We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Moneyweek: Why this housing crash could be worse than the 1990s
WTF?_2
Posts: 4,592 Forumite
http://www.moneyweek.com/file/44840/why-this-housing-crash-could-be-worse-than-the-1990s.html
[FONT=Verdana, arial, helvetica, sans-serif]
Along with France and the Netherlands, the IMF believes Britain has one of the world’s most precarious property markets. It calculates that at least 30% of the value of homes cannot be explained by fundamentals such as demand or rising incomes, reports The Times. [/FONT][FONT=Verdana, arial, helvetica, sans-serif]Of course, this has been obvious to anyone with any sense and has been for a long time. High house prices aren’t about supply and demand, or rising incomes – they’ve been all about availability of credit for years now. And that’s vanishing rapidly, even for wealthy buyers. C&G now demands a £200,000 deposit if you want to borrow £1m, double what it was at the start of this week. So much for the unassailable London market.[/FONT]
..
[FONT=Verdana, arial, helvetica, sans-serif]This is what happens in a credit crunch. Debts that people believed they’d never have to pay off suddenly crystallise, as refinancing becomes impossible. And for many people, those debts simply won’t be affordable. Particularly as the businesses employing them are facing the same problems, and are unlikely to be able to increase wages to compensate, even if they wanted to.
It's not really looking too great out there is it? I don't like to be posting an endless string of doom-laden articles but hopefully an MSEer reading these forums can get exposure to something they might not otherwise have seen.
[/FONT]
[FONT=Verdana, arial, helvetica, sans-serif]
Along with France and the Netherlands, the IMF believes Britain has one of the world’s most precarious property markets. It calculates that at least 30% of the value of homes cannot be explained by fundamentals such as demand or rising incomes, reports The Times. [/FONT][FONT=Verdana, arial, helvetica, sans-serif]Of course, this has been obvious to anyone with any sense and has been for a long time. High house prices aren’t about supply and demand, or rising incomes – they’ve been all about availability of credit for years now. And that’s vanishing rapidly, even for wealthy buyers. C&G now demands a £200,000 deposit if you want to borrow £1m, double what it was at the start of this week. So much for the unassailable London market.[/FONT]
..
[FONT=Verdana, arial, helvetica, sans-serif]This is what happens in a credit crunch. Debts that people believed they’d never have to pay off suddenly crystallise, as refinancing becomes impossible. And for many people, those debts simply won’t be affordable. Particularly as the businesses employing them are facing the same problems, and are unlikely to be able to increase wages to compensate, even if they wanted to.
It's not really looking too great out there is it? I don't like to be posting an endless string of doom-laden articles but hopefully an MSEer reading these forums can get exposure to something they might not otherwise have seen.
[/FONT]
--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
0
Comments
-
Very simple statement, what about the fact that people will pay more for better quality property on the better side of town.http://www.moneyweek.com/file/44840/why-this-housing-crash-could-be-worse-than-the-1990s.html
[FONT=Verdana, arial, helvetica, sans-serif] High house prices aren’t about supply and demand, or rising incomes – they’ve been all about availability of credit for years now. [/FONT]
[FONT=Verdana, arial, helvetica, sans-serif][/FONT]
Our last two that we have sold were to cash buyers who still kept their other homes.0 -
Maybe because they are not like the youth of today who want everything before they have saved to afford, like their 50inch plasma's , designer clothes etc.And of course this has nothing to do with the availability of credit because the buyers had saved up the cash to buy another house.
yeah right0 -
pickles110564 wrote: »Maybe because they are not like the youth of today who want everything before they have saved to afford, like their 50inch plasma's , designer clothes etc.
It's not just the 'youth of today' who shoved everything on the credit cards/ mortgage. Everyone did it!Stercus accidit0 -
pickles110564 wrote: »Maybe because they are not like the youth of today who want everything before they have saved to afford, like their 50inch plasma's , designer clothes etc.
You really haven't got a clue have you!0 -
HenryWeston wrote: »You really haven't got a clue have you!
Indeed. Some people live in their own little fantasy world0 -
It's not just the 'youth of today' who shoved everything on the credit cards/ mortgage. Everyone did it!
No - not everyone. I know at least several people who were prudent and didn't, and consequently are in a far better position today than all those who have accumulated very risky debts.0 -
It's not just the 'youth of today' who shoved everything on the credit cards/ mortgage. Everyone did it!
We didn't. We used the low interest period to overpay our mortgage. OK, so we still watch a 32" CRT TV, but we watch it happier in the knowledge we have 15% LTV (probably soon to be 30%!)0 -
We didn't. We used the low interest period to overpay our mortgage. OK, so we still watch a 32" CRT TV, but we watch it happier in the knowledge we have 15% LTV (probably soon to be 30%!)
How do you cope:rolleyes: seriously though is there really much of a difference in picture quality when you are sat 10ft away watching it, i dont think so.0 -
Our house has just been valued 20k lower that last year, also we remortgaged and now the value is lower than the mortgage... we need to sell up and with the 10k redemption were well below the price. Any idea's...0
-
Our house has just been valued 20k lower that last year, also we remortgaged and now the value is lower than the mortgage... we need to sell up and with the 10k redemption were well below the price. Any idea's...
You don't really have a lot of options unfortunately - you're caught in the negative equity trap.
Your best bet is to sit tight and make sure you pay your mortgage.
Otherwise you'll have to save enough cash to make the shortfall between sale price and mortgage debt if you want to sell and move.
In any case you should start economising immediately. Cut out all unnecessary expenses and save, save , save.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.1K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.3K Spending & Discounts
- 245.2K Work, Benefits & Business
- 600.9K Mortgages, Homes & Bills
- 177.5K Life & Family
- 259K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards