advice needed,offers rejected, are we expecting too much?

EdInvestor

Carolt

Two issues you are misunderstanding here:

1) A month on month fall will reduce the rate of growth of the annual figure: this does not mean it will turn it negative.

2)There can be very wide variations between national and local figures. Just because there is a large fall in the rate of growth (or even a large absolute fall) in one area does not mean there can't be a rise in another area. Equally, different types of homes may behave differently ( eg new flats vs terraces or suburban semis.).

The US market has some major differences from ours which suggest it might not be too smart to assume the UK will follow its lead.One is that around half US homeowners are on 25 year fixed rate mortgages and are thus unaffected by interest rates. Another is the ease and cheapness of getting land for new housing - here there is a shortage which tends to limit supply and props up prices A third is the inexperience of the US market (borrowers and lenders) in managing adjustable rate mortgages: in the UK of course these are the norm.

It's fair also to note IMHO that the damage so far in the UK banking system from structured products is significantly lower than in the US system, despite the fact we have some large global players in investment banking. Although NRK's problem was very high profile and knocked confidence, it's a comparatively small bank, certainly not a major player in the system.It's demise would not have any major effect.

carolt

I don't think I'm misunderstanding anything here, EdInvestor, but it's quite possible that those less experienced at recognising financial mumbo-jumbo than I might be confused by some of what you write.

To respond to your points in order:

1) The figures I quoted you were referring to the US, not the UK, and were definitive year-on-year FALLS (excuse my need to keep shouting, but you do seem to keep missing the point). They were NOT annualised extrapolations from the last 3 month figures.

If, on the other hand, you are confusing me with others, arguing with your interpretation of UK (not US) figures, who have rightly explained that the fact that the last 3 months have shown consistent falls in UK prices means it is misleading to rely on annualised figures - because the 'rises' are based on rises achieved last winter/spring, and the direction of the market has changed radically in the last few months - I would have to agree with them. No, it 'doesn't mean it will turn negative'. But the weight of serious analysis is clearly that it will. David Cameron was not on the news this morning talking about ways for banks to avoid repossessing at risk homeowners unless price falls were imminent. Citizens Advice were not bewailing the fate of sub-prime borrowers 'mis-sold' mortgages on the news this a.m. likewise if all was going springingly and prices were marching inexorably onwards and upwards.

2) So what? No-one, myself included, as far as I'm aware, disputes that there are variations. I'm just at a loss as to how this contributes to your argument (if indeed you have a coherent argument at all....?).

3) Your argument that the US market differs from ours on the basis that it has a higher rate of fixed-rate mortgages is one of your most baffling claims. To be sure, it DOES - but if a country with so many protected, safe, stable borrowers can go belly-up, what hope is there for somewhere like Britain, where we are awash with people on short-term fixes, many of whom are very shortly about to get an unpleasant shock when these run out within the next year or two, putting many on the much higher rates around now compared to when they took out their current mortgages (or worse, for those with less than perfect credit, on their lenders SVR due to their inability to get a better remortgage deal post credit-crunch)?

4) Whilst I agree with your point about 'the damage so far in the UK banking system...etc' - the crucial phrase is 'so far'. The UK market is lagging behind the US at present, but we cannot remain immune to it for long.

5) I would disagree that NR was just small fry - it was a major player in the mortgage market. But I would argue it is more a symptom than a cause of future troubles. How many more NR's are we going to see?

If you wish to delude yourself as to the true state of the housing market in the UK that is nobody's business but your own. But if you choose to deliberately mislead others, on a public forum, then that is an entirely different matter.

FTB's have a right to know what they might be getting into. It seems pretty widely agreed at the moment that the risks of property prices shooting up and away further out of reach is pretty low at the moment. So it will not hurt them to wait and see, if in doubt. And if, like me, you believe prices will continue to fall further, then they are definitely better off waiting. Obviously, for those well able to buy at current prices (somewhat of a minority of FTB'S, I think!), this need not detain them, but for most others, advising caution in the current market seems like common sense.....

dolce_vita

As much as I enjoy reading your posts carol, don't bother responding to Ed because he is either a clown or is just winding people up.

It's just a waste of your time and effort.

EdInvestor

carolt wrote: »

4) Whilst I agree with your point about 'the damage so far in the UK banking system...etc' - the crucial phrase is 'so far'. The UK market is lagging behind the US at present, but we cannot remain immune to it for long.

5) I would disagree that NR was just small fry - it was a major player in the mortgage market. But I would argue it is more a symptom than a cause of future troubles. How many more NR's are we going to see?

Good news on this front as the central banks launch their effort to sort out the credit crunch. This is what we've been waiting to see for some time now.

http://www.ft.com/cms/s/0/d9e03c62-a8bb-11dc-ad9e-0000779fd2ac.html

FTB's have a right to know what they might be getting into. So it will not hurt them to wait and see, if in doubt.

Quite so, as I said before.

carolt

dolce_vita wrote: »

As much as I enjoy reading your posts carol, don't bother responding to Ed because he is either a clown or is just winding people up.

It's just a waste of your time and effort.

Thanks. I tend to agree.

nelly_2

dolce_vita wrote: »

As much as I enjoy reading your posts carol, don't bother responding to Ed because he is either a clown or is just winding people up.

It's just a waste of your time and effort.

Yeah and being a clown is my job

robwend

nelly wrote: »

Yeah and being a clown is my job

hey mr yourve your own forum bog off lol