Twenty Something

Yup agreed. When it goes it will overshoot and then the whole cycle will start again. So comes an interesting time for anyone who is genuinely waiting in the sidelines - where do you jump in? When is enough of a drop enough, and will it have been worth the wait in terms of how many years you might be down the mortgage paying off process (for those that aren’t able to pay it all upfront from their Bitcoin gains of course).

It’s going to be quite a mixed picture though. Given the median LTV of uk mortgages is a shade over 70%, there are plenty of people who aren’t going to need 100% of their limit. Throw in BOMAD and whatever new HTB scheme might be introduced etc etc and it isn’t as clear cut as people can only afford 80% of what they can now. The existing stored wealth / equity may well be sufficient to stop any rapid and major unwinding. It’s not that I can’t see your perspective but it’s not in my view as straight forward as that.

Yeah fine, time moves along. I said a couple of years back (can’t be bothered finding the post again again) that I saw post general election as the time when prices might start to unwind. That might now have been brought forward, and to be honest if it has it suits me personally as I’m on a fixed rate until 2027 so let’s get the pain done now and recovery well underway before I need to remortgage. Thing is, I don’t see this going off a cliff. At present the volatile market is stalling lots of sales as mortgages are all over the place, but this will settle. When it does, it may well decrease affordability but this won’t be overnight. I still don’t reckon all said and done I’m that far out predicting 2026 might be when things have unwound.

I agree with you that it’s a possibility that prices could fall. I agree that with the latest developments the probability of this has increased. Will it be 30%? Maybe as that would roughly match 2007-10 or thereabouts, but I see that as the upper limit as opposed to a lower. As for the rest of it, well you were pretty confident you had my number marked, so I replied in kind as it pretty succinctly demonstrates my point that this site is more concerned with putting everyone in little boxes as opposed to digesting what’s being said. I’ve pretty consistently called things right over the past few years. I said C19 won’t cause a crash, I said Brexit wouldn’t, i predicted in the 2020, 2021 and 2022 threads that prices would be higher in a years time, and what has happened? I said until you get raising interest rates then nothing will change. Now we have rising interest rates then things are changing, but it’s neater for the simpletons on here (not you) to just post troll or vested interest as opposed to questioning themselves. It’s why I posted at the end it’s hilarious that you are insinuating it is myself who is incapable of changing their mind, and why I linked you to the post from a few days ago.

Which all just goes to prove that nobody here actually reads what I write, but rather what they want to believe / what suits their current emotion. From a few days ago: Find me the post that I’ve made which backs up the interpretation you’ve made above. It’s also quite ironic you should try and accuse me of being incapable of changing my mind given the majority of this forum has been repeatedly posting for decades about just you wait a few months despite all the evidence pointing towards continued HPI. Hilarious.

Thing is that if people here had made the choice to rent vs buying then there wouldn’t be so much emotion. It’d be a more factual and reasoned debate, and some might even put their hand up and say yup, I’ve called it all wrong the past 15 years. The reality is that for many they had no choice and hence the amount of anger and jealousy aimed at anyone who has brought or who is getting on with life. If prices crash 30% at warp speed many here still won’t be able to afford to buy however much they protest they have hundreds of grands stashed in various bank accounts. It’s purely a case of I can’t have it therefore nobody can. It’s easy to wish for the collapse of the western world if you have little stake in it.

In all honesty I’ve picked up the hospital lurgy so have a bit of a sore throat and fatigue. Anything specific you’d like to know or??

You have to be the epitome of the Dunning-Kruger effect. You had to have the basics of help to buy mortgages explained carefully to you not all that long ago, but of course you are quite the smug little fountain of knowledge hey?

The irony is palpable from someone who’s said: You’ve been asked to explain yourself and you can’t so you’ve gone off sulking. Speaking of usernames I’m a bit confused by yours. No house price crash in the uk? You seem more than a bit confused…

So someone with 50% equity built up in their property can’t get a couple of hundred k mortgage to buy my house if I wanted to sell? Or BOMAD can’t give their daughter a large deposit? Not everyone needs anywhere near their full borrowing potential. Last stats I posted show that only 4% of mortgage business is at LTV of 90% or worse. Average is 70%, so there is clearly plenty of equity in the market still as per all the sold signs. You’re generalising way too much. I still return to the question of you know all this for certain because???

You said: So I’m asking you where you have got 50% from and how do you know the future? You’re saying that my property will be worth 50% less than my mortgage figure. Are you saying that is the case right now? If so you are demonstrably wrong. If you are saying in the future then see original reply

So you’re not going to answer the question. Where have you got 50% from and how do you know the future?

