Reply to: Repossessions set for dramatic rise

[Sysman]

Add high inflation to this and what do you think might happen?

That's bad in the short term but for those who can hang on until inflation inflates their pay, they should be OK in the long run. A series of promotions and pay rises which took real inflation into account certainly helped me in my early house owning days.

[gingerjedi]

Doomed.

One mans doomed is another mans boomed... I have a small mortgage and I'm looking for a larger house.

[Moscow Mule]

Sounds good to me. At the moment we have this crazy situation where I pay £800 pm rent for a flat that would be costing me at least £1300 in mortgage payments if I'd bought it. Bring on the falls!

Ditto ish - renting a house for £1350 a month, the mortgage payments would be over £3000 if I were to buy something similar.

[Chugnut]

knocking one out

[oracleslave]

Great doom posting Ferret . Even has hardened doomster like me quivering in my boots.

knocking one out

[BlasterBates]

http://www.independent.co.uk/news/bu...rk-822851.html



Add high inflation to this and what do you think might happen?

Like bagpuss said, not that many people can afford much more than a flat with the new (return to the old) lending regimes and with all the media finally suggesting prices are too high people will hold off buying. So house prices sales will stagnate but this should in turn lead on to some hefty falls in price IMO.

And those who are coming off old cheap fixed rates are getting a double whammy of higher living costs plus higher mortgage payments. So this could lead to higher repossessions, more properties coming on to the market, BTL'ers who got in late going under, emigration growing, sounds like the perfect recipe for a sharp downturn in house prices to me, will be very surprised to see "stagnation" of house prices over the next 12-24 months.

Doomed.

Great doom posting Ferret . Even has hardened doomster like me quivering in my boots.

[DiscoStu]

http://www.independent.co.uk/news/bu...rk-822851.html



Add high inflation to this and what do you think might happen?

Like bagpuss said, not that many people can afford much more than a flat with the new (return to the old) lending regimes and with all the media finally suggesting prices are too high people will hold off buying. So house prices sales will stagnate but this should in turn lead on to some hefty falls in price IMO.

And those who are coming off old cheap fixed rates are getting a double whammy of higher living costs plus higher mortgage payments. So this could lead to higher repossessions, more properties coming on to the market, BTL'ers who got in late going under, emigration growing, sounds like the perfect recipe for a sharp downturn in house prices to me, will be very surprised to see "stagnation" of house prices over the next 12-24 months.

Doomed.

Sounds good to me. At the moment we have this crazy situation where I pay £800 pm rent for a flat that would be costing me at least £1300 in mortgage payments if I'd bought it. Bring on the falls!

[ferret]

You're forgetting to factor in people coming off fixed rates from 2/3 years ago now not being able to get a decent mortgage deal, and payments going up.

Whilst I don't think we're in doom country, I think house prices will stagnate in the medium term which is an effective drop given the inflation we're living with at the moment.

http://www.independent.co.uk/news/bu...rk-822851.html

What does seem to be falling off a cliff is the housing market. As everyone knows we now have a small year-on-year decline in prices, but that conceals six months of gains and six months of losses. Look at prices on a six-month basis and prices are falling at an annual rate of around 9 per cent. Look at them on a three-month basis and annualise that, and the number for the Halifax index is minus 15.7 per cent. Those of us who expected either a plateau in prices or modest declines look like being wrong.

Add high inflation to this and what do you think might happen?

Like bagpuss said, not that many people can afford much more than a flat with the new (return to the old) lending regimes and with all the media finally suggesting prices are too high people will hold off buying. So house prices sales will stagnate but this should in turn lead on to some hefty falls in price IMO.

And those who are coming off old cheap fixed rates are getting a double whammy of higher living costs plus higher mortgage payments. So this could lead to higher repossessions, more properties coming on to the market, BTL'ers who got in late going under, emigration growing, sounds like the perfect recipe for a sharp downturn in house prices to me, will be very surprised to see "stagnation" of house prices over the next 12-24 months.

Doomed.

[Moscow Mule]

....
The major factor is whether borrowers can service their loans.
As long as they can they wont have a problem.
Things that will stop them is a big enough rise in interest rates or if they lose thier jobs.
...
When you can counter that then we may be in trouble.

You're forgetting to factor in people coming off fixed rates from 2/3 years ago now not being able to get a decent mortgage deal, and payments going up.

Whilst I don't think we're in doom country, I think house prices will stagnate in the medium term which is an effective drop given the inflation we're living with at the moment.

[The Lone Gunman]

How many times does it have to be explianed to you.

There may be a house price crash, but personaly I doubt it will be that bad.

The major factor is whether borrowers can service their loans.
As long as they can they wont have a problem.
Things that will stop them is a big enough rise in interest rates or if they lose thier jobs.
At the moment the BOE is keeping the base rate fairly stable and there does not (at the moment) seem to be a massive surge in unemployment.

If there is a drop in prices then the market will dry up. People who are in negative equity will sit tight and not sell thus restricting the availability of houses thus pushing the price back up.

While rates are manageable and there is no threat to jobs there will be no crash as such.

When you can counter that then we may be in trouble.

[TimberWolf]

Can't be true, Gormless said there would be no more boom and bust.

[sasguru]

My posts are more informative than most of the clutter on this board. They are aimed at adjusting the perception that that property is only a one way up investment. Too many people have relied on house prices rising, and the easy availablility to pile further debt up on top of rising prices in order to fund further investment on property or even their holidays and cars. Unfortuneately for them, the days of 'adding it to the mortgage' are over. This is likely to cause a correction similar or worse to the early '90s. This is a natural market reaction to over bought assets and should be welcomed by those FTB's and upgraders.

Lower prices will benefit most people. But, in any correction there will be casulties. Judging by the replies to this thread, it's hurting some of you big time. Many contractors have put everything into BTL and built up large debts. That may be some of you. I suspect that some of you are in denial about this. Maybe some of you will be ruined and have to start again. Let it be a lesson learnt.

Not the sharpest tool in the box, are you? So house prices are not a "one way up investment"? Whoopeddy do dah, when did that genius insight strike you, shyte for brains?

[Bagpuss]

Fine that you hold your own view that the market is going to fall, because you think (oddly) that there is a connection between average earnings and the average house price.

What's odd about that? there is a link between average house prices and average earnings. Traditionally lenders have lent on 3.5 price to earnings ratio and house prices have been to some extent restricted by this. As lenders started to ease conditions, letting more people self cert (lie) and increasing the multiples it's no longer possible for an average wage to purchase an average house price on a 3.5 ratio.

The banks are returning to the old ratio and removing self cert mortgages which begs the question, who will be buying the houses? There aren't enough people significantly outside modal incomes to keep the boom going. That's why the purchasing power of average incomes is so important.

Don't forget the average UK price in many areas will only buy a flat, it's hardly luxury living.

[snaw]

Now that's just the sort of thing AtW would have said.

I they aren't one and the same, they are certainly soul brothers.

I thought exactly the same thing when I read that sentence.

[bogeyman]

My posts are more informative than most of the clutter on this board...

Now that's just the sort of thing AtW would have said.

I they aren't one and the same, they are certainly soul brothers.