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Very Nasty Crash Coming According To Ea

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I am a saver, I have no debts, so I didn't realise the plight of most people until I spoke to friends recently and a couple of estate agents today (or rather how bad debt burdens of the middle class actually are).

We were just chatting and I commented that lately I have found that so many people, especially in my area, are completely max'd out on credit and are robbing Peter to pay Paul. I even discovered that some people I know are finding it hard to find the food money for the week. To my astonishment, he responded by saying, "Join the club". He said that most of his friends are in the same boat, can barely afford their mortgages, and Tesco bills, etc. I said what will happen when the rates go up, he responded that he will be very busy adding more houses to his books as owners are forced to sell. The not so sensible ones will hold on until repossession, just like the last crash.

I have said it before, the big turning point in house prices is going to be interest rate rises, it won't be instant, but after a couple of months you will see asking prices plummeting, not because sale prices are plummeting, but out of panic from vendors who have to sell and realise that overpriced will get them nowhere.

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I am a saver, I have no debts, so I didn't realise the plight of most people until I spoke to friends recently and a couple of estate agents today (or rather how bad debt burdens of the middle class actually are).

We were just chatting and I commented that lately I have found that so many people, especially in my area, are completely max'd out on credit and are robbing Peter to pay Paul. I even discovered that some people I know are finding it hard to find the food money for the week. To my astonishment, he responded by saying, "Join the club". He said that most of his friends are in the same boat, can barely afford their mortgages, and Tesco bills, etc. I said what will happen when the rates go up, he responded that he will be very busy adding more houses to his books as owners are forced to sell. The not so sensible ones will hold on until repossession, just like the last crash.

I have said it before, the big turning point in house prices is going to be interest rate rises, it won't be instant, but after a couple of months you will see asking prices plummeting, not because sale prices are plummeting, but out of panic from vendors who have to sell and realise that overpriced will get them nowhere.

The turning point will be unemployment, the sheer difficulty of finding a new non-job and the eventual liquidation of future pension portfolio.

I know many colleagues like that, seeing a dip in house prices as an opportunity to sweep them up. The idea that house prices might ever fall will die hard for many. Very few people remember how life was like before 1997. We're gonna see a series of painful and astonishing bull traps over the next several years. This is going to be long and drawn out.

Edited by Earthling10

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This time it's different.

Turning points will vary - the straw that breaks will be different things for different people.

Job losses, tax credits stopping, child benefit, petrol, food or just the soul destroying banality of not being able to go shopping and spend spend spend.

Edited by SarahBell

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I doubt the BoE will be moving interest rates upwards, the political fallout will be immense.

Unemployment is more likely to be the trigger as that will become a govt problem meaning the BoE will escape most of the flack.

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The turning point will be unemployment....

That's the key. We can all go on all we want about interest rates, stock overhangs, buyer/sellers markets, consumer debt and the like and these are all good points. BUT while you can juggle around (e.g.) a rise in interest rates or a big cc bill, once your income stops you are stuffed. It's obvious bu worth remembering IMHO.

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Very few people remember how life was like before 1997.

Even fewer remember how life was like before 1939. :P

With the BoE staying 'vigilant' we may wait at least 12 months for a rate rise.

It's different this time - well, at least it looks different.

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I am a saver, I have no debts, so I didn't realise the plight of most people until I spoke to friends recently and a couple of estate agents today (or rather how bad debt burdens of the middle class actually are).

We were just chatting and I commented that lately I have found that so many people, especially in my area, are completely max'd out on credit and are robbing Peter to pay Paul. I even discovered that some people I know are finding it hard to find the food money for the week. To my astonishment, he responded by saying, "Join the club". He said that most of his friends are in the same boat, can barely afford their mortgages, and Tesco bills, etc. I said what will happen when the rates go up, he responded that he will be very busy adding more houses to his books as owners are forced to sell. The not so sensible ones will hold on until repossession, just like the last crash.

I have said it before, the big turning point in house prices is going to be interest rate rises, it won't be instant, but after a couple of months you will see asking prices plummeting, not because sale prices are plummeting, but out of panic from vendors who have to sell and realise that overpriced will get them nowhere.

