House Price Crash Discussion Thread

Vincenzo

merlinthehappypig wrote: »

As a follow up to this.

We went ahead and offered her £400000, two months or so after we had our offer of £440000 rejected. You could hear the gnashing of teeth from miles away........

Her initial reaction was to say that she would now be prepared to accept the £440000 we offered in January. We told the agents that that offer was no longer available, obviously, as she had turned it down. We said that the way the housing market was heading, we felt that £440000 was too much. Whilst we would have paid that in January, things had changed.

To cut a long story short we have agreed a price of £420000. Whilst we are only talking a drop of 5% or so, I believe that this is significant.

This isn't a 10%-15% drop on an unrealistic asking price, that we have been seeing over the last few months. Make no mistake, we would have paid £440000 in January, had she accepted the offer, but now we only have to pay £420000. It's a genuine reduction caused entirely by the seller's perception of where the market is heading, aided by the estate agent warning her that if she hangs on, she might not even get that.

Add the stamp duty saving and that is now £20450 we don't have to borrow.

Knowing our luck we won't be able to get the mortgage now, though the LTV is now only 15% so fingers crossed.

You are only borrowing 15% of the value of the property? I cannot imagine the mortgage will be a problem then! If it is, perhaps the credit card.....

merlinthehappypig

Vincenzo wrote: »

You are only borrowing 15% of the value of the property? I cannot imagine the mortgage will be a problem then! If it is, perhaps the credit card.....

I don't think my credit limit stretches to £60000!

I don't think that the mortgage will be a problem, but it is amazing how things have tightened up. Speaking to the Nationwide yesterday, they will now only lend 50% of what they would have done a few months back. Some income that would previously have been o.k. isn't included anymore and they make no allowances for the size of the deposit.

Whilst we are far from a straightforward case, I know, you really have to experience this complete u-turn by lenders to appreciate it.

Lotus-eater

Not sure if this is exactly HPC thread material, but I have news that one of the large mortgage lenders has a internal website and displays financial news from the papers on it for its employees, from a few days ago this has now stopped. I don't know why but would hazard a guess its because the news has stopped being good.
According to one of my friends "there is a bad feeling over much of the company"

Vincenzo

merlinthehappypig wrote: »

I don't think my credit limit stretches to £60000!

I don't think that the mortgage will be a problem, but it is amazing how things have tightened up. Speaking to the Nationwide yesterday, they will now only lend 50% of what they would have done a few months back. Some income that would previously have been o.k. isn't included anymore and they make no allowances for the size of the deposit.

Whilst we are far from a straightforward case, I know, you really have to experience this complete u-turn by lenders to appreciate it.

You obviously don't have as many cards as me! From the good old days of 0% interest and no fees! I would get rid of them but I hate to give up credit facilities - never know when you might need it!

I have always found Nationwide to be fairly tight when it comes to lending, and incidentally on valuations for re-mortgaging. So much so that I would hesitate to use them again. Some might say they have a lower risk attitude to lending which is good but they have caused me unnecessary headaches in the past.

merlinthehappypig

Vincenzo wrote: »

You obviously don't have as many cards as me! From the good old days of 0% interest and no fees! I would get rid of them but I hate to give up credit facilities - never know when you might need it!

I have always found Nationwide to be fairly tight when it comes to lending, and incidentally on valuations for re-mortgaging. So much so that I would hesitate to use them again. Some might say they have a lower risk attitude to lending which is good but they have caused me unnecessary headaches in the past.

Just two cards and one we never use!

The Nationwide will do 4.25X income which seems good, but won't take anything other than salary or pension into account so, whilst the multiple is high, the income figure being multiplied is low.

jamescredmond

mr.broderick wrote: »

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...

!!!!!!? may well have his own agenda but not having studied his posts more closely, I'll have to take your word for it.

as for myself: I'd rather deal in fact/informed projections from people better placed to call the shots.

lawrie28

Well what about Merv King saying prices are going to be "stable"??

I personally think that it is a buyers market, and that won't change for a while. Much of the speculation on prices is down to individual areas, which behave in there own little ways.

I am due to exchange on a house next week and have moved from a small 3 bed end mews to a 3 bed detached, garage, ensuite etc just down the road for an extra £2,250.

Helped that we sold to first time buyers who didn't screw the price down too much and that we have bought a "part exer" from Barratts who hadn't sold it for 10 months, and we did screw the price down with them (and got new carpets, and a repaint into the bargain). Barratts paid £20k (around £160k) more than we are buying it for, and the new neighour paid the same for his 12 months ago, but a smaller semi down the street is up for £15k more than what we are paying, so the drop is less then £20k

Ok we have rented, which has cost us a little, but overall we feel that we have a bit of a bargain, and plan to live there for a few years so are happy to ride out the storm should it get any worse.

IMO the current situation is just a bit of a warning for people, and as long as you are carefull with what you buy, now is a good time.

Personally, I don't think the market can crash too much more, but there will be small pockets that suffer worse than others, but this in turn will prompt people to buy a bargain in these pockets.

As long as there is demand for houses, which there is, and we know this because of the pressure to build new ones, then prices can't go too far.

Wouldn't fancy owning an apartment at the minute though, don't get the attraction, or long term value....

m00m00

the current prices are unsustainable given the ratio of prices to income.

they are going to come down, no matter how much vested interests bleat.

the income multipliers and LTV offered by banks is coming down, this is going to have a big impact on prices.

mr.broderick

!!!!!!? wrote: »

Back to being antagonistic and trying personal jibes in an effort to get attention I see. Nothing much changes, eh Mr. B?

Yep, another intelligent contribution from you

:rotfl:

HeHe !!!!!!...Dont you get bored constantly posting on this thread?
Telling people to keep saving, stay in rented til the big crash comes...

Difference is i dont tell people to buy now because I would never advise anyone on an internet forum.
Just because you can't afford to buy a house doesn't mean you should tell everyone else not to buy one.

Your like have been wrong for 4 years now i suppose you gotta get it right at some point eh?

In answer to the other poster i moved in to rented and pocketed the equity.
I did buy again though in december, got it on the cheap to be fair with a few grand cash gift on completion, got it around 15% below market value at the time..

Vincenzo

m00m00 wrote: »

the current prices are unsustainable given the ratio of prices to income.

they are going to come down, no matter how much vested interests bleat.

the income multipliers and LTV offered by banks is coming down, this is going to have a big impact on prices.

People have been saying this for years. Affordability is key and with far lower interest rates than back in the days of 3x income max, many people can afford to borrow much more. Granted interest rates may not stay as low as they are, but I suspect they will. And if you're worried fix your rate for 10 years, or more! Not sure if they are still around but 2 years ago I was offered a 25 year fixed rate deal.

I do not doubt for a second that the current credit crisis is affecting prices. Of course it has. How can it not? The less money there is sloshing around, the more downward pressure there is on prices. But I also dispute the severity of this 'crisis'. The housing market notoriously reacts slowly to market pressures. Why? Because people don't have to sell and sentiment is often a poor indication of economic truths. I predict the current crisis will hit a soft landing within 12 months and things will calm. FWIW I do not think we will see much growth either, for some years.

OK so there are more repossessions now than before and people are stretched etc etc... All fully expected by all concerned (except perhaps the naive borrowers who snapped up 100% + loans). You lend more to more people and more people will default. So what? It is a small percentage of the whole and capitalism has never favoured the weak.

Personally, it makes little difference to me either way. If the market stalls, I stay as I am, if it crashes, I stay as I am etc....how many others are there like me? The majority, I suspect.