Monday, Oct 08, 2007
No suprises here
BBC: Homes sold to 'poor debtors'
Again, this cutting edge jouranlism, 5 years too late, will not suprise the regular "doomsters" (inappropriate media label)
here, but I'm guessing "sub prime" mortgages in the UK is a LOT higher than 8%.
Posted by doomwatch @ 10:03 AM (2421 views) Add Comment
26 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. planning4acrash said...
Unrelated, but, property snake is already up from 70,000 properties Friday to 76,000 today (monday).
2. speculatorone said...
How long has property snake been back in action? I thought it had been closed down by the greedy estate agents.
3. Onyerhike said...
I went into that site for the first time on Friday and was shocked to see how many properties were on there from my home town. A year ago, things weren't on the market for more than a week - now there are 10 pages from my postcode. Imagine how many more it would be if the EAs hadn't put the boot in ! I might actually be able to afford somewhere to live when I return to the UK.
4. doomwatch said...
Given that property is now taking months to shift, it at all, and now "discounting" is back, I would imagine that EAs will
want their details back on snake ASAP, otherwise they'll be out of a job by Jan; forget the so-called "Spring bounce" that they
are all praying for and peddling at the moment.
Will the Forkstons minis be a collectors item ? Personally I'd want it re-spraying as I wouldn't want to be associated with such a "brand"
5. planning4acrash said...
Propertysnake never shut, but some websites aren't letting them post links and photo's of buildings. That is still happening. EA's may change their policies if they panick and need to publicise price reductions to shift stock and obtain commissions.
6. dohousescrashinthewoods said...
So the difference between the US and the UK is that here we just deny we have sub-prime, or illegally disguise the fact at the request of trusted mortgage advisers.
Makes the US seem positively straight and uncorrupted by comparison!
7. hoyo said...
Panorama tonight should be worth a look it's called Sub-Prime Suspect investigating mortgages sold to people on benefits & bad credit records with loans up to get this............. 16x income !!!!
8. doomwatch said...
I can't help thinkingg that this Panorama programme will try give the impression that the UK sub-prime problem is just
restricted to a bunch of people who can't turn on a calculator, and that we won't have anything like the misery that
is pulling down prices in the US. Maybe it's years of positive spin, but I still don't trust the BBC to give a true picture
of the over priced housing mess and debt in this country ? I hope I'm proved wrong.
9. uncle chris said...
I've just found out that a local couple (at our previous rented house) have just had to put their primary home on the market for £750,000 because both of their property developments are not selling. He runs an IT business from home, so I suspect is self-certified, but has somehow accrued £900,000 in mortgages on 3 properties. The latest property he apparently bought last year for £500,000, and after renovation, has just had to reduce its selling price to the same level (i.e. taking a big loss on stamp duty, fees etc.) because not one person has come to see it in 5 months. The local agent also told him he wouldn't even get half the amount in rent needed to cover the mortgage on it. My point is that it isn't just low-income, low-IQ people that are in serious financial trouble because of overstretching themselves, and that sub-prime in the UK runs right through all levels of society.
It's a shame, because they appear genuinely nice people (more naive than greedy), and have 4 kids to support, so I don't like to mention how much trouble I think they are in. You can see the stress it is causing them already, but I suspect I would be sent to Coventry if I suggested they accept big losses and downsize before it's too late. I'll leave that to the greedy banks that helped/encouraged them into these problems in the first place.
10. Cstanhope707 said...
Just wait for the Taxpayer Funded Bail Out which I have been predicting for some time now. Mind you a huge backlash is happening in the US over the US Sub Prime Bail out. And why not why should prudent Taxpayers who did not take stupid risks bail out those that did.
By the way planning4acrash I looked on PropertySnake, I thought this site was being sued by the Estate Agents and could no longer list properties, I have been out of the picture for a little bit what happened, good news ayway.
11. japanese uncle said...
Given that EAs make money not by making their clients richer, but merely by shifting the ownerhsip of houses. So when the market turns bearish, they are likely to encourage house owners to aggressively discount, to prompt deals, accelerating the crash. Is this logic valid?
12. planning4acrash said...
JU, you are spot on. Once house price falls pick up momentum, the cycle is self reinforcing for a number of reasons such as that, in the same way that a bull market becomes a self reinforcing speculative run. So a crash is a race to the bottom that can be prolonged by dropping interest rates, but to the bottom it shall go nonetheless, until first time buyers are priced in and can pick up the batton.
13. voiceofreason said...
Uncle Chris @9. When I was in sixth form / university in the late 80s, exactly the same thing happened to parents of a good friend of mine.
They had a very nice 4 bed detached. Built a "Villa" in the garden. Went massively over spec and cpompleted in late 88 / early 89.
Couldn't sell it. Ended up selling both the "Villa" and their 4 bed and moving into a 3 bed terraced in need of renovation, which they are still in to this day.
