Skipton to offer 100% mortgages

lojo1000

born_again said:

lojo1000 said:

I don't think the government should allow anything over 50% debt/equity when buying a house.

Prices would fall to a new equilibrium and from there the financial risk would be lower on both the buyer and the lenders.

Interesting idea. A brave new world.

But look at the number of people that could never sell their house due to negative equity.

For any sort of equilibrium it would take decades, & a generation of people going broke.

Most likely lead to a total collapse of markets.

Appreciate your considered response.

Agree it would create chaos. Perhaps a gradual reduction in LTVs over the next 10 years at 5% pa.

This would avoid the sudden panic that houses are overvalued.

Interesting that when people consider a 50% LTV most people think house prices will come down and yet at the same time often hold the view that houses are not overvalued and it is undersupply that is causing prices to rise and not rising debt.

born_again

Are houses overvalued though? Like everything they are worth what someone is prepared to pay.

Take a look at rental prices. Even in the public sector.

lojo1000

I don't really want to get into a conversation about money and debt but my view is property (and rent) is overvalued due to the amount of debt aimed at the sector for the last 30 odd years fueled by successive govts needing to keep the housing sector primed to stay in power.  They need outstanding debt to increase else the economy falters.

Agreed, if someone wants to pay x for a house then they value it at min x but they are often motivated by desperation or greed. The desperation I witness on a daily basis to buy a house tells me that the price would be lower if you took that emotion away as people would be less willing to take excessive financial risk.

mi-key

lojo1000 said:

born_again said:

lojo1000 said:

I don't think the government should allow anything over 50% debt/equity when buying a house.

Prices would fall to a new equilibrium and from there the financial risk would be lower on both the buyer and the lenders.

Interesting idea. A brave new world.

But look at the number of people that could never sell their house due to negative equity.

For any sort of equilibrium it would take decades, & a generation of people going broke.

Most likely lead to a total collapse of markets.

Appreciate your considered response.

Agree it would create chaos. Perhaps a gradual reduction in LTVs over the next 10 years at 5% pa.

This would avoid the sudden panic that houses are overvalued.

Interesting that when people consider a 50% LTV most people think house prices will come down and yet at the same time often hold the view that houses are not overvalued and it is undersupply that is causing prices to rise and not rising debt.

Nobody is panicking now that houses are overvalued? 

It's all a moot point anyway crashy as it will never happen, and you will still be waiting for the big crash so you can buy 

lojo1000

mi-key said:

lojo1000 said:

born_again said:

lojo1000 said:

I don't think the government should allow anything over 50% debt/equity when buying a house.

Prices would fall to a new equilibrium and from there the financial risk would be lower on both the buyer and the lenders.

Interesting idea. A brave new world.

But look at the number of people that could never sell their house due to negative equity.

For any sort of equilibrium it would take decades, & a generation of people going broke.

Most likely lead to a total collapse of markets.

Appreciate your considered response.

Agree it would create chaos. Perhaps a gradual reduction in LTVs over the next 10 years at 5% pa.

This would avoid the sudden panic that houses are overvalued.

Interesting that when people consider a 50% LTV most people think house prices will come down and yet at the same time often hold the view that houses are not overvalued and it is undersupply that is causing prices to rise and not rising debt.

Nobody is panicking now that houses are overvalued? 

It's all a moot point anyway crashy as it will never happen, and you will still be waiting for the big crash so you can buy 

No-one should panic since i'm sure everyone is comfortable with the financial decision they have made.

mi-key

Nobody is panicking now that houses are overvalued? 

It's all a moot point anyway crashy as it will never happen, and you will still be waiting for the big crash so you can buy 

No-one should panic since i'm sure everyone is comfortable with the financial decision they have made.

I'm sure they are, it just seems to be you are worried for them on their behalf? 

lojo1000

mi-key said:

Nobody is panicking now that houses are overvalued? 

It's all a moot point anyway crashy as it will never happen, and you will still be waiting for the big crash so you can buy 

No-one should panic since i'm sure everyone is comfortable with the financial decision they have made.

I'm sure they are, it just seems to be you are worried for them on their behalf? 

I am concerned for young families who work 2 jobs and count every penny. I think govt policy toward housing is self-serving and bordering on criminal let alone incompetent.

Altior

Young families who work 2 jobs are most likely getting (and have already gotten) a fair whack of cash from the taxpayer.

lojo1000

Altior said:

Young families who work 2 jobs are most likely getting (and have already gotten) a fair whack of cash from the taxpayer.

A young family working 2 jobs are most likely paying more in taxes than taking in benefits.