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House Price Crash Forum


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About Froggy

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    HPC Newbie
  1. Because :1. without savings, there would be no lendings : fractional reserve system without reserve = bust. 2. Savings are funds for the banking system. They act as a stabilizer for the economy, hence the push to increase capital requirements from banks. 3. Prosperity based on ever increasing debt leads to bust, when the realization comes that the debt cannot be repaid unless something changes : the prosperity you are referring to is an illusion.
  2. Flat : £ 609 monthly payment + £ 400-500 "overpayment" (capital reimburshment) on a 108 k£ mortgage : he's on IO on the flat. This will increase when going into BTL, if he can even get it. House : 195.5k£ mortgage over 25 years = 6.5% rate on IO : hardly a low-risk according to the lender, IF he manages 15% deposit. I doubt he's going for repayment, given what he's done on the flat and the sticky details below. Now, some sticky details : - Says he pays 1000 £/month on the flat mortagae, with 609 £/month. Claims the difference is 500 £... - Vodafone engineer leaving Uni in 2005 now ha
  3. I'd say the mortgage cost you describe would get a bigger house @ 200k.Petrol is a bit high, I'd say the average should be 1k-1.5k p/a. In a few years time, you may look conservative, though. The rest makes sense (savings look appalingly low to me but that's the way of the world...). However, you missed one thing : childcare... As to how people manage, wait until IR reach 6%+ and you'll know (hint : look at the proportion of IO mortgages today...).
  4. Today's Dilbert reflects on the housing market projections in the US, with so many wages going down. Courtesy of www.dilbert.com
  5. As long as this roadshow ends with all those involved being gathered in an isolated farmhouse and cut into pieces by a maniac with a chainsaw, I'll look forward to it.
  6. I am of the opinion that the second part of the crash will be the nastiest, a combination of unemployment and rise in interest rates.I agree with the principle of your graphs but given the risk of inflation, you should make clear that the prices you refer to are non-inflation adjusted in the second. That means that I don't expect prices to fall in nominal terms by more than 5-10% of peak to the bottom, though I do expect them to fall by at least 45% peak-to-bottom in inlfation-adjusted terms. In short, I'd present the first graph as the one that really matters.
  7. Because this money is not for you.It's printed to reinflate bank balance sheets only. It's not going out of the financial sector. You see trucks and truck full of sand day in, day out, and wonder how big a castle you'll be able to build with it. Well, no castle : they're just dumping that sand into the ocean in an effort to fill it up.
  8. Seeing the damage sub-prime mortgages have done to balance sheets everywhere, it's fair to expect Alt-A and Option-Arm to generate at least as much. Actually, everyone could foresee risk in lending to subprime borrowers but I'm pretty sure no one saw that potential pitfall with the middle-class that took on most of the Alt-A and option-Arm. Therefore, considering as well that the whole system is much weaker now, I'd expect this next wave to be even nastier than the first. Not quite sure that there will be much of a rise in between but I definitely expect a second wave of house price and eco
  9. Regarding me overpaying : selective reading helps your argument a lot, doesn't it ? I gave you a picture of all comparable sales prices both before and after, so you can have a balanced view. If you are unwilling to look at it objectively, I see no point going further into that. And why the hell do you think I said you paid too much ? Defensive, much ? I'll just note again that you cling on a single SSTC offer on a single house at a price told to you by the vendor to contradict the example of a whole street, as well as the Halifax, Nationwide and Land Registry data. Some would have seen th
  10. My street is made mostly of the same types of 3-bed houses.According to www.houseprices.co.uk : - another similar house was bought 4 months after ours for 9% more - then another 16 months later for the same price (9% more than ours). - another, still similar, sold one year earlier for 7.5% less than our price. - again another sold 1.5 years earlier (summer 2002) for 15% less than us. We didn't make a killing but I don't think we overpaid (well, compared to others at the same time ; when we bought, I honestly thought we were buying at peak). I'm in East Surrey but I don't want to go into
  11. My house is not big but it is still a 3-bedroom in a quiet part of a Surrey town.One of our neighbours, who has a very similar one, is trying to sell with an asking price 8% above what we paid in 2004. I have no problem believing these figures.
  12. Sorry for completely missing that.RPI was 181.3 in 2003 and 214.8 in 2008. Having bought in Q1-2004, my house is now worth 18.5% less than it was at the time, RPI-adjusted. After a bit of research, RPI was 173.3 in 2001 and 176.2 in 2002, i.e. an increase of 24.0% from 2001 and 22.0% from 2002. The increase in price according to Nationwide from Q3-2002 was 21.45% (closest match). So, once RPI-adjusted, we are in fact already back to mid-2002. Sorry for the misleading title... Is there any way to change it ?
  13. Out of curiosity, I went to the Nationwide house price calculator. I then entered the price of my house, which I bought in Q1-2004 in "Outer South East". I then calculated its value today, i.e. Q1-2009. Low and behold : there was a 0.005% drop in price. We are officially back to 5 years ago now. With little in the way of stopping the fall, a return to 2000-2002 prices seems far from impossible. Just thought I'd share...
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