cybernoid Posted August 25, 2011 Share Posted August 25, 2011 (edited) Yeah, and what are they all going to buy the over-priced houses with ? Monopoly money ? Sadly not, real money, they'll be living 10 to a room, and if you want to live here, you'll have to too. Edited August 25, 2011 by cybernoid Quote Link to comment Share on other sites More sharing options...
guitarman001 Posted August 25, 2011 Share Posted August 25, 2011 Or just use the Internet once in a while to see when it's worth going back Touche Quote Link to comment Share on other sites More sharing options...
Habeas Domus Posted August 25, 2011 Share Posted August 25, 2011 dont forget the iTulip animated graphic explaining how house prices drops always start in rural areas... http://www.itulip.com/movies/housingbubblegeo.gif This is for the USA but Im sure we wont be much further behind Quote Link to comment Share on other sites More sharing options...
Chest Rockwell Posted August 25, 2011 Share Posted August 25, 2011 They're not not going to let it happen. It makes perfect sense to me. The banks over-lent. People went crazy. Five, six, seven times salary multiples. It was all going to end in tears. The government were too slow to react in 2007. What started as a little correction turned into a full blown house price crash. Had this been allowed to continue, we would have seen house prices drop by 50%, as has happened in Ireland. Assuming a 10% deposit on a £200,000 house, is your average mortgage slave going to pay off the £180,000 mortgage on a house now worth only £100,000? No, they'll walk. Leaving the bank with a £80,000 loss. The banks would be left with a flood of repossessions, which they wouldn't have a hope in hell of selling in order to recoup some of their losses, because the moment they put them all on the market, they trigger another leg of the crash. So they held interest rates at 0% to keep homeowners in their houses. House prices rebounded. Meanwhile, thanks to an effective 'interest holiday' on their mortgages, a lot of people ended up paying down a lot of their capital. Which is exactly what the banks want. When the next leg of the house price crash happens, they want as much of that mortgage capital paid off as possible, so the punter takes the hit. It's no coincidence that, in order to get a reasonable rate mortgage, it's necessary to put a 40% deposit down. The banks aren't stupid. They want the punter to stump up the equity that they know will be lost when the crash finally happens. The price crash is coming.... Tib Excellent post! Quote Link to comment Share on other sites More sharing options...
copydude Posted August 25, 2011 Share Posted August 25, 2011 Most rubbish post ever! Thanks for that valuable World View from the Kings Arms in Mitcham. And now we hand you back to the studio for the shipping forecast. Quote Link to comment Share on other sites More sharing options...
rantnrave Posted August 25, 2011 Share Posted August 25, 2011 Yep you couldn't be more spot on. So let's hope these over indebted idiots are repaying their mortgages fast so we can all get on with a HPC. Apparently "they've never had it so good". Quote Link to comment Share on other sites More sharing options...
'Bart' Posted August 25, 2011 Share Posted August 25, 2011 As you can see from the front page graph, we a re definitely in the HPC. The only problem is...I'm bored with it now. Houses? Oh yeah, I remember now... those were the days. But...is the imminent collapse of the global economy exciting enough for you? Quote Link to comment Share on other sites More sharing options...
Lambie Posted August 25, 2011 Share Posted August 25, 2011 Houses? Oh yeah, I remember now... those were the days. But...is the imminent collapse of the global economy exciting enough for you? "I wanted a house and all I got was this lousy financial armageddon" Quote Link to comment Share on other sites More sharing options...
Second Time Around Posted August 26, 2011 Share Posted August 26, 2011 They're not not going to let it happen. It makes perfect sense to me. The banks over-lent. People went crazy. Five, six, seven times salary multiples. It was all going to end in tears. The government were too slow to react in 2007. What started as a little correction turned into a full blown house price crash. Had this been allowed to continue, we would have seen house prices drop by 50%, as has happened in Ireland. Assuming a 10% deposit on a £200,000 house, is your average mortgage slave going to pay off the £180,000 mortgage on a house now worth only £100,000? No, they'll walk. Leaving the bank with a £80,000 loss. The banks would be left with a flood of repossessions, which they wouldn't have a hope in hell of selling in order to recoup some of their losses, because the moment they put them all on the market, they trigger another leg of the crash. So they held interest rates at 0% to keep homeowners in their houses. House prices rebounded. Meanwhile, thanks to an effective 'interest holiday' on their mortgages, a lot of people ended up paying down a lot of their capital. Which is exactly what the banks want. When the next leg of the house price crash happens, they want as much of that mortgage capital paid off as possible, so the punter takes the hit. It's no coincidence that, in order to get a reasonable rate mortgage, it's necessary to put a 40% deposit down. The banks aren't stupid. They want the punter to stump up the equity that they know will be lost when the crash finally happens. The price crash is coming.... Tib I think this is on the right lines and deep down I hope that you are right BUT the strategic thinking is, as you say, to play for time in the hope that the banks can take a hit without the disaster a 2007 default would have wrought on the UK system and wider economy. However, it might be premature to think we are much better off than four years ago and we might still have another round of QE just to cushion the banks again: see quote below from BoE website: "At its meeting in February 2010, the Committee voted to maintain the stock of asset purchases at £200 billion but the Committee will continue to monitor the appropriate scale of the asset purchase programme and further purchases would be made should the outlook warrant them." My link Mrs STA and I are still happy to play the long game - we appreciate many on this site can't. The scenario you describe is likely to be delayed until 2013-14 (probably until after a snap general election?)if we have another round of QE, but by then we will be ready to buy (with cash) a retirement home at the bottom of this downturn in 2015-16. However, let us not forget that the price crash is already here, but in slow motion. By 2016 average UK house prices will have fallen to]30-40% of the 2007 peak prices in real terms. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted August 26, 2011 Author Share Posted August 26, 2011 Houses? Oh yeah, I remember now... those were the days. But...is the imminent collapse of the global economy exciting enough for you? It's been collapsing for 4 years now. it's so last year !!! The gold bubble bursting has perked me up today. The bloke on the radio (BBC) said it's a bad investment, so it must be !!! Quote Link to comment Share on other sites More sharing options...
