Wednesday, Jan 23, 2008
Negative equity ahoy
MoneyWeek: Prepare for negative equity and repossessions
2008 is going to be a very bad year for the housing market. First-time buyers will find it harder than ever to get on the ladder, but it's the homeowners perched precariously on its lowest rungs who should worry most.
Posted by mary @ 11:09 AM (735 views) Add Comment
5 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. jack c said...
Here's something to add to the first time buyer comment in the article -
Mform.co.uk has warned that changes to credit checks carried out by mortgage lenders will mean that more first-time buyers will be turned down for loans. Information relating to student loans will be incorporated into people’s credit files later this year. This means that missed payments to the student loan company will show up as a black mark on credit ratings. The average age of a first-time buyer is 29, and many of them will have student debts. Mform.co.uk says that plans to include people’s details of their student loan debts in their credit files are unfair because it will only include missed or defaulted payments. Therefore, any details of how you have made all of your student loan repayments will not be available to have a positive impact on your credit rating. Francis Ghiloni, marketing and business development director, Mform.co.uk, said lenders would be less willing to approve loans if they could see a history of missed payments. He added: “The average student can face debts of over £20,000 by the time they graduate, and their average starting salary is around £16,000. Given statistics like this, many students miss one or more of their student loan repayments, and this information will soon be made available to credit reference agencies and therefore the banks and financial services companies that use them.”
2. confused76 said...
The worst will be for the leveraged BTLetters (impacted by falling rents now that a glut of unsold properties is being moved into the rental sector) and for the overstretched first buyers who (unfortunately) may lose their job in a recession. There will be many bankruptcies and that will precipitate the market.
Look at the future of the market through the lenses of today's sale and rental stocks (both ballooning):
http://media.primelocation.com/content/priceindex/priceindex_200712.pdf
3. confused76 said...
This seals the fate of the London housing market:
"· Average weekly rental values stall in December, down 0.1% to £906.
· Average annual rental growth slows to just 1.4%, down from a peak of 11.9% in August. WOOOOOWW that is a real DROP from August!!!
· Record numbers of rental properties are on the market, although the 6.8% increase in volumes since November has slowed compared to recent months."
4. techieman said...
Confused - your quotes are from the primelocation. I'm interested oin your views re sub-prime location (for want of a better expression) is this / do you think these trends are mirror'd lower down the scale, or do you believe there will be a shift of renters from Prime to Sub-prime. Finally would this be mirror'd across subb-prime stratas. I'm interested in your view, although i can anticipate what it is - some statistical support akin to the quotes you have made, would be of interest.
5. it_is_going_with_a_bang said...
"..... making an unwelcome comeback."
It's very welcome as far as I am concerned.
After about 240% inflation a few % down and its reported as a terrible thing. What was terrible was letting it get to this situation in the first place.