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House Price Crash Forum


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Everything posted by margamboy

  1. To date there is only one bunch of people who have cost many potential homeowners greater monthly repayments and thats the like of you my friend, If they had only bought back in 2003 then many would be sitting alot prettier whatever route they took. Those who held out and have now come to a point where they can no longer wait I feel really sorry for having to pay 20% more for a property and increased IR.
  2. I would not say your mad at all, In fact having read this forum and articles in the media you are in a good position to make your own mind up. If you can afford the repayments now but are unsure of IR rises then Nationwide offer a 25 year fixed deal at I think 5.25%, With a 10 year tie in Good luck
  3. How about this sceanrio to even things out a bit Average wages for the area £420 a week gross So I think it could be safe to say come 32-35 years of age a couple earning approx £50,000 between them could afford this 5 bed house in a nice area with £50,000 deposit http://www.rightmove.co.uk/viewdetails-150...=1&tr_t=buy £50,000 deposit leaves £200,000 mortgage....25 year repayment £1220 PCM around 1/3 of take home pay Wife wants children then go IO £798 whilst she is off work or when maternity payment stops There are cheaper options also http://www.rightmove.co.uk/viewdetails-150...=2&tr_t=buy £571.85 repayment or £399 IO http://www.rightmove.co.uk/viewdetails-150...=3&tr_t=buy £686.22 repayment or £479 IO
  4. But what if borrowing is kept low (5-6%) for say the next 3 years and we do not get anywhere near the 15% IR seen previously, I assume this would delay a HPC/Correction but what of the longer implications. I think the market is very different this time around:- Trends cannot be relied on Last HPC - A Fixed rate mortgage was no existant, over night everyones mortgage increased. Not this time..25 year fixed deals now available at very low rates Last HPC - Far fewer BTLs, Those renting are not suddenly going to ditch their rental as buying in a falling market is pointless. So Landlords hold on to their property and rent keeps coming in maybe supplemented by the LL Last HPC - Almost everything was more expensive than today, TVs , Microwaves , Food ,Clothes , Cars , Holidays , DIY products Last HPC - Financial products in general were not so widespread and available, Choice of mortgages , Credit cards , Can easily extend your mortgage, Switch between IO and repayment, overpay etc Last HPC - Changing your Gas/Electric supplier could not be done for a cheaper option Last HPC - There was little immigration, All need houses!!! Last HPC - Higher unemployment Last HPC - A large number of households had only 1 person working full time Last HPC - Fewer people going to university from here and overseas To me at the moment there is no trigger at the moment to change the current HPI situation Trends are just that trends, Things change, peoples ways of thinking change The graphs are in the past, I dont think they are conclusive enough to prove another crash is on the way, When in reality only once we have ever had a crash before. All others prices never went negative.
  5. I tend to agree, The last thing this governemnt wants is a HPC, It would be a disaster for them and for many families. The problem is that Gordon Brown keeps saying no more boom and bust and he truely believes it, But the problem is he may not be able to do anything about it, But he will do everything he can to try prevent it. He will pull out all the stops to hold out till the next general election, try to cool the market by increasing IR quarterly by 0.25 until we reach around 6.5%, this should see us mid 2008. A fall of 20% will not be seen as a crash just a minor correction and thats what they'll preach, its good for business etc.... Within 5 years prices will be 20% less than today on average so real terms far more. But over the next year we will continue to see HPI as many try to secure low IR deals before affordability in their eyes becomes out of reach as they see IR and prices continuing to rise........Mid 2008 the signs wil start to show, 6.5% IR. Over the following 4 years prices will fall on average 5% a year until we reach a point where affordibility becomes within sight of many ftb and maybe lower IR (2012)......Then the market begins all over again With the next 5 years of 1-2% HPI and then we hit boom time again around (2017) Current house prices will not be seen again until around 2020 Well its my take anyway
  6. A matter of time before countrywide we see an increase, its been on the cards for a long long time. Builders are charging more to repair your home Council tax rising because the value of your home Mortgage payments increasing because of rate rises But Rents are the same as 4 -5 years ago...Its gonna end soon
  7. My view on the market and borrowing in general As a rule your mortgage repayments should be no more than 1/3 of your wages, joint or otherwise. So someone with a £1500 take home pay would be looking at a £500 a month mortgage, for a couple on the same money i.e £3000 a month take home a £1000 a month mortgage Every individuals circumstances are different, So it is not as clear cut as a ratio to earnings. The mortgage on my first house I bought was only 30% of my take home pay but my second house 50%, Because I was contracting at the time and making overpayments every 3 months so over the year it even out. It also depends on external factors such as distance to work, Do you need 2 cars or just the 1, Current debt levels, Future employment, promotion , Age , Children. As for the market, I think we are still a year or so away from a HPC, but I think it will be more like a correction in real terms. It will be 4-5 years until it bottoms and even then there will be a point when wages meet falling prices. Current house prices overall will be approx 20% less in 5 years, Average house price today £177,000 will be £143,000 by 2012....So in real terms the fall will be greater than 20%. IR will probably sit around the 6.5-7% mark for some time during this period
  8. I recently bought a car up that way, Newport pagnell..Lovely place
  9. Just caught the end of the news, Going through the papers etc and said that the city has priced in a hold for tomorrow on IR. But there will be further pressure to raise next month. Still mortgages fixed for 2 years at 4.75% , 10 year at 5.35% and 25 years at 5.25% deals available, Does make you think!!!