I don’t want to sell however. All I care about is affording my monthly payment. That is it. May this may that. We can be here for the next year going through the various permutations of life. What if you get ill, what if you lose your job, what if nukes start flying, what about my mate whose wife had an affair and took the house and kids. I do believe I’ll be fine yes, and if I’m not then I’ll deal with whatever whenever.

I have? How have you arrived at 50%, and how do you know the future?

Why would it be wrong to estimate current value based on recent comparables? The people buying houses in my locale certainly haven’t got your memo that prices have crashed 30% overnight or whatever your prediction is. Whereas we can probably agree prices are now more likely to go down than up in the short to mid term, the extent of that is anyone’s guess. Anyway, I’m on a fix at a shade over one and a half percent until 2027 so if this is ‘the crash’ then it couldn’t have come at a better time - not going to make the slightest difference to me for the next 4.5 years.

Without having seen the piece it’s quite hard to give thoughts, but my understanding is that the suggestion is that if rates remain where they are then Oxford economics sees a 30% fall in prices? Back to a bit of a crystal ball argument again, but sure, if rates spend a few years at 6% plus then it’s hard not to see a drop in prices occurring. 30%? Well why not I guess as it’s roughly what happened in 2008. If it plays out like that then it will be a few years sooner than I thought significant falls would occur (thought post GE 25/26 time), but such is life. For me personally a 30% drop would take me back to about where I was financially when I brought in early 2020 based on capital I’ve paid off and recent sold prices on my street. It will have varying degrees of significance on everyone from nothing to repossession and everything inbetween.

Well that’s me told. Something really hit a nerve here comrade. To the gulags with me.

That made me chuckle to be fair. Typed in the sort of sneering condescending tone that one encounters in the middle of the guardian comments section. As Thatcher once said, the problem with socialism is you eventually run out of other people’s money. Probably why it worked so well just after the war when the country needed rebuilding both literally and metaphorically. Eventually turned us into the sick man of Europe though hey…

Tonight’s radical left wing post is brought to you by the letter S for Stalin, and the number 0 for the number of times socialism has worked.

There's people on here who have been 'waiting' with their alleged multi-million pound stocks and shares portfolio / bitcoin / gold / whatever else for the best part of 20 years. Don't be like those people. You have done absolutely the right thing. From memory you spent last winter in a caravan in Wales didn't you? Screw that - I'm sure you will be far more comfortable this year! You say there's going to be an almighty crash, and maybe you are right, but if you've brought and paid for your new place in cash then really who cares. Enjoy your lives as much as your pension allows and forget about what might have been if only you'd just waited a year, then another year, then another year....

I get it now that we have unpicked the original post yes - far from alone on this thread...There's going to be some pain. I guess we have to wait and see how much depending on how bad things get ranging from the armageddon that this forum wants to a small bump in the road.

It appears that you are finding out why there has been naff all point in waiting for the crash. If prices fall, rising interest rates will mean you are still unable to afford to buy a property. So you’ve got to pin your hopes on the crash to end all crashes to bring prices down to where you can just about afford something, but how many years are you going to have waited even if this scenario does play out?

Ok agreed when put like that - I'll go with @Gurgle's summary of the situation as 'semantics'. If you have less ability to leverage your deposit then it will limit your loan size.

No I'm not saying that someone can find 150k of spare cash lying around. You are not answering the question. Your original post is below: When the bank is assessing what it will lend you, it is looking at your salary, debts and affordability. It will say that it will lend you up to <whatever> amount based upon your salary of <whatever> x 4.5 as a general rule of thumb. This number does not change whatever the LTV amount is. To use your example above: If the bank will lend you 300k then you have a salary of £66,666 per annum. If you are trying to buy a 300k house, you will need: @90% LTV a deposit of £30,000 and then a mortgage of £270,000 which is fine. @80% LTV a deposit of £60,000 and then a mortgage of £240,000 which is even more fine. @70% LTV a deposit of £90,000 and then a mortgage of £210,000 which is even more more fine. If you cannot find the extra money for the deposit, then you can't borrow at all. So, if you have a 10% deposit and the bank demands 20% then you can borrow nothing. You can't borrow half. You can't borrow a quarter, you can't borrow anything. What I am asking (again) is for you to show where the correlation is between LTV's falling and what you can borrow halving.

We've established what the OP was talking about!?