House Price Crash Discussion Thread

merlinthehappypig

John_Pierpoint wrote: »

What is "Basel II" ?

It's an international standard that banking regulators can use when creating regulations about how much capital banks need to put aside to guard against the types of financial and operational risks they face.

Generali

merlinthehappypig wrote: »

It's an international standard that banking regulators can use when creating regulations about how much capital banks need to put aside to guard against the types of financial and operational risks they face.

The idea is that instead of all banks putting aside the same proportion of capital, financial institutions that take more risks (either by choice or due to mis-management) should put aside more capital.

I had to write the capital adequacy (ICAAP) document for tiny hedge fund. It was horrible.

Mary_Hartnell

Robert Peston, the man who broke the news at the bank of Northern Rock, has written a thoughtful explanation of what he thinks is happening to mortgage availability.
(So HBOS is relying on its rights issue to increase market share?)

Its the Saturday blog on here:

http://www.bbc.co.uk/blogs/thereporters/robertpeston/

After thoughts: Tory governments tend to have sex scandals and Labour financial ones?
What is going to happen to Northern Rock, when it has managed to reduce itself to the "can't pay - won't pay" brigade?
http://forums.moneysavingexpert.com/showthread.html?p=11177433#post11177433

secondtoughest

Anecdotal evidence for mortgage approvals:

A colleague (on a temporary contract) earning £18k and her boyfriend on 17.5k got a mortgage approval for £150k, which I make just over 4x joint. To be honest I was surprised she was approved as she's being having difficulty paying a loan but there you go.

skap7309

TT1 wrote: »

So does this statement not make you think property prices won't crash?
Prices start to drop and FTB who couldn't get on the ladder before jump on quickly while they can, so as not to miss the boat?

Trust me, as a FTB i wont be jumping on ANY time soon.

mr.broderick

skap7309 wrote: »

Trust me, as a FTB i wont be jumping on ANY time soon.

Actually that is exactly what will happen.

PasturesNew

I'm a FTB now I think.
I believe an STR becomes a FTB after 9 months.

PasturesNew

rippedoff3 wrote: »

We think our property is around £425000

I recently spoke with somebody I know and asked them how much they think their house is worth. While it's tidy enough, they've kept it maintained, it's certainly never had a makeover or serious updating. As the couple are quite traditional in their hobbies/appearance it's nothing special. Just tidy and well maintained.

They said it was worth £275k

A quick look at houses sold in their road shows the top price EVER was only £249k, back in 2007. And the average of the last 3 was £238k.

All the houses are similar, with similar people living in them. So nothing tatty and nothing over-developed. All just as they were built 40 years ago and just tidy, non-descript and well maintained. So no reason for any one house to be priced above/below the rest.

People quite often have an inflated opinion of the value of their house. Those that go on the market with these fictitious values are those that don't sell.

moanymoany

When I got EA's round to value my house in February this year, the values mainly went from £329,995 (on the money as it turned out) to £345,000. However one young guy said £389,995 and on seeing my startled face asked if it wasn't enough. I told him that I didn't think anyone would buy it at that price.

He then went on to show me brochures of houses, none of which were sold. They were all way overpriced. All of these vendors had refused to lower their price.

People do become convinced of their houses value. Most of them will still be living there in 2 years time saying 'but it's worth it!'

A thing's worth what it will fetch!

skap7309

TT1 wrote: »

NO ITS NOT! Your post is misleading.

Whoa! No need to shout, have i hit a nerve?
Bottom line is - people ARE struggling to get a mortage, no matter what your bullish thoughts may be. Many of my friends are desperate to buy and its the same old story of 'i cant get a mortage' despite all having good, steady jobs, myself included.