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Mr Yogi

Two Very Bearish Articles On Today's Independent

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Homeowners are warned that a three-pronged attack could see the number of repossessions spiral. Lenders are losing patience with those in arrears; government support programmes are being cut and economic shocks to the system will see interest rates creep up and potential unemployment figures soar.

http://www.independent.co.uk/money/mortgages/repossessions-likely-to-rise-as-options-run-out-for-struggling-homeowners-2034686.html

Prices have risen 15 per cent since February last year, according to Nationwide building society, undoing much of the fall during the previous 16 months, but some economists are warning of another crash that could cut values by more than 20 per cent. Even by 2020, house prices will probably not have returned to their pre-crash levels in real terms, say some forecasters.

http://www.independent.co.uk/news/business/analysis-and-features/was-the-last-fall-in-house-prices-just-a-warning-2034677.html

Still too bullish IMO though. Why on earth would anyone expect house prices to reach 2007 levels in real terms again in our lifetimes?

In the 90s crash, it took ten years for prices to recover in nominal terms. I expect it to take longer this time.

Edited by Mr Yogi

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Still too bullish IMO though. Why on earth would anyone expect house prices to reach 2007 levels in real terms again in our lifetimes?

I've also seen that real terms prediction from PWC but cant believe they actually meant that, it surely must be nominal. Anyway, love the two articles, they would have had HPC'rs frothing at the mouth on a normal day. Some comments :

"Lenders are losing patience with those in arrears; government support programmes are being cut and economic shocks to the system will see interest rates creep up and potential unemployment figures soar."

Personally, I dont expect interest rates to rise by more than 1% in a couple of years but the end of govt support and record unemployment looks inevitable.

"a new study has warned that home repossessions could mount to 175,000 in 2012....Repossessions at these sorts of levels would make 2012 worse than even the darkest year of the housing market crash of the early 1990s."

With 175,000 forced sellers and another 100,000 or so death/divorce type sellers, that will swamp any available buyer interest and mortgage availability. That alone would cause a 40/50% crash, basically moving to cash only market. I'll leave that as wishful thinking for now.

"Furthermore, in October, support for mortgage interest payments (a scheme for homeowners out of work) will be halved from 6.08 to 3.09 per cent to match the Bank of England's average mortgage rate, which will further exasperate the issue."

About time, I hate using my tax to bail out the debt junkies. The government should at least be taking some equity when it makes payments like this rather than giving tax-free cash away like this.

"Lenders will have exhausted the options open to them to assist homeowners who are continuing to struggle. Increased unemployment will put some households under pressure, as will future rises in mortgage interest rates."

An £800 billion shortfall in future bank funding should encourage them to get a move on.

The pillars supporting house prices have been DocMartin'd away and all that is left supporting them will be a weak pound.

VMR.

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I hadn't realised that was what they were going to do re mortgage interest support.

With the average mortgage rate being between 2% and 4% this makes much more sense.

It annoys me that the state supports those who bought houses they ultimately couldn't afford, when they priced out others who wanted to buy and could have.

It REALLY annoys me that they currently receive twice the money needed to cover the mortgage, simply because it is easier to administer.

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It REALLY annoys me that they currently receive twice the money needed to cover the mortgage, simply because it is easier to administer.

Anyone know if this extra income is at least taxable?

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Some funky SQL queries and the government can get a nice list of mortgage holders who are taking the government mortgage support scheme who are likely to have lied about their income to get the mortgage.

Quick review of the mortgage app, if the borrower had lied to get the mortgage (ie liar loan/fraud) then then the support for that individual is withdrawn.

How can the public be against that?

Edited by Vaevictus

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  • 152 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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