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House Price Crash Forum

Twenty Something

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  1. Is there a correlation you can provide evidence of between the age of the mortgage and LTV? What about BOMAD loans where someone is gifted 30% of the value of the house, but it's 22 year old Johnny's first mortgage? New HTB mortgages where the government is in for 20 - 40% therefore putting people at 80% LTV at worst? Inheritance? It is likely newer entrants have higher LTV's I would agree, but you seem to have taken an absolutist stance by saying higher risk mortgages will all be newer? It is only around 4% of mortgages that have an LTV above 90%. https://www.fca.org.uk/data/commentary-mortgage-lending-statistics-q4-2021 If anything this would say that there are a significant number of people with significant ability to ride out price falls, and the high risk individuals as you see them account for a very small percentage of the market. Your three points above all speak to this 4% as I see it, and even then I struggle to see how you can make any sort of assumptions about their ability to ride out negative equity or job losses? Some will no doubt go to the wall and some won't just as some who own homes outright may do due to building up debt and so on.
  2. Kind of depends on your definition of a crash though doesn't it? It surely has to be rapid and devastating - the crypto market is currently crashing as an example as in a devastating fall over a short period of time. I think you are describing a fall above - a creeping inability of new market entrants to meet the values requested and therefore a buyers market with a gradual creep down in value. 2008 was along these lines - just under 30% top to bottom in 3 years wasn't it? When you say crash, what numbers are we talking? And to be specific, what percentage drop against Halifax / Nationwide / ?? Index you want and in what time scale?
  3. Whether or not I have overpaid for my house doesn't cross my mind. I don't recall having argued with anyone about that on here? Surrounding myself with those who think differently to me is I think quite valuable however in understanding the entire picture rather than just what I want to believe. Project cinema is going to take a while, but yeah I think it will be pretty awesome ta.
  4. Dunno. It doesn’t cross my mind. It’s an outgoing I pay and in 20 years time or so I’ll jointly own a house and pay nothing more to anyone for the roof over my head. Could I have paid less in ten years time? Time will tell but by the time you add in 150 grand of rental payments, inflation, whatever else then really what am I (or anyone else) waiting for? And in the meantime I get security of tenure and I’m thoroughly enjoying building my cinema room in the garden.
  5. I was taking about the general in that as I put it I think most home owners have significant ability to absorb financial problems. The affordability check is being scrapped anyway isn’t it? https://www.bankofengland.co.uk/news/2022/february/consultation-on-proposal-to-withdraw-fpcs-mortgage-affordability-test-published As for distribution of borrowers, I agree and this is why I don’t think the majority are going to be in trouble. I see it as a bell shaped curve and at each end you have those on easy street, and conversely those in a pickle. The bulk of borrowers however will be in the middle and to its left and right. Recent data I saw shows about 0.8% of borrowers are behind on payments. You can argue that this number is going to increase over the coming years, but will it be enough to bring you your crash?
  6. Things are going to have to get really really really bad for your idea to become a factor. As a case in point, our mortgage accounts for about 27% of our take home pay after tax. If rates were to hit 3% ontop of our banks current SVR, that would put us at about 7.5%, and from a cursory calculation, our mortgage payment would then be about 45% of our net salaries. At 10% interest rate, this would rise to about 55%. We are also relatively recent buyers, so we aren't anywhere near 60% LTV where we get the best deals. It would certainly not be a great situation for us, but the point being even at 10% interest we would still have plenty left over for bills and food. I don't suspect that we are alone either as everyone taking a mortgage recently will have been put through similar affordability tests. Sure they might have gone out subsequently and gone crazy on loans and holidays, but this will be a tiny minority I would suggest. There will always be some who hit problems, but I think most homeowners have significant ability to absorb financial trouble unless some large catastrophe strikes.