JU @ 11. Indeed, I just went into Wooley and Wallace in Romsey and enquired about some £500K properties. The lady behind the desk said. Of course, all these are very open to offer. She also said she didn't see what all the fuss was about with falling prices. You sell yours for less, but buy the next one for less too :-)
14. doomwatch said...
Uncle Chris, this is precisely my point. My concern is that the Panorama "investigation" will portray that UK "sub-prime" is restricted to a load
of council house and poor credit people. In essence telling to rest of the country, "don't worry, it only happens
to these wasters, who were mis-sold mortgages by just a hand full of bad people." Go back to sleep Britain, keep binge drinking
and watching X Farse.
15. mrmickey said...
Yes once houseprices start to fall fear will drive the market from then on with prices accelerating downwards until average houseprices start to come back in line with average wages. I think that the banking system will be so badly damaged by the coming debacle that securing a mortgage in the future will become very difficult and this will ultimately supress houseprices further.
16. nacho99 said...
Any opinions on what effect the internet will have? During the last crash no body had ever heard of it.
17. rocket robbie said...
Is anybody worried that if the IR fall then the market will be re-ignited??
Also my dad has three BTL flats and has no intention of selling. If the majority of BTLers think along the same line will the crash still happen??
18. cyril said...
Rocket Robbie - the more BTLs hang on, the less severe the crash. But if the value goes down, people will start going bankrupt if they've got a big mortgage. So they won't be able to hang on long, if the prices start going down.
19. planning4acrash said...
nacho99, I don't think the internet matters at all, except that it will create new divides, those with better access/understanding of the internet will be more informed and be able to effectively bet on falling prices, but the housing market as a whole will be unaffected because they are high so long as banks lend enough money to support prices. They control the money supply, their confidence in the ability of people to pay will be the deciding factor, foreclosures and the assessed risk of foreclosure will be the thing to watch, because mortgage companies don't really care about those hard up who can pay. People overestimate their influence on the system and forget that they are part of THE MATRIX, take the red pill or the blue?!
20. planning4acrash said...
But the matrix is designed to make people think that they have influence to avoid social unrest. Radicalism is dead and we need a new punk/hippy revolution!!
21. harold said...
"...we need a new punk/hippy revolution!!"
Err, no - if people want to drop out and do drugs, that's fine - but what we need are banking practices to be abolished and reformed root and branch. A pot-induced daze is all very well, but the revolution is going to require people with a clear head who can understand how we are all being shafted.
22. inbreda said...
Put it this way rocket robbie....
I don't know whether the rent from your dads BTL covers the mortgage (+opportunity cost of not having the profit in the bank earning interest), but assuming it just covers this, then consider if prices stagnate. Even if they stagnate for years without going down. 5 years from now he might be wondering why he is bothering. geetting calls from the tenants every time the cooker or central heating break. Paying for maintenance. And with no capital appreciation. It will be a dull place to invest. And if prices come down - even a little bit - his investments are so geared that he will likely lose all of his investment (in terms of the cash he put forward as deposit). Years of bad news and no positive news in sight and even your old man might consider doing something more worthwhile.
Sounds to me like he thinks you can't go wrong with property. He will probably be true to his word until such time as his opinion about property being a one-way bet is changed. And that day may not be too far off.
23. rocket robbie said...
Well put Inbreda, im not very good at arguing the point with him but uv gave me a few pointers to throw at him. He bought all three between 5 - 8 years ago so has plenty of equity. I told him to sell last year but he wouldn't have it. I just hope he don't live to regret that decision.
24. Flamepoint said...
nacho99 on your question "Any opinions on what effect the internet will have?"
There are some useful tools now to help understand what's going on such as this one which will show you how Rightmove is fairing:
http://www.alexa.com/data/details/traffic_details?q=&url=www.rightmove.co.uk
Those were not available last time around.
25. Nerble said...
Japanese uncle, spot on. Every £10,000 off the price is only £150-£200 off a typical estate agent fee. Prepare for the EAs to push prices down. I think that I read Morgan Kelly say that an agent in Dublin told him that he'd sold 100 properties this year c.f. 3000 last year in the same period, I bet that he is not advising his clients to hold out.
26. planning4acrash said...
The association of punk and hippydom with drugs is a vested interest argument, because we all know that radicals do not have a monopoly on substance abuse. The middle and upper classes are all at it with their cocaine, champaign and pot, but we don't rubbish capitalists simply for their drugs of choice, no, being a hippy is about deciding that the system doesn't work and trying to find a way to live outside the system, beyond monetary wealth, beyond corruption. Being a punk is about fighting the system. Both have the same objective. If you want to abolish bank practices and bring monetary creation into democratic hands (end capitalism as we know it) then you are a punk.