  10. I am only going by the graph from the land registry, I see no drop off towards the end of last year on there. It is quite normal to have a slow down on the run up to Christmas and a pick up in the spring this is nothing unusual. If I was to predict a HPC I would say 4-5 years to bottom out, Roughly the same time it took for us to get to these prices. But somewhere along the downward spiral wages etc are going to meet so we could be looking at around 30% (5% per annum) less than current prices today overall with an IR around 7%. There are many other factors but going on todays information currently available Also remember that a 100% increase in prices is a 50% drop.
  11. Motley fool view of things There is a one word answer to this: Inflation. The boffins on The Bank of England's Monetary Policy Committee (MPC) have been tasked to keep inflation somewhere between 1 and 3%*. To achieve this aim, they can raise and reduce the base rate. If the MPC increases the base rate, money becomes effectively becomes more expensive and the supply of money in the economy falls. With less money in the economy, demand for goods and services falls and price rises should slow. In other words, inflation should come down. The MPC looks at several factors when it makes its decision: House prices. High house prices make people feel richer and thus more likely to spend. House price inflation fell in February; if that trend has continued in March, a rate rise is less likely. Exports. In January UK exports reached their highest level since January 2004. Increased exports boost inflation, so the MPC will be studying the data for March closely. Pay rises. Big pay rises often boost prices. The data for January was inconclusive on this, but if the MPC thinks pay is rising too fast, they could jack up the base rate in response. Employment. If unemployment is low, pay is more likely to rise fast. Once again, January's data was inconclusive. Money supply. Broad money grew at an annual rate of 13% in January. If that growth rate persists, the chances of further base rate rises look high.
  12. My brother just sold 2 houses he bought in September/November, I know he made in excess of £30k between the 2 after all work was carried out.
