A REAL Mortgage Crisis Coming?

adr0ck

jamescredmond wrote: »

and since when did 'vocabulary' begin with a capital 'v' away from the start of a sentance???

and since when did a sentence being with a little 'a' (or even the word and can u do that?)

quick u better report yourslef to the spelling & grammAr police

oh you r the spelling and grammar police........

Generali

Standardized spelling is overated

MonteCarloHangout

Am I stupid? (cue a deluge of "Yes")

But what is a HPC / HPCer?

dannyboycey

The irony of it is, that Adr0ck's grammar is non-existent anyway.

. , ' ? " : ; ...are just a few of the useful buttons available on all good keyboards.

OMG, I can't believe I've been sucked into this now! :eek:

Generali

MonteCarloHangout wrote: »

Am I stupid? (cue a deluge of "Yes")

But what is a HPC / HPCer?

HPC = house price crash. That is a large fall in real house prices.

HPCer = (often used insultingly) towards those that believe that an HPC is certain in the near future. Some HPCers are almost like members of a Millennial cult. Others are a little more measured.

MissMoneypenny

IveSeenTheLight wrote: »

With the interest rate being dropped, this will lessen the need to sell and therefore a low demand of buyers and a low supply of houses.

Could this mean that house prices stagnate or drop slowly for a long time.
It would mean that people are stuck with property or cannot buy for a period of time.

Maybe the country will become more like the continent and become less ownership orientated with more people renting.

That's a very big straw that you are clutching.

Kez100

This change is going to make a huge difference to the market. Even we have had two 95% mortgages (both early 90's) and both have good jobs. Back then the prices were so low the deposit amount involved was small as well.

For a sudden change to 10% with prices so high, I would think this will take most of the FTBs out of the market for quite some time. Leaving chains to be started by whom? Not BTL that's for sure. The only people out there able to buy without a chain/start a chain are those with excess money who think property is a good bet.

You could put money on people just not moving or staying where they are but I'm not sure that will be the case over the next five years, as fixed deals come to an end and SVR is the only way to go for those with past 100%+ loans. It's going to add real financial pressure to those who were not the best with their money in the past.

Whatever, anyone can say we are in a very different market than the last crash. Yes, they can, but I'm not sure the different market conditions are better rather than worse.

Generali

Kez100 wrote: »

This change is going to make a huge difference to the market. Even we have had two 95% mortgages (both early 90's) and both have good jobs. Back then the prices were so low the deposit amount involved was small as well.

For a sudden change to 10% with prices so high, I would think this will take most of the FTBs out of the market for quite some time. Leaving chains to be started by whom? Not BTL that's for sure. The only people out there able to buy without a chain are those with excess money who think property is a good bet.

The thing with that scenario is it isn't complete, IMO.

1. FTBs can no longer buy without a reasonable deposit.
2. BTLs are finding financing harder to come by and bigger depoists demanded by lenders.

Less money going in to the market at the bottom so fewer chains being started.

3. Fewer sales mean a higher proprtion of sales will be either distressed (eg reposession) or highly motivated (eg moving abroad, BTLer retiring, inhertance being sold). These will face the problems of having to chase less money and so will have to be cut in price as they have to be sold.
4. As distressed/motivated sales become a larger proportion of the market, prices measured by LR will fall (even if asking prices measured by Rightmove hold up) as these price takers get what they can.
5. Lenders see falling prices and want higher deposits and valuers become still more conservative leading back to the beginning (see 1.).

What breaks the cycle? For the cost of home ownership to be less than renting as that way by buying you're making money month-by-month so it matters rather less that prices are falling to you. It will also draw investors in.

All IMO of course.

MissMoneypenny

Generali wrote: »

3. Fewer sales mean a higher proprtion of sales will be either distressed (eg reposession)

Where will the government (welfare), house these people and how will the country be able to raise that extra finance?

Generali

MissMoneypenny wrote: »

Where will the government (welfare), house these people and how will the country be able to raise that extra finance?

Good question. If they can then it'll either mean higher taxes today (although it's hard to see what you can raise more tax on without destroying the economy) or borrowing more and so higher taxes tomorrow.

As the government is already borrowing a lot of money it's possible that they may not be able to borrow any more.

If they can't get it through tax and they can't borrow, they can print the money if they want to. That then causes problems with inflation: more money chasing same number of things = money is worth less = inflation.

The final solution is that they spend less. Where they cut from is a 'tough choice' but politicians always bang on about how they love to make 'tough choices'.

Actually housing them isn't a problem as there are plenty of flats and houses in this country. That's why you don't see many people living in tents in your local park.