I mean no disrespect (quite the opposite in fact), but are you the anti-sibley?

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The turning point will be unemployment, the sheer difficulty of finding a new non-job and the eventual liquidation of future pension portfolio.

I know many colleagues like that, seeing a dip in house prices as an opportunity to sweep them up. The idea that house prices might ever fall will die hard for many. Very few people remember how life was like before 1997. We're gonna see a series of painful and astonishing bull traps over the next several years. This is going to be long and drawn out.

this feels very correct to me

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I doubt the BoE will be moving interest rates upwards, the political fallout will be immense.

Unemployment is more likely to be the trigger as that will become a govt problem meaning the BoE will escape most of the flack.

Why not the incessant inflationary creep where it outstrips wages?

It may not be as drastic or obvious, but it will have the same effect over a period of time.

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Even fewer remember how life was like before 1939. :P

With the BoE staying 'vigilant' we may wait at least 12 months for a rate rise.

It's different this time - well, at least it looks different.

The difference is that in 1939 we had a truer model of capitalism.

Capitalism doesn't avoid mistakes, but follow it through and it is astonishingly self correcting, if it is left to its own devices. The problem is when here today gone tomorrow electioneering politicians decide they have come up with a magical new formula, stifle the market with their weird and wonderful ways (ZIRP/ QE?). The crash that should have happened in 2000 was delayed and bubbled and bubbled and now we have the mother of all fall outs that we cannot even fathom.

This is not like 1939, this is much much worse.

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That's the key. We can all go on all we want about interest rates, stock overhangs, buyer/sellers markets, consumer debt and the like and these are all good points. BUT while you can juggle around (e.g.) a rise in interest rates or a big cc bill, once your income stops you are stuffed. It's obvious bu worth remembering IMHO.

SMI still overpays the mortgage for something like 50% of claimants.

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Yep, 2011 will be the year of mass unemployment, regardless of what happens to interest rates. Game Over for anyone carrying debt.

I thought about travelling in 2011. I also hear it's going to be a rough year.

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Why not the incessant inflationary creep where it outstrips wages?

It may not be as drastic or obvious, but it will have the same effect over a period of time.

That's what will hit 95% of the population whereas unemploymnent hts a tiny proportion.

The debt bubble was never thougt out and neither was printing their way out - it wlll end up in a lot worse mess.

Edited by OnlyMe

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I am a saver, I have no debts, so I didn't realise the plight of most people until I spoke to friends recently and a couple of estate agents today (or rather how bad debt burdens of the middle class actually are).

We were just chatting and I commented that lately I have found that so many people, especially in my area, are completely max'd out on credit and are robbing Peter to pay Paul. I even discovered that some people I know are finding it hard to find the food money for the week. To my astonishment, he responded by saying, "Join the club". He said that most of his friends are in the same boat, can barely afford their mortgages, and Tesco bills, etc. I said what will happen when the rates go up, he responded that he will be very busy adding more houses to his books as owners are forced to sell. The not so sensible ones will hold on until repossession, just like the last crash.

I have said it before, the big turning point in house prices is going to be interest rate rises, it won't be instant, but after a couple of months you will see asking prices plummeting, not because sale prices are plummeting, but out of panic from vendors who have to sell and realise that overpriced will get them nowhere.

I love it when you talk dirty!

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I am a saver, I have no debts, so I didn't realise the plight of most people until I spoke to friends recently and a couple of estate agents today (or rather how bad debt burdens of the middle class actually are).

We were just chatting and I commented that lately I have found that so many people, especially in my area, are completely max'd out on credit and are robbing Peter to pay Paul. I even discovered that some people I know are finding it hard to find the food money for the week. To my astonishment, he responded by saying, "Join the club". He said that most of his friends are in the same boat, can barely afford their mortgages, and Tesco bills, etc. I said what will happen when the rates go up, he responded that he will be very busy adding more houses to his books as owners are forced to sell. The not so sensible ones will hold on until repossession, just like the last crash.

