What's the equivalent of foreclosure in the UK?

kevinqq

This is interesting. 

Bank of England chief warns of ‘worrying echoes’ of 2008 financial crisis | Bank of England | The Guardian

poseidon1

kevinqq said:

This is interesting. 

Bank of England chief warns of ‘worrying echoes’ of 2008 financial crisis | Bank of England | The Guardian

Indeed.

America's fraud and malfeasance culture within their banking sector appears to be alive and well despite  lessons supposedly learnt  from the last debacle.  One can only hope the  external  non American banking sector have done a much better job insulating themselves from American manufactured contagion.

Silvertabby

jimjames said:

kevinqq said:

Find it amazing what happened and I really hope no one is thinking of repeating it.  Bubble education needed, and sub prime warnings to be heeded. 

History does repeat itself although slight differences each time "It will be different this time" doesn't always work out.

You've mentioned 2008 as I guess it's closer to your memory but 1989-1990 was a far worse situation. Negative equity was a problem for at least a decade after that.

A friend bought a house in 1987 after a bit of a bidding war.  She tried to convince me to do the same, as 'prices will just keep going up, and if I didn't do it then I'd never be able to get on the property ladder'.  Fortunately, I'd just been posted to an expensive housing area and so couldn't afford to buy, even with a 120% Northern Rock mortgage.

Then came the crash, and my friend was plunged into negative equity.  She didn't lose the house because she was could still afford to pay her mortgage, but it was a good 10 years before the house value exceeded the remaining mortgage.  Negative equity was only a problem if you had to sell or remortgage, so many - like my friend - were able to weather the storm.  

silvercar

Silvertabby said:

jimjames said:

kevinqq said:

Find it amazing what happened and I really hope no one is thinking of repeating it.  Bubble education needed, and sub prime warnings to be heeded. 

History does repeat itself although slight differences each time "It will be different this time" doesn't always work out.

You've mentioned 2008 as I guess it's closer to your memory but 1989-1990 was a far worse situation. Negative equity was a problem for at least a decade after that.

A friend bought a house in 1987 after a bit of a bidding war.  She tried to convince me to do the same, as 'prices will just keep going up, and if I didn't do it then I'd never be able to get on the property ladder'.  Fortunately, I'd just been posted to an expensive housing area and so couldn't afford to buy, even with a 120% Northern Rock mortgage.

Then came the crash, and my friend was plunged into negative equity.  She didn't lose the house because she was could still afford to pay her mortgage, but it was a good 10 years before the house value exceeded the remaining mortgage.  Negative equity was only a problem if you had to sell or remortgage, so many - like my friend - were able to weather the storm.  

For those moving up the ladder, the drop in prices was an opportunity not a storm. We sold in early 1993 for less than we had paid in 1988, but it meant we could afford a bigger property than if prices had risen.

dunstonh

silvercar said:

Silvertabby said:

jimjames said:

kevinqq said:

Find it amazing what happened and I really hope no one is thinking of repeating it.  Bubble education needed, and sub prime warnings to be heeded. 

History does repeat itself although slight differences each time "It will be different this time" doesn't always work out.

You've mentioned 2008 as I guess it's closer to your memory but 1989-1990 was a far worse situation. Negative equity was a problem for at least a decade after that.

A friend bought a house in 1987 after a bit of a bidding war.  She tried to convince me to do the same, as 'prices will just keep going up, and if I didn't do it then I'd never be able to get on the property ladder'.  Fortunately, I'd just been posted to an expensive housing area and so couldn't afford to buy, even with a 120% Northern Rock mortgage.

Then came the crash, and my friend was plunged into negative equity.  She didn't lose the house because she was could still afford to pay her mortgage, but it was a good 10 years before the house value exceeded the remaining mortgage.  Negative equity was only a problem if you had to sell or remortgage, so many - like my friend - were able to weather the storm.  

For those moving up the ladder, the drop in prices was an opportunity not a storm. We sold in early 1993 for less than we had paid in 1988, but it meant we could afford a bigger property than if prices had risen.

I got lucky.   Our first house was £44k but three years earlier, the previous owner paid £68k.   

Anecdotally, we use Zoopla to look up property values on our fact-finding.  We know Zoopla is unreliable for precision pricing, but it gives you a ballpark..     Since August,  larger properties are being priced 15-35% lower.

ACG

I dont think we will see the same as 2008 personally. 
The market brought in a 4.5x income cap in 2014. Prior to that, I remember doing 6-7x income (I only became a broker in 2012) and I imagine prior to that could have been far higher with self certs. 

Although the FCA have rolled back on the 4.5x income multiple recently (for some stupid reason), it is going to help protect a lot of people. And I think that is where people will be thankful for regulation. 

The people who will lose out the most in my mind are the people who are really stretching themselves now. There wont be enough time to build up equity and get pay rises etc before it all hits the fan. 

If your doing 5.5x income over 35 years now, where is your safety blanket? It is harder to pay 5.5x one persons income than it is 4.5x. 2023 after the mini budget was a massive wake up call for me. Every phone call was a difficult one. Thankfully we could extend the term, look at interest only etc and along with cut backs I think most people were able to manage. 

molerat

dunstonh said:

silvercar said:

Silvertabby said:

jimjames said:

kevinqq said:

Find it amazing what happened and I really hope no one is thinking of repeating it.  Bubble education needed, and sub prime warnings to be heeded. 

History does repeat itself although slight differences each time "It will be different this time" doesn't always work out.

