There will not be a crash

wolvoman

These threads really perplex me with the amount of exaggeration and vitriol that is displayed.

If houses prices fall a bit - so what?

If they rise a bit - so what?


Now if they fall or rise a LOT, then that's more of a problem as it will either lead to a recession or unsustainability.

Lotus-eater

Why is it that the Japanese like older "things" like antiques (so I believe) etc but must change the houses so often. Is their a practical reason? Or is it fashion.

Paul_N_4

Generali wrote: »

There are a lot of assumptions here in this (and a lot of other posts - I'm not singling you out Paul N).

It's not in a lender's interests to reposses - they lend to someone because they want a nice steady income stream not because they want to own someone's des res (one careful owner). So what happens? You may well find that the lender will cut a deal - ok your fixed rate at x% has come to an end and you can't afford x+2% but you've kept up your payments so pay us x+1%.

Alternatively, and this has been done before in the US, the lender sellers the debt (or the official receiver does) to a distressed debt fund at a discount to the face value of the debt). They then call the 'home owner' and offer to let him or her pay off the debt in one hit a a substantial discount. The debtor borrows sub prime (and this sort of borrowing has long been with us and probably always will) and despite paying a huge interest rate ends up quids in and in their home. The debt owner ends up making a profit even allowing for the fact that he's going to have to reposess a few real basketcases.

I didn't mention repossession? Bit of an assumption there Generali

Forced sellers, or simply those that would rather spend their cash on something else other than a second property they don't really need. Selling something that looked profitable a few months back, but maybe not so much now. I deliberately made my post with lots of 'maybes' in because The Dangerman has also been making lots of wild assumptions. Like BTLers have replaced FTBers, and there won't be a drop in house prices because he has high equity in his BTL portfolio, and therefore asssuming every BTLer has high equity. (oh and just added below:- "If the rate was fixed for, say, 5 years"). If, if, if...

The fact is if you're coming to the end of a fixed rate deal, and you don't have sufficient equity in your home, you're going to be worse off. And for some, it will be the point where they either have to, or want to, throw in the towel and sell up. Increase supply, and with tighter lending criteria, reduced demand. Or maybe I assume too much.

adr0ck

Lotus-eater wrote: »

Why is it that the Japanese like older "things" like antiques (so I believe) etc but must change the houses so often. Is their a practical reason? Or is it fashion.

earthquakes

The_Dangerman

Paul_N wrote: »

I didn't mention repossession? Bit of an assumption there Generali

Forced sellers, or simply those that would rather spend their cash on something else other than a second property they don't really need. Selling something that looked profitable a few months back, but maybe not so much now. I deliberately made my post with lots of 'maybes' in because The Dangerman has also been making lots of wild assumptions. Like BTLers have replaced FTBers, and there won't be a drop in house prices because he has high equity in his BTL portfolio, and therefore asssuming every BTLer has high equity. (oh and just added below:- "If the rate was fixed for, say, 5 years"). If, if, if...

The fact is if you're coming to the end of a fixed rate deal, and you don't have sufficient equity in your home, you're going to be worse off. And for some, it will be the point where they either have to, or want to, throw in the towel and sell up. Increase supply, and with tighter lending criteria, reduced demand. Or maybe I assume too much.

We can't really work on anything other than ifs, can we? There are so many variable.

But just as I like to take a positive slant, there are many people on here who are voicing an IF on the negative side. The thing is, you can't be negative all the time, can you? Think about it, what IF I died tomorrow? Then all my work to build my portfolio up would have been for nothing

Positive things happen to positive people, that's how I like to look at things.

mr.broderick

Just to get back to the op earlier comments i don't think we'll have a crash but i think 10-15% drops would do us all good or is that classed as a crash ?

thriftymomma

Debt_Free_Chick wrote: »

I have to admit there's been flood of properties onto the market (Rightmove) in the past couple of weeks, within three miles of my postcode. I guess those who want to hit the Easter viewers.

And I suspect there might be more post April 6 (new CGT rates) whether they're BTLs, second homes or holiday homes.

My own view is that an increase in properties coming to market is likely to lead price reductions. Perhaps not a crash ..... but a continuing slide, this year, I think. But then, whaddoo I know? I'm just speculating like everyone else

I'd agree with this in the short-term I think. If you think of the housing market as a seesaw, Too mnay properties available and of course it becomes a buyer's market. It'll right itself again though. Wish I had a crystal ball. lol:rotfl:

Lotus-eater

mr.broderick wrote: »

Just to get back to the op earlier comments i don't think we'll have a crash but i think 10-15% drops would do us all good or is that classed as a crash ?

How about a crash compared to the last 10 years? I suppose I would call 15% over 2 years a crash, as thats lower than inflation, so not just a stagnant market.

Generali

Paul_N wrote: »

I didn't mention repossession? Bit of an assumption there Generali

Forced sellers, or simply those that would rather spend their cash on something else other than a second property they don't really need. Selling something that looked profitable a few months back, but maybe not so much now. I deliberately made my post with lots of 'maybes' in because The Dangerman has also been making lots of wild assumptions. Like BTLers have replaced FTBers, and there won't be a drop in house prices because he has high equity in his BTL portfolio, and therefore asssuming every BTLer has high equity. (oh and just added below:- "If the rate was fixed for, say, 5 years"). If, if, if...