I have said it before, the big turning point in house prices is going to be interest rate rises, it won't be instant, but after a couple of months you will see asking prices plummeting, not because sale prices are plummeting, but out of panic from vendors who have to sell and realise that overpriced will get them nowhere.

This is the second reason that it wont be happening soon.

The first is that it would drive sterling up and kill exports.

It doesnt make sense to you and I but there it is.

Inflation/deflation arguments are a load of rubbish so long as the powers do not lose control and we are a long way from that.

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I think a lot of people will probably be able to struggle through modest IR rises and the upcoming increas in unemployment.

IMO it will be drawn out. Slowly with rising inflation and IR sheeple will realise the foreign holidays, meals out and designer handbags are gone. At this point they will sell up, downsize and use whatever equity they have to subsidise their lifestyle. At the end of the day what's the point of having a nice house but no holidays, social life or days out?

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I think people will stop paying their mortgages and use the money for day to day living.

What is the average time from first missed payment to repossession, nowadays?

If that happens en masse then public guarantees for toxic assets may kick in. Up to £850bn worth. More printing to cover it. Runaway inflation. Most likely damage to banks in other countries infected by holding toxic assets ultimately securitised against sub-prime UK loans and liar loans. As shite as things are here we still didn't have our sub-prime crisis yet and I really liked Peston's description of us being in the shadow of Vesuvius.

And you are right that when it comes to a choice between food/heat and paying the mortgage then the payments will stop.

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Its part of the US desire to dominate the financial arena like all other walks of life. Had they not repealed Glass-Steagal we would not have been in this mess, becuase the CDO was invented in the UK back in 1997 but didnt really come into play until the early part of the turn of the century.

The High Octane Fuel that made up those "CDO's" [Collaterised Debt Obligations] - was

PREDATORY LIAR LOANS.

It was [and still is] the most massive ponzi/pyramid scam in all history....

i.e. Fraud. i.e. The Rotten Apple in the Barrel Syndrome....... :rolleyes: It always leads to decay/poisoning of the system... :rolleyes:

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When I bought A house in the USA in 2006 the parallels to the current market here are uncanny.

Houses in Michigan had been through a dip in price for approximately 18-24 months, everyone was upbeat saying that they cannot go any lower, everything is stabilising, "buy now!". To say they got the shock of there lives is an understatement of massive proportions.

My own personal experience is that my $170,000 property dived to $140,000 ish within the first twelve months of ownership, this was before the banking collapse. Nothing to concern me as my plan was to stay for at least ten years and ride out the storm. Didn't quite see how big the storm was going to be.

Needless to say mid 2008 everything started going very wrong, petrol doubled, the big three car companies started shedding workers like crazy, the banking crisis hit and property crashed hugely.

I was lucky, the company I worked for decided they wouldn't renew my visa, the green card was still in the application stage so that was no good, so I baled out. I did have someone renting it short term but then they got married and disappeared so the bank foreclosed and my lovely little ranch house on a half acre plot was sold at auction for $55,000.

And people keep saying it won't happen here, the same as people kept saying it couldn't happen there, I think it will and I know it did.

(Anecdotally, one American chap I worked with watched his $350,000 3200 sq foot house dive to about $150,000, He only saved it by taking whatever short term engineering jobs he could all over the USA, And another had his house in the boondocks get sold at auction for a fraction of what he paid)

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As I write, 158 users are reading this topic. Surely one of you can answer my question!

As far as I'm aware there isn't one.

As in, whether a house is ever repossessed is more a function of how dim the owner is rather than a function of time from last payment.

If you believe the anecdotals, courts are practically barred from issuing repossession orders if the owner makes even the smallest token offer to make a contribution towards payments. So, for example, if they pledge to pay £1 per month towards the mortgage, the lender will be practically barred from chucking them out.

Combine this with SMI and you can see why repossessions are so few. You have to understand, these guys DESERVE the house they out bid you on but couldn't afford. It is cruel to kick them out into rented accommodation. You on the other hand are not worth it because you're not a chancer like them ;)

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  • 311 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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