Mr. Piddle Posted August 26, 2011 Share Posted August 26, 2011 (edited) Well i'm bored of it so I might just go and buy somewhere in the hope that I can actually afford it one day like everyone else. What's the worst that can happen? I realise that I can't afford it like I knew already and some rich person happily takes advantage of that fact and buys it off me for half price? We're all in it together remember Edited August 26, 2011 by mason Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted August 26, 2011 Author Share Posted August 26, 2011 What's the worst that can happen? You struggle to pay the mortgage for 15 years then an invading army shoots your family in front of you and takes it off you ? Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 26, 2011 Share Posted August 26, 2011 Si1, It doesn't. But a 33% increase in population, record low interest rates, state subsidies, and a criminal credit boom can get you 300%. there hasn't been a 33% increase in population, there are no solid numbers anywhere to suggest this and if there had been, then even then, your last 3 points are all transient and ending right about now Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 26, 2011 Share Posted August 26, 2011 http://www.youtube.com/watch?v=3kuGN2C4UXE that's a gorgeous classic old Panasonic/Technics direct drive turntable - the pitch-stability on that sound is CD-like. lovely they hold their value quite well, well trendy these days Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 26, 2011 Share Posted August 26, 2011 Excellent comment. I plan to move abroad (fingers crossed) ~2013. Part of me hopes prices do NOT fall as I would be tempted to stay. Imagine leaving then coming back to find out you'd missed it, after all that waiting. Then be shafted for another couple decades. Hm,..... go for it mate I give it 20 years to bottom in real terms - mini bottom 4 years from now and then big demographic and fiscal bottom 18 years later Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 26, 2011 Share Posted August 26, 2011 i would think your joking there but i also think that many on here think thats the case, buy cheap in the next couple of years and were quids in. i dont think that will be the case, its a long term decline. +1 renting for the next 20 years, but buying IF a nice house comes up that it is worth the premium for (I have a more interesting/better career over that period if i take temporary contracts and stay mobile, so I am tempted anyway to do the former) Quote Link to comment Share on other sites More sharing options...
Guest UK Debt Slave Posted August 26, 2011 Share Posted August 26, 2011 As you can see from the front page graph, we a re definitely in the HPC. The only problem is...I'm bored with it now. Im bored waiting for asking prices to become realistic. Im bored waiting for repo's to start. Im bored waiting for interest rates to rise. Im bored waiting for the next banking crisis. Im bored waiting for gold to collapse. Im bored waiting for a someone to say..."you were spot on". Im bored waiting for that bloke I know that bought a house under a pylon to say "what was I thinking my house is worthless". Im bored waiting for a decent Prime Minister. Im bored waiting for a the bankers to get their just deserts. Im bored waiting for that episode of homes under the hammer where no one buys a house Im bored waiting for the graph to reach the bottom. Im bored waiting for a home. It's like watching a car crash in slow motion, only slower. Economic disaster by design You're actually getting a house price crash though. Inflation is destroying the paper profits made in the property market. Trouble is, the Malthusian misanthropic sociopaths who are running the world are trashing the economy too................deliberately So no respite for aspiring homeowners. I'm grateful just to have a job that pays a reasonable wage frankly. Quote Link to comment Share on other sites More sharing options...
Fairies Wear Boots Posted August 26, 2011 Share Posted August 26, 2011 We need a catalyst. We need some big landlords to fall, releasing a tidal wave of properties into the market. Think, the Wilsons. Rate rises. The Wilsons are utterly stuffed when rates rise as will be a lot of people with a highly leveraged portfolio. I'm bored of the crash. Be better if I had front row seats i.e. Be up North. Quote Link to comment Share on other sites More sharing options...
24gray24 Posted August 26, 2011 Share Posted August 26, 2011 (edited) Assuming a 10% deposit on a £200,000 house, is your average mortgage slave going to pay off the £180,000 mortgage on a house now worth only £100,000? No, they'll walk. Leaving the bank with a £80,000 loss. Tib You're forgetting the interest. With interest, the slave has to pay off £360,000 for a house now worth £100,000. Remember the box that says "you will pay £2.12 for every £1 borrowed". Edited August 26, 2011 by 24gray24 Quote Link to comment Share on other sites More sharing options...
