House Price Crash Discussion Thread

Lotus-eater

Pobby wrote: »

I went through the last pop in the housing market and felt some of the pain.I said that at least we have all learnt from this and it would never happen again.Oooppss,got that a bit wrong ,didn`t I!

I was too young to have known of a previous crash in 89 and never really thought about a crash happening, no one pointed out to me that it might happen and even if they had, I wouldn't really have believed it, I was young and it seemed absolutely impossible.
So when I see younger people within the last year saying it will never happen, I can relate to that....... what has concerned and amazed me is the people much older than myself saying the same thing.

WTF?_2

Lotus-eater wrote: »

I was too young to have known of a previous crash in 89 and never really thought about a crash happening, no one pointed out to me that it might happen and even if they had, I wouldn't really have believed it, I was young and it seemed absolutely impossible.
So when I see younger people within the last year saying it will never happen, I can relate to that....... what has concerned and amazed me is the people much older than myself saying the same thing.

People can have short memories or be willing to ignore the obvious when it suits them.....

The thing is, the economic problems we are facing are not just a regular recession. The sheer amount of effort going into bailing out the banking system should be enough to tell even the most determinedly optimistic sort that we are staring economic disaster in the face.

Our financial system encourages a boom/bust cycle. Under the normal course of things the 'busts' aren't a disaster and after a year or two of hard times we get several years of improving standards of living.

The problem is that we have had almost a decade of interference aimed at preventing the 'bust' part and stoking the 'boom' to high heaven. This means that the inevitable bust is going to be all the greater. Quite massive in fact.

Given how most people seem to take 'easy to obtain' employment and access to large amounts of cheap credit for granted and indeed depend on that situation continuing just if they want to make ends meet, there is going to be a lot of disquiet and suffering.

We are in for an unprecedented period of deterioration in living standards, economic pain and general hardship. Attempts by Central Banks to print our way out of it with new money might forestall the pain for a year or two more but it will make the eventual pain longer and deeper.


Reduce your exposure to debt, try to save enough for six months of living expenses to cover emergencies, reorganise your life to live more frugally and make sure your savings are invested somewhere safe (NS&I are a good bet).

jamescredmond

I'd like to call you a doom-mongering misery,!!!!!!? with all these predictions of woe.

but I can't.

in my county personal debt has risen to £9200 (average), excluding mortgage/student loans.

much of this debt has been accrued by 'lifestyle choice' (vacations, clothes, dining out, electronic goods, etc).

most of those with this type of debt fall into the 18-34yr bracket.

Jesus...

normally, my town high st. is full of shoppers on an easter b/hol.
today it was all but empty.

not sure if this is an indication of the d/turn, but it doesn't look good.

being a bit of a saddo I study the markets often, and while I admit to being no expert, it's becoming increasingly obvious that we're due quite a serious hit.

every time I pick up a copy of the ft/economist I think of amy winehouse - 'it's like watching a road traffic accident in slow motion'.

even the more optimistic 'expert' commentators are beginning to sound uneasy.

!!!!!!?, if you'd posted something like this immediately post - northern rock I would have howled with laughter and called you nuts.

but today? well.............. if anything I think you're underestimating the oncoming tsunami.

merlinthehappypig

jamescredmond wrote: »

normally, my town high st. is full of shoppers on an easter b/hol.
today it was all but empty.

They are all here.

We live in the middle of Exmoor, miles from anywhere, and the lane past our house has been like the M5 today. Scared all the sheep into the front garden - it's been like an episode of Wallace and Gromit.............

jamescredmond

merlinthehappypig wrote: »

They are all here.

We live in the middle of Exmoor, miles from anywhere, and the lane past our house has been like the M5 today. Scared all the sheep into the front garden - it's been like an episode of Wallace and Gromit.............

got to laugh. looks like they're trying to escape the inevitable.

mr.broderick

!!!!!!? wrote: »

Those who bought when it was affordable and consequently took the historically safe mortgage level on (90% LTV/3.5x salary) should have few problems barring unfortunate personal circumstances.

However, for most people out there it's been a long time since you could save 10% of the value of the house as a deposit and get a mortgage of only 3.5x your salary to pay the rest. Most average people who bought in the last 3 years will have borrowed considerably more than they can easily afford to repay and are highly vulnerable to a house price deflation.

