Caveat Mortgagor Posted October 19, 2011 Share Posted October 19, 2011 TMT style field report for anyone wanting an injection of bearishness. Earlier this week I had a chat with a letting agent who considers himself to be an estate agent, but he spends most of his time on lettings to pay the bills. Tells me a number of interesting things. When the EA offers special deal mortgages to customers, the lender is always hugely over-subscribed and this means that ther lender does a lot of cherry picking to get the best borrowers. The EA loses a lot of business this way. Sometimes the lender can be oversubscribed 2 or 3 times which means they filter out more than half the would be buyers. The special deals will typically be a 90% ltv with an interest rate below the normal insane rates for 90% ltv mortgage. Apparently Northern Rock were one of the recent lenders to do this. They have a limit of no more than 40% of their lending to be on 90% ltv. He is seeing people take their houses off the market for winter - he doesnt understand their logic either - he has advised those doing so that the market will pick up next year - but not in a way that will help them. He is telling his vendors that prices are falling and could be as much as 5% lower by April. Anyone waiting til spring faces losing out. He sees volumes picking up as prices fall as buyers who have held out are tempted into the market. I thought for a minute the bloke must be an HPCer. Lets examine what he's said:- Lenders picking and choosing - despite this he is still unsure about their long term viability / stability Evidence of a buyers strike Lower prices are good for him because they will increase volumes Prices will fall 5% in 6 months Telling vendors 'If you dont take todays price, you wont like tomorrows price' - I think he sees the capitulation stage! Quote Link to comment Share on other sites More sharing options...
Lepista Posted October 19, 2011 Share Posted October 19, 2011 TMT style field report for anyone wanting an injection of bearishness. I thought for a minute the bloke must be an HPCer. Lets examine what he's said:- Lenders picking and choosing - despite this he is still unsure about their long term viability / stability Evidence of a buyers strike Lower prices are good for him because they will increase volumes Prices will fall 5% in 6 months Telling vendors 'If you dont take todays price, you wont like tomorrows price' - I think he sees the capitulation stage! lol! "Buyers strike"! It's no such thing. a quaint meme for overpriced housing. If house prices were a reasonable level, people would be putting in offers, banks would be forwarding mortgages, houses would be selling, everybody would be happy * * Except, of course, for the over endebted house seller. Quote Link to comment Share on other sites More sharing options...
StainlessSteelCat Posted October 19, 2011 Share Posted October 19, 2011 I don't remember voting for a strike but I'm certainly not paying these prices. Quote Link to comment Share on other sites More sharing options...
Lepista Posted October 19, 2011 Share Posted October 19, 2011 I don't remember voting for a strike but I'm certainly not paying these prices. I think that the vast majority of the population would, though, if they were offered a suitable mortgage. The likes of us on HPC are a different breed entirely. Quote Link to comment Share on other sites More sharing options...
koala_bear Posted October 19, 2011 Share Posted October 19, 2011 I think that the vast majority of the population would, though, if they were offered a suitable mortgage. The likes of us on HPC are a different breed entirely. I think a good deal of my age group (30) know that it is not sensible to take on mega mortgages because we also have to save for our retirement etc as we simple are going to have the "luck" of the generations before Quote Link to comment Share on other sites More sharing options...
Mr P Posted October 19, 2011 Share Posted October 19, 2011 I think that the vast majority of the population would, though, if they were offered a suitable mortgage. The likes of us on HPC are a different breed entirely. Are Hpc'ers a different breed though? if i had not stumbled accross this site i would probably never have opened up my eyes to the bigger picture.How many people just close their eyes and go with the flow?My life to some degree has been put on a bit of a hold status until i can climb back on to the property ladder at an affordable level for me.How many more years am i going to stay in limbo before i just say Boll@cks and jump into the abbys? Quote Link to comment Share on other sites More sharing options...
eric pebble Posted October 19, 2011 Share Posted October 19, 2011 I think that the vast majority of the population would, though, if they were offered a suitable mortgage. The likes of us on HPC are a different breed entirely. SO true..... I just feel SO depressed how THICK so many people are..... Quote Link to comment Share on other sites More sharing options...
Fishbone Glover Posted October 19, 2011 Share Posted October 19, 2011 My life to some degree has been put on a bit of a hold status until i can climb back on to the property ladder at an affordable level for me. There is no ladder. Only a pyramid. Quote Link to comment Share on other sites More sharing options...
Lepista Posted October 19, 2011 Share Posted October 19, 2011 Are Hpc'ers a different breed though? if i had not stumbled accross this site i would probably never have opened up my eyes to the bigger picture.How many people just close their eyes and go with the flow?My life to some degree has been put on a bit of a hold status until i can climb back on to the property ladder at an affordable level for me.How many more years am i going to stay in limbo before i just say Boll@cks and jump into the abbys? Then you're not a true HPC'er. Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted October 19, 2011 Share Posted October 19, 2011 I think a good deal of my age group (30) know that it is not sensible to take on mega mortgages because we also have to save for our retirement etc as we simple are going to have the "luck" of the generations before I think either side of 30 is the age group where people's life expectations have been thoroughly dashed by the ongoing property bubble. When you start to go below that then younger people will take for granted that property is not affordable and just make other plans. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted October 19, 2011 Share Posted October 19, 2011 I think either side of 30 is the age group where people's life expectations have been thoroughly dashed by the ongoing property bubble. When you start to go below that then younger people will take for granted that property is not affordable and just make other plans. I think it is fascinating observing the people in their 40s and higher who now expect silly sums for their properties - sums that they themselves could not afford to pay for their own home. From a psychological point of view they are very much living in denial. According to RM there are about 300 houses for sale in my geographical area that most people simply could not afford. Even GPs and other Docs are not prepared to pay those prices. So, apart from the odd cash-rich buyer, these houses just sit there on the market. I think it is going to be years before many of these sell, by which point inflation will have reduced their value to more realistic pricing. Quote Link to comment Share on other sites More sharing options...