LiveinHope Posted August 27, 2011 Share Posted August 27, 2011 (edited) +1 renting for the next 20 years, but buying IF a nice house comes up that it is worth the premium for (I have a more interesting/better career over that period if i take temporary contracts and stay mobile, so I am tempted anyway to do the former) Yep. Bored with the HPC ? No, ambivalent about the HPC ? Yes. Was definitely bored by self-righteous home owners, although they are falling silent :-) On this site because I feel comfortable with the majority viewpoint, unlike 'outside'; but that could be dangerously reinforcing of course. If I buy a house it will be because the right one comes along and I have the cash, and only then if buying a house is the sensible thing to do with the cash, rather than spend it down until 'the end'. Quite happily rent from a long-term landlord (not a BTL-er), rather than rent a home a bank, until then. Although I have always been in the same line of work with employment/salary always coming from my own idea, I tend to get bored and then have a radical change of direction every 5-8 years, which brings interest and gets me sprinting again. While I never know precisely when this will happen, the cycle has been remarkably consistent when I look back. Often there can be a brief period of 'no salary' of unknown length, longest was 12 months (I used that period to develop a new idea). Not being in debt to a bank is mentally liberating under these conditions, with the other benefit that my savings have grown to be a comforting fall back, which might not have happened had I bought some bricks and serviced interest payments. I look at all my colleagues and they all still service their mortgage, have no spare cash, are slaves to their employer, and are petrified of unemployment. 30 years ago I thought differently and home ownership was the goal, but that was because I was brought up conventionally. Edited August 27, 2011 by LiveinHope Quote Link to comment Share on other sites More sharing options...
LiveinHope Posted August 27, 2011 Share Posted August 27, 2011 Economic disaster by design You're actually getting a house price crash though. Inflation is destroying the paper profits made in the property market. Trouble is, the Malthusian misanthropic sociopaths who are running the world are trashing the economy too................deliberately So no respite for aspiring homeowners. I'm grateful just to have a job that pays a reasonable wage frankly. Pretty much how I feel Of course I'm involved in the crash in all respects, but at this moment I'm still more glad I'm a renter-saver than a home owner. Quote Link to comment Share on other sites More sharing options...
Ipodjunky Posted August 27, 2011 Share Posted August 27, 2011 I'm very bored of it, I thought about buying a house again this month due the lameness of my landlord the time taken to do repairs are a joke. Still I bitch slapped him verbally into doing the repairs. Ah well me and the girlfriend are looking abroad now not to buy just to experience life. She doesn't want me to buy a house or get a mortgage (I like this girl allot) I'll still pop back here every now and again if it crashes i'll buy something just for storage, if it doesn't ah well at least I can say I've lived my life to the full unlike my housebound skint friends who are hemorrhaging money lol. Quote Link to comment Share on other sites More sharing options...
macca Posted August 27, 2011 Share Posted August 27, 2011 Did anyone honestly believe that a bunch of millionaire dictators were going to change the status quo? If I wanted a home I'd get out of the UK as quickly as possible and go and get value for money elsewhere. Give me one good reason for someone young to stick around waiting for a crash that may never happen? Is the UK so fantastic that you are prepared to go wasting the best years of your life over some bricks and mortar at a price you think is realistic? You can go almost anywhere in the world and take your chances and maybe save yourself a fortune in the process so why stay here moaning your lives away waiting for the misfortunes of other so that you can have your fill? If you want to stay then take the advice that if you can't beat them join them, get yourself a mortgage and get on with it like everyone else. Quote Link to comment Share on other sites More sharing options...
cybernoid Posted August 27, 2011 Share Posted August 27, 2011 You can go almost anywhere in the world and take your chances and maybe save yourself a fortune in the process so why stay here moaning your lives away waiting for the misfortunes of other so that you can have your fill? If you want to stay then take the advice that if you can't beat them join them, get yourself a mortgage and get on with it like everyone else. 'if you can't beat them join them' rolls off the tongue quite nicely but doesn't actually make any sense in this context. I'm not trying to 'beat' anyone, perhaps a more accurate reflection of the situation would be 'if you want to join the beaten get a mortgage like everyone else'. They're more screwed than we are, battling to pay back enormous debt, trapped in negative equity, couldn't sell if they want to, cant move - who is it that can't 'get on with it'? If you consider 'getting on with it' to mean living your life as I do that is, and not being as dumb as the hemmed in cattle. Move abroad, excellent idea. I'll leave the rest to 'get on with it'. Baaaaaaa. Quote Link to comment Share on other sites More sharing options...
homeforliving Posted August 27, 2011 Share Posted August 27, 2011 I am bored too but that doesn't mean I am ready to sign up for organised slavery. My only problem is annoying landlord who increased rent last year and may ask for another rent increase given London rents are rising. Can't we organise e-petitions to sack mervyn king and rent regulations so that rents are fixed by property type? Quote Link to comment Share on other sites More sharing options...
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