrote: »

Hold on there bald eagle ...common sense and even the lightest of reading and listening to what economists have had to day has, for many years now, dictated a couple of things
1. historically interest rates have been very low for quite a while and it is very likely they will be heading back up
2. house prices will at some point in the future fall and house prices will at some point in the future rise ... for what happens after that please read point 2 again

I agree with you about the 'missing the boat mentality' but the problem was that many people were not willing to invest in a boat to suit their purposes but instead would only settle for a top of the range yacht. One that they could hardly afford to buy not to worry carry out maintenance, berthing fees or fill with petrol.

Ivan

I would have said that MSE users would be some of the better informed within the population. But if you look back to threads 18 months old (when I started really reading up on housing), I made noises about the market being unaffordable, unsustainable and in for a fall. These noises almost exclusively led to hostile replies and 'nonsensing' of what I said. House prices absolutely never went down. That was all the was to it. Most posters said that it was tough luck and one just had to borrow every penny possible and accept it would only buy a crappy low end property. Economic common sense did not enter into most minds and I find it hard to believe that the wider population was any more 'sensible' than the MSE users.

As for affording the correct level of property, well this one was targetted at me. I could only afford the very cheapest of properties. I was told that this was tough luck and I had to just accept it. This is far too simplified a view. If someone with the same sort of education/job/background as you has (last 2/3 years excepted) been able to afford a property significantly above the base at a moderate stretch, would you not think something is wrong if you can only afford the very cheapest and at an enormous stretch? That was my view but I was considered to be in denial and expecting too much.

motorguy

I believe prices will stabilise and go up again. In fact i'm quite prepared to wait whatever length of time it takes to come back on here and be all self righteous when it happens. :rolleyes:

leftieM

Talksalot - I was one of the ones who thought you were wrong back then but I admit that I was wrong. I didn't understand the market. I've educated myself since then.
PGilc. At some point in the future I too think that prices will stabilise and rise again. I think they will fall further first. That is the nature of the system. You can change your mind depending on the economic climate at the time. Only a fool would stick to any position in the face of mounting evidence to the contrary.