Mr P Posted October 19, 2011 Share Posted October 19, 2011 Then you're not a true HPC'er. I would call myself a converted Hpc'er.The point i was trying to make was people - ordinary folk are unaware of the larger picture Quote Link to comment Share on other sites More sharing options...
JonnyTomes Posted October 19, 2011 Share Posted October 19, 2011 Spare a thought for my daughter who is expected to pay full fees when she goes to college next year. Unlike people your age. Please, please, please look into international options. Many universities in Holland, using English as the primary teaching language, will take UK students with minimal fee costs (£100's not £1000's). In many cases EU grants can also be obtained to help fund the course. In some of the better German and French universities English is also now the primary teaching language. The degrees obtained from many foreign institutions are also pretty valuable, as opposed to the now debased UK standards. To give you an example, when I received my degree from Manchester University I was the only student on my course to get 1st class honours. That got me my first job. Once fees came in, and the University entered open competition, around 15-20% of the course were being awarded a 1st. Many years later as a subsequent employer, I found (from bitter experience) that I couldn't use the degree grade to pick candidates and had to rely upon experience post University. Hence, we never hired a UK graduate without a postgrad qualification. We did hire several French and German graduates however. Studying abroad will save your daughter money, give her a more valuable qualification and broaden her horizons. The more young people see how poor the quality of life contrast is between the UK and other European countries, the more likely the UK is to eventually change... Quote Link to comment Share on other sites More sharing options...
Goat Posted October 19, 2011 Share Posted October 19, 2011 Spare a thought for my daughter who is expected to pay full fees when she goes to college next year. Unlike people your age. Fair enough, I'm in my 30's and I feel f***ed over, never mind having £50,000 of student debt on top. The one saving grace is that by the time she hits mid to late 20's the HPI bubble should have well and truely burst. Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted October 19, 2011 Share Posted October 19, 2011 Studying abroad will save your daughter money, give her a more valuable qualification and broaden her horizons. +1 Quote Link to comment Share on other sites More sharing options...
LiveAndLetBuy Posted October 19, 2011 Share Posted October 19, 2011 Are Hpc'ers a different breed though? if i had not stumbled accross this site i would probably never have opened up my eyes to the bigger picture.How many people just close their eyes and go with the flow?My life to some degree has been put on a bit of a hold status until i can climb back on to the property ladder at an affordable level for me.How many more years am i going to stay in limbo before i just say Boll@cks and jump into the abbys? I suspect most people are more concerned about what they'll be paying each month rather than what the "big picture" is. They'll compare the interest payments with rental costs and go from there. Monthly interest payments are about half of where they were in the 90s, salaries have risen significantly, so based on that a 250k house now is as affordable to them as a 100k house was back then. Of course the threat of house price falls, negative equity, etc is still there, but since the banks have been ordered to go soft on those having trouble paying their interest, people don't see it as a threat. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted October 19, 2011 Share Posted October 19, 2011 I suspect most people are more concerned about what they'll be paying each month rather than what the "big picture" is. They'll compare the interest payments with rental costs and go from there. Monthly interest payments are about half of where they were in the 90s, salaries have risen significantly, so based on that a 250k house now is as affordable to them as a 100k house was back then. Of course the threat of house price falls, negative equity, etc is still there, but since the banks have been ordered to go soft on those having trouble paying their interest, people don't see it as a threat. I regularly have conversations with EAs and do some basic maths lessons for them about how much it would cost, and for how long someone would have to pay before they owned, to pay a monthly mortgage on various properties on their books. Even the lower end prices shock them when I point it out to them but they appear to be mostly in denial about how much a property truly costs at today's ludicrous asking prices. This is why the whole economy is just messed up re house prices. Quote Link to comment Share on other sites More sharing options...
The Eagle Posted October 19, 2011 Share Posted October 19, 2011 Studying abroad will save your daughter money, give her a more valuable qualification and broaden her horizons. The more young people see how poor the quality of life contrast is between the UK and other European countries, the more likely the UK is to eventually change... Very true, I second that. Also I would suggest to anyone who has a daughter or son still at school to make them to do A-levels German (or French) so that they have a wider choice of unis to go to (and more choice with regards to jobs). Quote Link to comment Share on other sites More sharing options...
LiveAndLetBuy Posted October 19, 2011 Share Posted October 19, 2011 (edited) I regularly have conversations with EAs and do some basic maths lessons for them about how much it would cost, and for how long someone would have to pay before they owned, to pay a monthly mortgage on various properties on their books. Even the lower end prices shock them when I point it out to them but they appear to be mostly in denial about how much a property truly costs at today's ludicrous asking prices. This is why the whole economy is just messed up re house prices. yes - it would be good if comparison sites did comparisons between the overall costs of taking out and repaying a mortgage and renting and saving each month. They'd have to factor in expected inflation, income, savings rates, etc, but it would give a better picture. Edited October 19, 2011 by LiveAndLetBuy Quote Link to comment Share on other sites More sharing options...
Guest Posted October 19, 2011 Share Posted October 19, 2011 I regularly have conversations with EAs and do some basic maths lessons for them about how much it would cost, and for how long someone would have to pay before they owned, to pay a monthly mortgage on various properties on their books. Even the lower end prices shock them when I point it out to them but they appear to be mostly in denial about how much a property truly costs at today's ludicrous asking prices. This is why the whole economy is just messed up re house prices. You should point them to this Rent vs Buy excel sheet as well Quote Link to comment Share on other sites More sharing options...
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