  7. You're quite quickly going to start accumulating costs however - appointing a solicitor / conveyancer, searches, survey and report and so on. Sure you can perhaps sit for a couple of weeks but any estate agent keen for their commission is going to be sending you a memorandum of sale in the next 48 hours and asking who you have appointed to start the legal side. Seems an odd strategy to commit to buying but not really. Sure you can pull out anytime before exchange, but you are not going to be able to delay spending money for too long I wouldn't say. Say now is the peak and you are all about to get your falls, so what? If this is somewhere you are buying for the medium to long term then the price will recover. Sure if you had a crystal ball and knew it would be cheaper in a couple of years time you might be advised to wait it out, but even then how much money are you going to be down in rental payments vs paying off the capital from your mortgage? From what you're posting you don't really care about the property, and in that case you should just pull out as you ultimately won't be happy there.
  8. I mean, I'm just going to put it out there (despite you not being able to see my posts as you've blocked me remember), you are the last person on here with the right to be offended about any home truths. Your posting history is full of cursing, putting people down, offensive remarks and various other things. You are also one of the worst offenders for posting about your 20k a month oil share profits, the hundred and whatever grand you made off Royal Mail shares, how you have shorted right move and how anyone who doesn't agree with you is a troll (and far worse). Quite happy to dish it out, but don't like a mirror being held up to you hey? And I stand by what I put - the number of people purporting to be sitting on fortunes here (yourself very much included) is staggering, and you know what, the whiff is far more pungent here than on mumsnet. As per a recent back and forth with sta100 I believe it was - if you are so rich, why so much anger? I know the answer, and I suspect many here do too.
  9. Well 99% of this forum are (allegedly) hugely successful stock traders, IT guys on 300k per annum or business owners living in huge houses. The parallels about a whiff of made up are striking.
  10. Oh please. Given your posting history spare me the faux indignation. China is your answer as in the Chinese are going to buy up all the property in the uk? Or is it that they’re going to cause a crash somehow? Or it’s not China? Well and truly have no idea what point you’re making I’m afraid.
  11. You reckon central government deals with money the same way you and I do? Need some QE, print it, need to send money to Ukraine for weapons, oh we found a few hundred million behind the sofa, need hundreds of millions to bail out the banks in 2008, sure here it is. You have pretty much word for word put what @Warlordsaid to me some two and a bit years ago - they’re out of bullets, there is nothing more they can do. You reckon there’s nothing they can find to ‘help’ more younguns get on the housing market?
  12. What do you all reckon will happen to house prices then as the government ‘helps’ more people to buy a home?
  13. I'm sure I recently found a more up to date version of this, but in essence most mortgages are for 5 years fixed or more (BOE, 2020). https://www.bankofengland.co.uk/bank-overground/2020/why-are-more-borrowers-choosing-long-term-fixed-rate-mortgage-products This raised my eyebrows when it was pointed out by another poster that this meant that stress tests were not a requirement as rates of five years or more are not covered by mortgage affordability rules. It doesn't seem as though from that article that this is being particularly abused, but you'll draw your own conclusions. Chart 3 from the FCA shows that in the latest reportable quarter, only 4.1% of advances were at 90% LTV or higher. Chart 4 shows that 50% or so of borrowers are classed as borrowing at high income to loan values. https://www.fca.org.uk/data/commentary-mortgage-lending-statistics-q4-2021 What this says to me is that for 96% of mortgaged properties there is a lot of scope to absorb negative equity. Although 50% of borrowers being classed as in the high income to loan value bracket, this is defined as single income of 4x and over and joint of 3 x gross income and over. Then there are the ten percent or so at the top of that who may get into trouble as their income multiple is higher than that. What I deduce is that if the fun times for this site happened today then 4% of mortgaged homes would be in immediate danger of negative equity, and some 10% of borrowers who are on high income multiples would fall into difficulty. This to me says that the vast majority of people are going to be just fine. It could of course be argued that those small figures are all that is needed to start toppling the deck of cards, and that could be the case, but as I have posted repeatedly I think middle class suburbia will just shrug its shoulders and carry on. Will such small numbers of distressed sellers be the butterfly's wings that start the hurricane, or will they be like a fly hitting the windscreen of the HPI juggernaut?
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