You've mentioned 2008 as I guess it's closer to your memory but 1989-1990 was a far worse situation. Negative equity was a problem for at least a decade after that.

A friend bought a house in 1987 after a bit of a bidding war.  She tried to convince me to do the same, as 'prices will just keep going up, and if I didn't do it then I'd never be able to get on the property ladder'.  Fortunately, I'd just been posted to an expensive housing area and so couldn't afford to buy, even with a 120% Northern Rock mortgage.

Then came the crash, and my friend was plunged into negative equity.  She didn't lose the house because she was could still afford to pay her mortgage, but it was a good 10 years before the house value exceeded the remaining mortgage.  Negative equity was only a problem if you had to sell or remortgage, so many - like my friend - were able to weather the storm.  

For those moving up the ladder, the drop in prices was an opportunity not a storm. We sold in early 1993 for less than we had paid in 1988, but it meant we could afford a bigger property than if prices had risen.

I got lucky.   Our first house was £44k but three years earlier, the previous owner paid £68k.   

Anecdotally, we use Zoopla to look up property values on our fact-finding.  We know Zoopla is unreliable for precision pricing, but it gives you a ballpark..     Since August,  larger properties are being priced 15-35% lower.

We bought our first house in Norfolk in 1981 for £15K, sold in 1986 for £24K.  It was bought by someone moving up from down south, bought our house and a local business.  They sold just before the bust for £50K and moved back home, they played a blinder on the markets as everything was happening regionally.  A while later the house sold for £35K.

kevinqq

ACG said:

I dont think we will see the same as 2008 personally. 
The market brought in a 4.5x income cap in 2014. Prior to that, I remember doing 6-7x income (I only became a broker in 2012) and I imagine prior to that could have been far higher with self certs. 

Although the FCA have rolled back on the 4.5x income multiple recently (for some stupid reason), it is going to help protect a lot of people. And I think that is where people will be thankful for regulation. 

The people who will lose out the most in my mind are the people who are really stretching themselves now. There wont be enough time to build up equity and get pay rises etc before it all hits the fan. 

If your doing 5.5x income over 35 years now, where is your safety blanket? It is harder to pay 5.5x one persons income than it is 4.5x. 2023 after the mini budget was a massive wake up call for me. Every phone call was a difficult one. Thankfully we could extend the term, look at interest only etc and along with cut backs I think most people were able to manage. 

I've heard some interviews where people were actually saying the mini budget was a good idea, anyone heard that?  
It's just there so so much change that the markets didn't like it - but overall it was a good idea if we had decided to embrace it. 

ACG

kevinqq said:

ACG said:

I dont think we will see the same as 2008 personally. 
The market brought in a 4.5x income cap in 2014. Prior to that, I remember doing 6-7x income (I only became a broker in 2012) and I imagine prior to that could have been far higher with self certs. 

Although the FCA have rolled back on the 4.5x income multiple recently (for some stupid reason), it is going to help protect a lot of people. And I think that is where people will be thankful for regulation. 

The people who will lose out the most in my mind are the people who are really stretching themselves now. There wont be enough time to build up equity and get pay rises etc before it all hits the fan. 

If your doing 5.5x income over 35 years now, where is your safety blanket? It is harder to pay 5.5x one persons income than it is 4.5x. 2023 after the mini budget was a massive wake up call for me. Every phone call was a difficult one. Thankfully we could extend the term, look at interest only etc and along with cut backs I think most people were able to manage. 

I've heard some interviews where people were actually saying the mini budget was a good idea, anyone heard that?  
It's just there so so much change that the markets didn't like it - but overall it was a good idea if we had decided to embrace it. 

I think the problem is that they did not explain how everything would be funded. 

Who remembers your maths exam where you had to show your working out to get the full marks? 
No idea if the budget was a good idea or bad one. I wasnt making a political point, just that I think the 4.5x income multiple prevented a lot of people being up a creek without a paddle. 

Its not in my favour to say this btw, house prices going up means more commission. But at the same time, I tend to buy into my customers and build up a relationship with them. If they go through a tough time, I feel it on my shoulders also. 

Silvertabby

silvercar said:

Silvertabby said:

jimjames said:

kevinqq said:

Find it amazing what happened and I really hope no one is thinking of repeating it.  Bubble education needed, and sub prime warnings to be heeded. 

History does repeat itself although slight differences each time "It will be different this time" doesn't always work out.

You've mentioned 2008 as I guess it's closer to your memory but 1989-1990 was a far worse situation. Negative equity was a problem for at least a decade after that.

A friend bought a house in 1987 after a bit of a bidding war.  She tried to convince me to do the same, as 'prices will just keep going up, and if I didn't do it then I'd never be able to get on the property ladder'.  Fortunately, I'd just been posted to an expensive housing area and so couldn't afford to buy, even with a 120% Northern Rock mortgage.

Then came the crash, and my friend was plunged into negative equity.  She didn't lose the house because she was could still afford to pay her mortgage, but it was a good 10 years before the house value exceeded the remaining mortgage.  Negative equity was only a problem if you had to sell or remortgage, so many - like my friend - were able to weather the storm.  

For those moving up the ladder, the drop in prices was an opportunity not a storm. We sold in early 1993 for less than we had paid in 1988, but it meant we could afford a bigger property than if prices had risen.

We bought our house, as first time buyers, in 1994.  Because prices were still flat-lining after the crash, were were able to afford our forever home - 4 bed detached - and are still happily here in our retirement.

Not planned, just got lucky.