UK Property "Tipping Point"

[SallyAnne]

We've got an interest only mortgage.

We bought at £280k, last time we checked it was worth £350k, but quite honestly, I couldn't give a t*ss if it's "worth" price dropped to £50k. It's my home, and I adore it.

I'd never walk away - it's worth every penny to me...infact I think it's under valued.

That's the difference between a home and a business venture I guess. This thread probably only applies to BTLs.

[expat]

We've got an interest only mortgage.

We bought at £280k, last time we checked it was worth £350k, but quite honestly, I couldn't give a t*ss if it's "worth" price dropped to £50k. It's my home, and I adore it.

I'd never walk away - it's worth every penny to me...infact I think it's under valued.

That's the difference between a home and a business venture I guess. This thread probably only applies to BTLs.

Absolutely right. If you can look at your house today, and know that it is still what you thought it was when you bought it (i.e. a home for life) then you are OK.

The people with problems are those who bought something that is not now what they wanted: e.g. they wanted ownership of a property that would rise in price faster than inflation; or they wanted a property that would bring in more in rent than they pay in mortgage.

The overheated market is cooling like a Yorkshire pud with the oven door open, but sensible houses that were bought at not-too-stupid prices, in areas that people who still have jobs will want to live in, they are not disasters. Nobody's buying right now, of course, because the media tell them that prices will be down 40% by next year. But decent houses are still decent houses (and there are still not enough of them).

[ratewhore]

Where I live, the Land Registry House Price Index shows an annual drop of 2% to the end of August.

Linky

[HairyArsedBloke]

The overheated market is cooling like a Yorkshire pud with the oven door open, ...

Oh, how 'northern'. I am supposing that it is something similar to a collapsing soufflé?

[Diver]

If the market drops values another 40%, I'll start getting nervous

[rootsnall]

Where I live, the Land Registry House Price Index shows an annual drop of 2% to the end of August.

Linky

Ta, quite good that link !

It'll catch up with the current Halifax/Nationwide figures in 6 months time, look when it started going negative on a monthly basis and work it out. I think the Halifax/Nationwide numbers still might need another month to lose the last positive figure !?

[expat]

Oh, how 'northern'. I am supposing that it is something similar to a collapsing soufflé?

I didn't want to say that in case people thought I was snooty.

[Cyberman]

First of all, I have no interest in UK property market, don't own one, don't intend to, don't live there. But it seems to me that at a declared 12.4% annual decline we are on the way to a "tipping point".
I estimate about 35% in real terms to be it.
What I mean is that at some point all the interest only mortgages, even with 10% deposit will be so under-water that it will make more sense financially to walk away (BTL, 2nd home). And even capital repayments at less than say 5 years old will be the same. At this point the defaults and repos will hit the roof, further reducing house prices............rinse & repeat doom.
Opinions?

Interest rates will be very low next year, probably around 3 to 3.5% , and should be much lower right now but for HMG incompetence. Low interest rates will be the saviour of the current situation, but also the abolition of HIPS and energy certificates will also remove some hassle, and the Tories have promised this I believe.

After six months out of work on JSA, people would get their mortgage paid anyway, and no doubt many will eventually fall into this category.

[HairyArsedBloke]

I didn't want to say that in case people thought I was snooty.

Like Gordon Brown.



Oh hang on - that's snotty isn't it. Sorry.

[lambretta008]

We've got an interest only mortgage.

We bought at £280k, last time we checked it was worth £350k, but quite honestly, I couldn't give a t*ss if it's "worth" price dropped to £50k. It's my home, and I adore it.

I'd never walk away - it's worth every penny to me...infact I think it's under valued.

That's the difference between a home and a business venture I guess. This thread probably only applies to BTLs.

Please don't take this the wrong way, but you don't own the house.

Unlike those who repay the mortgage and thereby take ownership a slice of the house as they keep making repayments, you are only servicing the capital borrowed.

I'd always go for repayment method.