Rics - worse figures since 1996

carolt

Totaly disagree.

Firstly, the south is NOT more over valued than the north. Wages are much lower in the north. We left Manchester for my OH to get a job in London, as the only jobs he could get up there paid peanuts.

Secondly, the idea of mortgages based on affordability rather than income is nonsense - just another way for banks to try and raise the lending limits and keep the profits rolling in when times were good.... There was never any way for individuals to prove this; it was just self-cert under another name, and will go the way of 100%+ mortgages...and self-cert, which is rapidly becoming extinct.

Thirdly, interest rates of 8-10% were around when MIRAS was around, so actually much lower. This time round, as inflation goes through the roof, we could well face 8-10% again - but without MIRAS. So much, much higher in real terms.

subjecttocontract

What you call 'business as usual' is not remotely usual. This speculative bubble is over, and finally, we will see a return to genuine 'business as usual' - that is, lending multiples of 3 a single income, 2.5 double, and a good deposit upfront.

I was talking about property investors who were always required to provide a good deposit and lending multiples don't apply......its more about rental income vs mortgage payments etc.

Tough on over-indebted property 'investors', I admit. But I doubt I'll shed many tears for them...... :rolleyes:

There are plenty of property investors who are not over extended and who will eventually take over complete control of the UK property market which will consist of private rented accomodation and holiday lets. FTB's are extinct and will remain so......the future for the majority lies with renting, they will just have to get over it like they have in Europe.

jaype

subjecttocontract wrote: »

FTB's are extinct and will remain so......the future for the majority lies with renting, they will just have to get over it like they have in Europe.

Is that the Europe where rents are substantially lower than the UK and you don't have the uncertainty of being turfed out of your ear every 6 months? Aside from the Government's professed desire to up the number of owner occupiers (probably not worth the air used in saying it), if this ever comes to pass, will the last under 35 to leave please turn out the lights? (have to think of global warming and all that )

carolt

Yes, more than happy to rent as they do in Europe - lovely cheap, secure tenancies.

Lousy profits for 'investors' though....

teabelly

Affordability isn't self cert under another name. You give the mortgage lender 3 months bank statements to prove what you are telling them! The 3x salary metric is outmoded and isn't reflective of ability to pay at all. Lenders also take into account existing credit so under your idea some fool with 20k credit card debt on £25k pa could borrow the same as some sensible person on £25k with 20k saved and no credit card debt. I think you are confused as a self cert mortgage product is something entirely different to lending on affordability.

Wages can be decent up here. Average wage in London is only £5k more pa than the rest of the country so your example isn't necessarily reflective of what is going on. Peanuts is relative anyway. A shoebox in London is more than a 3 bed terrace in Manchester so if you went back down south for a few extra K then you are much worse off anyway.

Interest rates will not go back up to 8-10%. The max the BOE will dare raise them to would be about 6% and even then they know they'd be at risk of committing financial suicide. Plus the BOE has just realised that what they do with rates won't necessarily be reflected by lenders. If they want lending rates to lower then they have to improve liquidity. Messing with interest rates won't do diddly if the banks won't lend to each other.

King_Of_Fools

The full PDF can be found here:
http://www.rics.org/NR/rdonlyres/F1D8EC6B-085D-4DD7-980B-AECAAB4C8F74/0/hms_feb2008.pdf

IveSeenTheLight

mystic_trev wrote: »

I didn't mention anything about a crash - there's a seperate 'sticky' for that! All I said was that RIC's had posted the worst figures since 1996!

Hey not a problem Trev,
I didn't mean to specifically say you mentioned a crash but that some others in the thread were using your link to say this signifies there will be a crash and by how high.
I just wanted to reply with info also from your same link and therefore was quoting your link

I've thanked you to show there is no hard feelings

Anyway, on holiday in a couple of days and man am I looking forward to it

epz_2

pickles110564 wrote: »

If sellers hold out for as much as they want because they do not need to sell then buyers cant buy.

am i missing something here, it probably costs over 5k in legal fees and tax ation not to mention hassle and stress.

do sellers do this for fun or do they actually want to move somewhere else, whats the point holding onto a house for years you dont like to get a notional value.

oh and re the point of us turning into a nation of renters, you miss the obvious point. there is no shortage of space, just planning permission, if 70% of the population is forced to rent cause of investors and banks you can damn well bet local council planners will get b!tch slaped if they even try to constrict supply.

democracy does have its uses and a large angry polulation with nothng to lose is VERY scary to politicians.

SquatNow

HSBC are predicting 30% falls.

IveSeenTheLight

epz wrote: »

there is no shortage of space, just planning permission,

There is also not a shortage of property out there that is unoccupied and waiting to be lived in and or renovated