Prices will fall by 50% in four years

Dan:_4

LittleMissAspie wrote: »

As the interest rate goes up, surely mortgage rates will too?

The gap between the base rate and SVR/fixed rates is huge right now. Historcally this gap would have been around 2%.

As banks start to fight for business again, and the base rate starts to increase, the gap will close in.

Graham_Devon

LittleMissAspie wrote: »

As the interest rate goes up, surely mortgage rates will too?

Yes.

There are some on fixes, but in 2007 a quarter of mortgages were taken on 2-5 year fixes. Which means now, a lot will be coming off their fixes and moving on to SVR.

In 2007, 19% were already on SVR according to here:
http://www.insidemoneytalk.com/news/mon/mon149.html

Now, in 2009, remortgaging has become very very difficult, let alone expensive. So more and more will be left on the SVR with no choice for remortgaging.

Chucky is right in that since the turn of the year a lot have been fixing. However, that ignores everyone else with a mortgage before the turn of the year.

We need to look at the whole mortgage market to provide analysis, which is what I am trying to do here.

For some, they will still be on their fixes, but coming off in a couple of years or so. For many, fixes will have ended and they will find themselves either better off, or the same as when they were on their fix.

For a huge percentage of people, when interest rates go up, they will see their mortgge rate go up. I do not believe that mortgage lenders will leave their rates unchanged if BOE rates go up. You only need to look around you to see they are putting most rates up at the moment, and this will continue for a while after the banking industry nearly collapsing recently. To pretend they are al lfixed within 9 months is somewhat delusional.

chucky

skap7309 wrote: »

Bang on the money. I love it how a few months of price rises have enabled the bulls to drag this thread from the depths to spout how wrong it is, despite it being 14 months into the 48 predicted.

Whilst i am cert ainly not supporting 50% drops, i am by no means writing it off. The government have surpassed themselves by keeping prices artificially high but it is just that - artificial. The above in bold is going to play a huge factor over the years and i can see this period as a break before it continues.

actually it was just an update on the Derivatives forcasts for property.

it's just the guys that didn't like the content of the forecast that are saying it's anything else...

but 50% drops by Christmas 2009 :rotfl:

Dan:_4

Just noticed really2's reply in post #154 - that is what I was trying to get at in my post above!

MissMoneypenny

Graham_Devon wrote: »

Yes.

There are some on fixes, but in 2007 a quarter of mortgages were taken on 2-5 year fixes. Which means now, a lot will be coming off their fixes and moving on to SVR.

Like this one]

http://forums.moneysavingexpert.com/showthread.html?t=1876045

Jamie_A_G

pickles110564 wrote: »

Glad to see you are still wishing for misery on normal home owners, cant wait for the bad luck to hit you.
By the way a curse is on you until you stop wishing misery on others.;)

Agreed! Realistically no one knows what will happen.

If you think about it logically, there is so much money tied into the houseing market and it is a large basis of our economy, should prices drop by this we would be in a pretty bad situation for the country, let alone individuals, don't forget we do live on a small island with only so much room on it, so at some point demand will outweigh supply, hence a lift in prices.

I can't see it going this far, but who honestly knows? If it does I would suggest we have far more pressing issues to deal with! My vote would be to stop worrying and go to the pub..!:beer:

Graham_Devon

MissMoneypenny wrote: »

Like this one]

http://forums.moneysavingexpert.com/showthread.html?t=1876045

Exactly like that one, and it points out its hard to remortgage now too.

Really2

Graham_Devon wrote: »

Exactly like that one, and it points out its hard to remortgage now too.

Surely thats persons repayment were higher when they took out the mortgage.
She is on a .05 tracker that mean she would have been paying what about 5.5% 2 years ago.

Graham_Devon

Really2 wrote: »

Surely thats persons repayment were higher when they took out the mortgage.
She is on a .05 tracker that mean she would have been paying what about 5.5% 2 years ago.

Probably were. But the point is these things are now ending, and people are finding they cannot just switch anymore, which is what I was saying.

MissMoneypenny

Jamie_A_G wrote: »

don't forget we do live on a small island with only so much room on it, so at some point demand will outweigh supply, hence a lift in prices.

We have only built on a low % of the country.