The fact is if you're coming to the end of a fixed rate deal, and you don't have sufficient equity in your home, you're going to be worse off. And for some, it will be the point where they either have to, or want to, throw in the towel and sell up. Increase supply, and with tighter lending criteria, reduced demand. Or maybe I assume too much.

Sorry, my point is that even the assumption that don't/can't pay the mortgage = lose the house that many make isn't necessarily the case and it may be in someone's best interests to cut you a deal rather than reposess.

baileysbattlebus

Gorgeous_George wrote: »

Looking at the average interest rate for the previous 6 months may give some indication of the problem in the late 80's and early 90's. Remember, these are BofE base rate averages and NOT mortgage rates that were typically 2% higher.

01/12/1980.....15.8
01/03/1981.....14.7
01/06/1981.....13.0
01/09/1981.....12.1
01/12/1981.....13.4
01/03/1982.....14.3
01/06/1982.....13.6
01/09/1982.....12.4
01/12/1982.....10.7
01/03/1983.....10.3
01/06/1983.....10.4
01/09/1983.....9.9
01/12/1983.....9.4
01/03/1984.....9.1
01/06/1984.....8.9
01/09/1984.....9.6
01/12/1984.....10.3
01/03/1985.....11.3
01/06/1985.....12.5
01/09/1985.....12.1
01/12/1985.....11.5
01/03/1986.....11.7
01/06/1986.....11.3
01/09/1986.....10.2
01/12/1986.....10.2
01/03/1987.....10.7
01/06/1987.....10.1
01/09/1987.....9.3
01/12/1987.....9.3
01/03/1988.....9.0
01/06/1988.....8.3
01/09/1988.....9.1
01/12/1988.....11.3
01/03/1989.....12.5
01/06/1989.....13.0
01/09/1989.....13.5
01/12/1989.....14.1
01/03/1990.....14.7
01/06/1990.....14.9
01/09/1990.....14.9
01/12/1990.....14.5
01/03/1991.....13.9
01/06/1991.....12.7
01/09/1991.....11.5
01/12/1991.....10.7
01/03/1992.....10.4
01/06/1992.....10.3
01/09/1992.....10.0
01/12/1992.....8.9
01/03/1993.....7.0
01/06/1993.....6.0
01/09/1993.....5.9
01/12/1993.....5.8
01/03/1994.....5.5
01/06/1994.....5.2
01/09/1994.....5.1
01/12/1994.....5.4
01/03/1995.....6.0
01/06/1995.....6.5
01/09/1995.....6.6
01/12/1995.....6.6
01/03/1996.....6.4
01/06/1996.....6.1
01/09/1996.....5.8
01/12/1996.....5.8
01/03/1997.....5.9
01/06/1997.....6.0
01/09/1997.....6.4
01/12/1997.....6.9
01/03/1998.....7.2
01/06/1998.....7.3
01/09/1998.....7.4
01/12/1998.....7.3
01/03/1999.....6.5
01/06/1999.....5.6
01/09/1999.....5.2
01/12/1999.....5.2
01/03/2000.....5.5
01/06/2000.....5.9
01/09/2000.....6.0
01/12/2000.....6.0
01/03/2001.....6.0
01/06/2001.....5.7
01/09/2001.....5.3
01/12/2001.....4.8
01/03/2002.....4.2
01/06/2002.....4.0
01/09/2002.....4.0
01/12/2002.....4.0
01/03/2003.....4.0
01/06/2003.....3.8
01/09/2003.....3.7
01/12/2003.....3.6
01/03/2004.....3.7
01/06/2004.....4.0
01/09/2004.....4.3
01/12/2004.....4.7
01/03/2005.....4.8
01/06/2005.....4.8
01/09/2005.....4.7
01/12/2005.....4.6
01/03/2006.....4.5
01/06/2006.....4.5
01/09/2006.....4.5
01/12/2006.....4.7
01/03/2007.....5.0
01/06/2007.....5.3
01/09/2007.....5.5
01/12/2007.....5.7

It IS different this time. Low base rates are good but NO MONEY and BANKS FAILING will be the problem.

You can work out when the Tories held elections by looking for the dips in rates. When they stopped dropping rates just before the electoion, they were voted out. The British public are generally a bit thick.

GG

thanks for putting the figures up - I knew we had paid around 15% for a quite a while - I just couldn't remember how long.
And I do remember "black Wednesday", when the rates went up for a few hours, I was at work and my boss was preparing to throw himself out of the window!!!
All the talk about fixed rate mortgages that are coming to the end of their term, my daughter and fiance bought 2 years ago on a fixed rate, interest only deal with the Nationwide and it's finishing in May this year. They had a letter yesterday from the Nationwide offering a 5 year fixed rate repayment mortgage at 5.6% with no fees and no tie in after the 5 years. Apparently for existing borrowers only, if they don't reply they'll go onto the standard variable rate, I must admit I don't know what that is, mortgage interest rates have long ceased to bother me, we've been in the house since 1995.
I don't know whether it's a good deal or not, but it seems pretty reasonable.