Prices will fall by 50% in four years

boyse7en

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.

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.

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.

Many, coming to the end of their fixed periods, won't go onto SVR anyway.
I've finished a three year fix (ended Jan 2009) and my BTL mortgage will end its fixed period in September and as part of my original agreements, instead of going on to the lenders' SVR, I go onto a 'retention rate' for the duration of the mortgage; BOE + 1.4 for one, BOE + 2% on the BTL one.

This was part of the lenders' standard agreement, I didn't have any special circumstances or anything, so I would imagine that a fair proportion of mortgages taken out two or three years ago would have a similar clause.

So,while BOE rates remain low, many will be better off away from a fixed-rate, not stuck on unaffordable SVR rates.

andykn

brit1234 wrote: »

Now if you can show the economic reasons why this won't happen please enlightern

Dismally easy. The "average retail price inflation of 4%" includes house price inflation. So if that past performance is a guide to the future house prices have to rise. If that past performance isn't a guide to the future, the falls are likely to be much smaller in real terms.

What does the equivalent futures trade have as a prediction for inflation would be a better comparator? Historical RPI is meaningless and only a comparison an idiot news worker would use.

And what does the "key index of property price futures" say today?

sabretoothtigger

remortgaging has become very very difficult

Why is that especially, negative equity? I know people who have bought this decade and just recently sold and moved, they had to lower the price alot but apart from that got a new fixed rate and can move where they like

Expect the unexpected and a 50% fall is too simple to me

MissMoneypenny

Really2 wrote: »

Farmer get paid not to produce crops on some land to help rebuild insect life like bees which then help maintain crop yeild for the future etc..

I think you will find we had set aside because of the grain mountain the EU had.

brit1234

andykn wrote: »

Dismally easy. The "average retail price inflation of 4%" includes house price inflation. So if that past performance is a guide to the future house prices have to rise. If that past performance isn't a guide to the future, the falls are likely to be much smaller in real terms.

What does the equivalent futures trade have as a prediction for inflation would be a better comparator? Historical RPI is meaningless and only a comparison an idiot news worker would use.

And what does the "key index of property price futures" say today?

You quote RPI lol.

Don't you remember the Labour changed to CPI (without house prices) over a decade ago. \\\\if they had used RPI then this far higher level of inflation would of meant higher levels of interest rates reducing the size of todays housing bubble.

Try harder, you haven't yet given the reason that todays overvalued prices are sustainable and I am sure the members can give a good amount of economic ones why they are not.

:rotfl:

Really2

MissMoneypenny wrote: »

I think you will find we had set aside because of the grain mountain the EU had.

I watching a country file the other day and they get a £250 per hectare for resting land so native wildlife can return.

If you think farm land should be turned to housing land you have little respect for future generations in my opinion.
We have to accept what is sustainable, building over farm land is madness. I can't believe you cant see that.
Even if you did, what facility's for a population will be in a field,you would need complete infrastrucure so it would render it very expensive as well as destructive to the country's own future food production needs.

More people live in city's now than the countryside, that should tell you that people are migrating to built up areas for work not away.

andykn

brit1234 wrote: »

You quote RPI lol.

Don't you remember the Labour changed to CPI (without house prices) over a decade ago. \\\\if they had used RPI then this far higher level of inflation would of meant higher levels of interest rates reducing the size of todays housing bubble.

Try harder, you haven't yet given the reason that todays overvalued prices are sustainable and I am sure the members can give a good amount of economic ones why they are not.

:rotfl:

Epic fail, Try again. The quote was from the article that YOU posted, "average retail price inflation rate of 4%".

I'm the one pointing out that using a historical measure of inflation that included large house price inflation to suggest that the real rate of house price deflation will be bigger is just rubbish.

Now, what does the equivalent futures trade have as a prediction for inflation as it would be a better comparator?

And what does the "key index of property price futures" say today?

StevieJ

brit1234 wrote: »

Also mentioned in The Times.

Remember inflation is rising fast across the UK and the world, interest rates are going to rise.

Oil was $139 dollars a barrel on Friday

How time change

chucky

mewbie wrote: »

I think house prices have much further to fall - could be 50% plus from peak to trough.

you're right Stevie - how times change

mr_fishbulb

StevieJ wrote: »

How time change

Did you seriously revive this thread just to write that?

Or was your intention to point out that brit1234 posted a thread in 2008 saying that house prices will drop by 50% in 4 years, but now it looks very unlikely so we can all have a big laugh at him?