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House Price Crash Forum

djmuk100

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About djmuk100

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  1. From the inside.... very simply, banks have being doing their risk assessment properly this time. They estimate house prices are going to drop around another 25%. So not to be left with debt, they are asking 25% to cover their themselves!
  2. I cannot believe that the Government has for many years prior to the recession been stating that it was trying to provide a stable economy whilst it was allowing house prices to escalate to such ridiculous figures. You cannot have a stable economy with boom busts in house prices. Past experience and statistics should have taught the government and experts this prior to this recession. Only when there is a stable growth in house prices in line with inflation, will there ever be a stable economy. What is required: House prices brought back in to the figures measuring the economy's inflation Regulation on borrowing Regulation on estate agents Quite simply, the bare essentials in life are food, water and shelter. Therefore any government that allows prices of shelter to grow to such unaffordable figures are quite simply being irresponsible in their elected role.
  3. The reality of house prices was simply a factor of the lending and earnings ratio. Over the last 10 years we have seen banks lend way above what was sensible. This has mainly been due their own stupidity for trying to attract more business. Consequently people could afford more and this pushed up house prices. We are now experiencing the recession and a crash purely due to: * the finacial industry having got their fingers burnt (remember the Credit Crunch all started from the Bank of America) * the government for creating a false economy (housing was all the UK had, after all the manufacturing went abroad, our economy was purely built on service and housing) Financial companies will now only lend what is sensible again. The lending rate used to be three times your salary for a mortgage. The average salary in the UK is £30,000 and they are not going up mainly due to cheap labour (Polish etc) and recession (redundancies). The average house price is £168,000, wheras the average affordable house is £90,000 on today's lending terms. Therefore we need to see a drop of another 45% on top of the drops in the last year till house prices become affordable again. Using statistics, house prices have only tended to pick up when the earnings ratio was 2.5 times salary never mind 3 times salary. As you can see, this is going to be a long one. It is unlikely that the UK will not see increases in house prices till at least 2013 and this is only if we start to see a growth again in manufacturing and employment.
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