A REAL Mortgage Crisis Coming?

brit1234

Historically speaking there has always been a crash in each housing cycle and there are good reasons why this won't happen this time. If anything housing is more overvalued than ever before so logically there is room for large falls.

There will be no plateau or gentle slow down as the housing market is affected my far too many different variables making it impossible to balance. It either goes up or down for long periods, it has never stabalised in history.

For all those who say it can't crash because of low interest rates and low unemployment rates then look at the USA. They have low unemployment and considerably lower interest rates but despite each cut prices tumble. We are starting to see this here especially as people realise that property is so overvalued.

We are due a crash, which I believe is a good thing for the majority.

dannyboycey

jamescredmond wrote: »

the real culprits, IMO, are those who seem to have o'dosed on prozac and blithely insist on talking the market up..

Many are trying to kid themselves that they haven't made a mistake by:

*Remortgaging to pay for a car they didn't need.
*'Upsizing' to keep up with the Jones's.
*Getting on the ladder before they 'missed the boat'.
*Getting into buy-to-let to get rich quick 'coz it's easy'.

(* delete as appropriate)

...others try to talk the market up (as if their opinions actually hold sway) purely because they have a vested interest in prices remaining high.

Generali

dannyboycey wrote: »

...others try to talk the market up (as if their opinions actually hold sway) purely because they have a vested interest in prices remaining high.

Some people also talk about house prices continue to rise because they genuinely believe it. Not everybody that believes in continuing HPI is part of some bizarre worldwide conspiracy between Bankers, Estate Agents and a cabal of BTLers run by Krusty 'n' Phil

dannyboycey

Generali wrote: »

Some people also talk about house prices continue to rise because they genuinely believe it.

I'd forgotton about those. Perhaps because most are already locked away in padded cells.

Bruno?

SquatNow

House prices go:
Boom
Bust
Boom
Bust
Boom
Bust
Boom
Bust
Boom
Bust

The last move was Boom. What comes next?
A) Boom
Bust
C) Platau

adr0ck

yes but its different now

running away

WTF?_2

kingkano wrote: »

Just wanted to pick on this 1 point. Id doubt its half the country. Only 75% of houses are owned (I guess 25% rent?). And of those what portion are actually mortgage free or very low (under 50% ltv). With recent historical rises I'd say a good portion.

What portion are really bad credit or over 90% ltv. I would guess at tops 5% of the country? Maybe even as low as 2% 'of the country' will be in trouble at the moment.

If values fall by 10% then I see a larger portion obviously having trouble sourcing a new mortgage deal. But thats not yet.

People who bought in the last 2-2.5 years are going to be seriously looking at negative equity.

People who MEWed up to the armpits, likewise.

Pretty much everyone else isn't going to be hurt too badly by lower prices per se. In fact, lower house prices benefit more people than they disadvantage.

However the problem is that so much of the economy now depends on borrowing that the knock on effects are going to be nasty for all. This is a result of some extremely bad government policies (most of the Western govts, not just the UK) and some very bad banking practices.

Dithering_Dad

Why do all of the threads on this board start off talking about one subject, move onto House Price Crashes and end with me and my family hiding in the root cellar, fighting off killer zombie repo-men and eating dogs and rats to survive?

It was interested at first, but I always know it's time to stop reading when Squat Now appears and starts going on about us all living in army death camps. Pass me the tinfoil hat! :rolleyes:

Cozworth806

adr0ck wrote: »

yes but its different now

running away

Yes because Gordon Brown told us that he has ended the cycle of Boom and Bust by prudence.

Primrose

I suspect that many of us who obtained our mortgages in "the good old days" where you could only borrow a multiple of two and a half or maximum of three times salary on a dual income will say that this is exactly how it should be. The fact that many people have been encouraged to borrow well beyond their ability to repay is sad, but common sense should have told them that their borrowings were unrealistic. These drastic cutbacks will help to reinforce the hard message to a new generation that there is no such thing as easy money. Whilst they have been getting cheap mortgages, I can recall the times when our mortgage interest was 15%, which was an added spur to cut back on domestic spending and repay the mortgage as quickly as possible. If nothing else, this credit crunch may force younger mortgagees to think seriously about where their priorities lie - a roof over their heads or new cars, regular meals out and lots of expensive holidays abroad.