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Thousands facing negative equity
Comments
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The Credit Crunch will not last forever.
It's not just the credit crunch depressing prices - figures show that the market peaked in Aug 07; So it turned a good 4 months before the credit crunch hit mortgage availability.
And even when the credit crunch eventually goes away, don't expect lending to return to anything like the wanton levels of the last few years. Lenders have rediscovered risk and borrowers will slowly rediscover common sense, which has been sadly eclipsed by greed in recent times.--
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 -
It's not just the credit crunch depressing prices - figures show that the market peaked in Aug 07; So it turned a good 4 months before the credit crunch hit mortgage availability.
And even when the credit crunch eventually goes away, don't expect lending to return to anything like the wanton levels of the last few years. Lenders have rediscovered risk and borrowers will slowly rediscover common sense, which has been sadly eclipsed by greed in recent times.
I don't expect lending (I really hope not anyway) to return to stupid levels (100%, 8X salary etc.....)
I am not a fan of HPI by any stretch of the imagination.0 -
The Credit Crunch will not last forever.
No but it is getting worse, taking bigger fish all the time. Its going to last years and has only started in the UK just look at B&B.
As prices fall it gets worse and the banks take more loses and have tighter lending.
WE are looking at least another 2 years, all these interest rate cuts have just delayed it finishing and all that poison is still out there and needs to work itself through.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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If you buy with partner/wife then the amount you can borrow will be much more. Most pople have joint mortgages and the day's of the single bread winner are over.
Yeah right, there are more single people than ever before. Marriages down, divorces up and lots of people looking after there career before settling down.What are your reasons to assume a 50% fall apart from hoping that interest rates will rise?
Pure and simple the traditional 3.5 times salary dictates it.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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Many single people prefer renting, so they are not tied down etc. It has always been much much harder to buy a place on your own and always will be.Yeah right, there are more single people than ever before. Marriages down, divorces up and lots of people looking after there career before settling down.
This will mean people will have to buy a house within their price range. i.e. a young couple will have to start off with a 1 bed flat rather then the 3 bed-semi.Pure and simple the traditional 3.5 times salary dictates it.0 -
Look at it from a buyers perspective say there is a £200,000 house which is out of your range, if it drops 20% it will be £160,000, now...to go from a £160,000 which is what you could afford, to £200,000 is a 25% increase in your purchase power, you can now afford a house 25% 'better' than your previous expectations.
If we go on...you love maths don't ya :T
(well you should have paid attention at school then!!)
Take a 50% drop to £100,000, if previously you could afford a house worth £100,000, you can now buy a house which was previously valued at £200,000, which was probably beyond your wildest dreams.
So that's what I am saying a 50% drop, looked at from the the buyers perspective is a 100% increase in his purchase power ie he could actually buy 2 of the houses he way previously looking at. Similarly a 33% drop correspondes to a 50% increase from the buyers purchasing power perspective.
But also looking at it from a buyers and owners perspective, if prices do drop 50%, then I and many others that have bought in the last 6 years will end up in negative equity so won't be able to move. Therefore although houses will be "cheap", there probably won't be many available to buy!
I presume rents will also have to drop a similar level, as where I live, rent is often more than the interest on the mortgage (given you put down a 10% deposit),otherwise we'd end up with a lot of people despate to buy due to high rents, and very few people willing or able to sell.Should've = Should HAVE (not 'of')
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)0 -
I hope not or I'm doomed. As a single person household (always have been), I'd like to state quite categorically that the days of a single bread winner are still strong, it's just all those smug married couples pretend we don't exist any more (in case we run off with the husband who is fed up with the wife nagging)the day's of the single bread winner are over.0 -
PasturesNew wrote: »I hope not or I'm doomed. As a single person household (always have been), I'd like to state quite categorically that the days of a single bread winner are still strong, it's just all those smug married couples pretend we don't exist any more (in case we run off with the husband who is fed up with the wife nagging)
haha Sometimes I wish my other half would run off with someone else. I think I would quite enjoy living alone. Imagine all that football I could watch without any nagging or Eastenders etc....
You are right PN, I meant that it is getting more difficult for familiys with kids to have only 1 parent working.0 -
This will mean people will have to buy a house within their price range. i.e. a young couple will have to start off with a 1 bed flat rather then the 3 bed-semi.
The problem there is that most first time buyers are now older (i.e. me - I'm 27) and actually want to buy a house so they can start a family. Houses in my price range are all 1 bedroom - not sure where I'd put a baby!
I for one would welcome a crash. Sure, I'd feel a little sorry for people in negative equity - although if they hadn't have been stupid enough to get 120% mortgages in the first place house prices might have fallen to more reasonable levels quicker0 -
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