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CrashIsUnderWay

How Many Homeowners In Trouble

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I wonder if anyone can construct a realistic model of how many people are likely to be in trouble with even small falls?

What I mean is (for example) say 5% of people move home each year. Anyone buying within the last 2 or 3 years probably has minimal equity in their house (in London, most will already be in Negative equity). That might imply 10% - 15% of the population VERY vulnerable to small price falls???

Anyone got the data to make a convincing model out of this concept?

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I wonder if anyone can construct a realistic model of how many people are likely to be in trouble with even small falls?

What I mean is (for example) say 5% of people move home each year. Anyone buying within the last 2 or 3  years probably has minimal equity in their house (in London, most will already be in Negative equity). That might imply 10% - 15% of the population VERY vulnerable to small price falls???

Anyone got the data to make a convincing model out of this concept?

Not everyone that buys a house has a small downpayment. Most FTB's probably have only a small deposit - many non whatsoever.

To get an idea, look at FTB transactions in the last few years.

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Personally I think gordon browns economy is so destroyed by personal debt now sucking up so much money that the only way forward is inflation..

I predicted that at some point the borrow to spend phase would stop.. (equity release, Credit Cards etc..) then soon after that spending drops on the high street.. then crunch..

If inflation does explode.. then current owners may be shileded when the economy collapses..

(If anyone thinks the economy can survive.. explain away £600,000,000,000 of borrowin in 6 years,,, and how any economy can surive that.... There is no way that it can.)

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Personally I think gordon browns economy is so destroyed by personal debt now sucking up so much money that the only way forward is inflation..

I predicted that at some point the borrow to spend phase would stop.. (equity release, Credit Cards etc..) then soon after that spending drops on the high street.. then crunch..

If inflation does explode.. then current owners may be shileded when the economy collapses..

(If anyone thinks the economy can survive.. explain away £600,000,000,000 of borrowin in 6 years,,, and how any economy can surive that.... There is no way that it can.)

The problem with that is that there is a very flexible supply side in most consumer items. The level of imports will simply decrease or increase depending on demand, controlling cost. The place we could see inflation is either in house prices (negating the whole point of this site, although I think they are too out of reach to go much further.) or in interest rates which I think is the most likely. Notwithstanding what the Bank of England likes to think, it is not powerful enough to control the money supply since this is now virtual.

Is it not a good time to provide to advice to recent FTBs who are already in negative equity, on how to survive (eg. lock in your interest rate, don't panic, sit tight, if you do have to walk away make sure you declare yourself bankrupt so that this doesn't come back to haunt you in 10 years when you have finally got yourself together again. Maybe some of these suggestions are debatable, but I think that this one should be front page news on this site, since these people need some good advice to survive, and since they aren't just punting on a market, I think their case goes beyond the darwinian principle of the market to a moral deserving to survive)

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From discussions with those who "manage" our economy there seems to no risk of inflation beyond say 3% per annum.

There WILL be however tax increases,both visible and "stealth" starting shortly to cover the government debt.

I will post as and when I am able to without breaching any trust,however on a personal level I am extremely concerned that the UK economy is in a bad way AND GETTING WORSE

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Guest growl
you would also need to consider all the people who have taken out big second mortgages

I know some people who are on their fourth and fifth remortgage. Some of them in their fifties. Which means they have ten years left to pay the property off before they retire.

That is...if they retire :blink:

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well the reason there is little risk of above 3% inflation is that IR's will be driven up hard,and unemployment will follow....so hey presto,no money!

that's how inflation is tamed!

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I think you guys are a little doom and gloom here. It is not as if the whole country is in complete debt and on the verge of negative equity.

Sure if interest rates go up to 7% then the majority of people will tighten their belts and scale back their spending. I'll bet no more than 2-3% will be in any real danger of losing their homes. Many people will go into negative equity, but will suffer in silence and keep paying their bills.

We will see no nuclear winter.

However, I firmly believe that our greatest asset will be fear. I liken the scenario here to the urban myth of the guy who jogs every day, fit as hell, then dies of heart attack aged 40. Sure these people exist, but the majority of people who spout this story as fact have never met anyone who fills this description.

The same will happen with repossessions and negative equity. Word will spread like wildfire of people who "lost their shirts", though in reality they will be fairly thin on the ground. At this point the sun will be full of these people, (regular sun reader type people) who have lost all in the terrible crash. This fear will start the housing crash IMHO.

People in here and economists all have their high brow theories and models, all backed up by the latest economic statistics, but when the sun reports regular people losing their shirts due to the HPC, then we have a crash on our hands.

Incidentally most people I chat too are almost unaware of the previous HPC, most will see this one go by unnoticed, the world will not end, but all those thinking of buying will still read these stories in the sun and they will hopefully wait and see as all you guys are doing.

Not all need notice the crash for it to happen, just those who ar thinking of buying.

Sorry its a bit of disjointed gibber, but I am a sun reader.

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I think you guys are a little doom and gloom here. It is not as if the whole country is in complete debt and on the verge of negative equity.

...

Incidentally most people I chat too are almost unaware of the previous HPC, most will see this one go by unnoticed, the world will not end, but all those thinking of buying will still read these stories in the sun and they will hopefully wait and see as all you guys are doing.

Not all need notice the crash for it to happen, just those who ar thinking of buying.

Sorry its a bit of disjointed gibber, but I am a sun reader.

Why the sun? The mail has a better horoscope.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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