Really, these people should never have bought but a collective madness seems to have seized the public psyche where suddenly it became good to borrow massive amounts of money to pay 2-3x as much for a house as you would have a couple of years back. If food or fuel prices had rocketed by as much everyone would have been complaining but in an example of perverse logic they thought it was great that the cost of buying the roof over your head increased massively.

Such was the availability and cheapness of credit to the entire population I think the public lost sight of the value of money. In the last 5-6 years just about everyone could have anything material that they wanted ... as long as they put their future in hock to pay for it. We're seeing that all unwind now.

Yeah they were good times !!!!!! bought 7 years ago for £65k sold it last year for £210k nice holidays cheap money borrowed for cars on house etc..pity you missed it all heh?

mr.broderick

jamescredmond wrote: »

I'd like to call you a doom-mongering misery,!!!!!!? with all these predictions of woe.

but I can't.

in my county personal debt has risen to £9200 (average), excluding mortgage/student loans.

much of this debt has been accrued by 'lifestyle choice' (vacations, clothes, dining out, electronic goods, etc).

most of those with this type of debt fall into the 18-34yr bracket.

Jesus...

normally, my town high st. is full of shoppers on an easter b/hol.
today it was all but empty.

not sure if this is an indication of the d/turn, but it doesn't look good.

being a bit of a saddo I study the markets often, and while I admit to being no expert, it's becoming increasingly obvious that we're due quite a serious hit.

every time I pick up a copy of the ft/economist I think of amy winehouse - 'it's like watching a road traffic accident in slow motion'.

even the more optimistic 'expert' commentators are beginning to sound uneasy.

!!!!!!?, if you'd posted something like this immediately post - northern rock I would have howled with laughter and called you nuts.

but today? well.............. if anything I think you're underestimating the oncoming tsunami.

Yeah you'll find !!!!!! here most days wishing the crash on so he can buy and enjoy the rise that follows just like them all on here wishing the crash on, i'll be here in 5 years to make sure they dont eat their words if it does happen...

luvpump

U.S Property In free fall ..
http://www.cbsnews.com/stories/2008/03/25/business/realestate/main3965607.shtml

In marco terms the u.k Economy is not as badly placed as the Americans, but anyone who tries to kid you that the u.k will not follow to a large degree is kidding themsleves or trying to kid the general public... its coming & its going to be painful !!
With the mood in Wall street seemingly going from Armageddon to the Second Coming,...then back again !!! :rotfl: The whole sub prime crises has got many months to unravel !!!

Vincenzo

I don't think things are that bad!!

I hate to use the press but here are a couple of recent articles that, if you choose to allow, show some glimmer of hope.....

http://news.bbc.co.uk/1/hi/business/7312479.stm

http://news.bbc.co.uk/1/hi/business/7311759.stm

I personally think the credit crisis is over stated. This is due to the fact that no one really knows the extent of the 'bad debt'. In these situations it is best to play safe. Hence credit 'drying up' to a degree. I am still getting offers of loans through the door and I am sure daytime TV is still awash with 'sub-prime' loan offers. And my mortgage company keeps writing to me offering to lend me more money than I need. If in the current state of fear we are managing to get by without a 'housing market crash' or recession, I expect that once things calm and the extent of the 'crisis' can be established, the fear and panic will subdue. This is not to say that we will see the likes of 125% mortgages again, well let's hope not anyway!

mr.broderick

Vincenzo wrote: »

I don't think things are that bad!!

I hate to use the press but here are a couple of recent articles that, if you choose to allow, show some glimmer of hope.....

http://news.bbc.co.uk/1/hi/business/7312479.stm

http://news.bbc.co.uk/1/hi/business/7311759.stm

I personally think the credit crisis is over stated. This is due to the fact that no one really knows the extent of the 'bad debt'. In these situations it is best to play safe. Hence credit 'drying up' to a degree. I am still getting offers of loans through the door and I am sure daytime TV is still awash with 'sub-prime' loan offers. And my mortgage company keeps writing to me offering to lend me more money than I need. If in the current state of fear we are managing to get by without a 'housing market crash' or recession, I expect that once things calm and the extent of the 'crisis' can be established, the fear and panic will subdue. This is not to say that we will see the likes of 125% mortgages again, well let's hope not anyway!

Think this is a fair post.