  13. Nice article, But when someone trys to spin articles to suit I get suspicious. Is this the only 1...... Prices are increasing in London, Source Land registry
  14. There still seems to be activity around Neath / Port Talbot / Swansea / Bridgend / Cardiff, Quite alot of sold signs but there are many houses that seem to have been on the market a while. Usually £200k plus, anything under £130,000 and its snapped up pretty sharpish from my observations. Back to the original post, I have a mate from Carmarthen and he sold up 2 of his btls recently. Were on the market i remember him saying between 6 and 8 weeks, 1 was in St Clears the other in Haverfordwest. He did say things have slowed though, but from what he recalls the same thing this time last year. If it does not pick up by May he will be paying closer attention. Hips will be a factor good or bad I do not know
  15. £299,000, Don't know the area but this is steep......No wonder they are not selling. Ad in the paper 20% discount and they will be gone, Builders just need to adjust their end of year figures. Some have really lost the plot
  16. If one of the bulls arguments for HPI is that of immigration and many bears believe the supply / demand thing is a myth then surely this article shows that a HPC on the scale talked about on this forum is not going to happen, as the number requiring housing has most defineltly increased in the past 5 years and shall continue to do so, This includes many FTBs currently priced out and renting/Living at home beyond what some see the average age of flying the nest etc. We may get a 20% correction but there must still be greater demand for (The right kind) of housing now than before the boom. I still believe that if prices begin to head downward many will buy before the bottom, People say you do not buy in a falling market, but many will also not commit on a timeline for the bottom.That would be almost impossible to predict. So if someone has put off buying for 5 years and over the next 2 years sees a 20% average drop in prices thats a total of 7 years waiting are they going to wait to see if things drop further or may they buy in case prices begin to turn again. Example of a possible crash scenario Property in certain parts of the country fall 5% next year and 5% year after and 10% the year after that then IR fall so prices stagnate for a 6-8 months, Will prices fall again or will they rise?, its gonna be interesting to see. I understand the wider economic picture will have factors, IR , Unemployment at the time etc......But this is just a simple scenario
  17. Mad thing and truth is somebody will buy it, Probably a builder...Spent £50K and sell it virtually brand new for £200k. It will make a nice for someone once refurbed
  18. Exactly you have answered your own question, IF these people had bought at 22 (13 years ago) they would of had a house for a quarter of what its value is today. The question is why did'nt they buy then, Because the generation of the last 10 years had a different outlook.........You have seen the programs on TV, Binge drinking , Club reps , Ibiza uncovered. They thought they could do this and then suddenly grow up by the time they hit 30 and buy a house when many more sensible bought when they were in their early twenties, in this life you cannot have it all. Now they look at homeowners who bought then and filled with envy.......But they made sacrifies back then and now reap the rewards. Its hard to take in for many but its true and I heard the same thing this morning in the travel agents. I am 38 and on my 3rd house, less than 6 years to go on the mortgage......Now I can go skiing twice a year and have the new cars. Some people like to do things the other way around. And by the way most middle/senior managers on average are 40 years old, so there is still time for promotion.
  19. You moan about house prices then go and spend £££££ a year on things that are most defiantly going to depreciate Ever heard of promotion at work? I didn’t start work at 22 with the belief in 30 years I would be doing the same job, Bonuses , pay rises it all helps and if you say you don't get these then your in the wrong job.
  20. Was in the travel agents this morning and over heard a conversation between a group of five 20 something women, one was the travel agent. The four women were trying to book a holiday to the caribbean for August, they had pulled up in a brand new mini convertible and were all dressed head to toe in designer labels. They then went on about last weekend, next weekend and how much it was costing to just have a night on the town. I thought best of luck to them enjoy it when you can, while your still young etc etc. But then the conversation turned to house hunting, I heard one of them say she did not have deposit so would be renting for a long time (I wonder why) and then the travel agent said that the apartment she went and looked at was now beyond here budget because of IR rises. Not once did they actually mention the price of houses just how much they have left at the end of the month to spend elsewhere, With a Brand new car , New clothing , Holidays to the caribean I had to bite my lip otherwise I would of told them that a house is a long way away if you keep spending like that. From what I could work out they were all renting, either together or on their own but all trying to buy somewhere. I think this sums up many FTBs today, the IPOD generation. Want it all new and now but pay as little as possible and not work hard for it. This is not what home ownership is about, there are sacrifices to be made, there always have been. Even 20 years ago there were very few working class who bought a new home and went out every weekend, holidays once a year and brand new car.........Plus clothing, ipods , gadgets etc. I also wondered how much debt they already have and if a crash were to happen and credit did tighten if they would be able to get a mortgage even then, I am sure banks would be asking for 20+% deposits. I would say they got more chance now!!
  21. Looking at the this map from the same report it can be seen that wales overall had >9.1 growth in many counties.The highest consentration in the whole of the uk I would say that prices run away a little and are coming back in line
  22. On the flip side, and no one would be able to predict which way it would go. If many pre boom BTLrs bailed out over the next 12mths the rental market would be left with only those who bought their BTLs within recent years. These are the LL who have paid a higher price for the property and having to repay higher mortgage repayments. This could lead to increases in rental prices overall with little alternative cheap rentals that we currently see. Remember the increase in BTL over the past 8 years, those who bought before the boom are a small number in comparison
  23. How far are we away from the next BOE IRS meeting, a week or so? Yeah thought so, the Nationwide always seem to what to put the brakes on IRs rises.....Its bad for business.
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