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saabman

Negative Equity....

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Just heard an interesting quote on Skynews this evening....

"There are 120,511 U.K. households in negative equity in first quarter of 2015. Almost half of them are in Northern Ireland where the number of homes in negative equity is rising. They won't want an realy rate rise......."

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Just heard an interesting quote on Skynews this evening....

"There are 120,511 U.K. households in negative equity in first quarter of 2015. Almost half of them are in Northern Ireland where the number of homes in negative equity is rising. They won't want an realy rate rise......."

I know that is meant to be good news but I find it a depressingly small number. I had hoped that it would be ten times that by 2015.

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I know that is meant to be good news but I find it a depressingly small number. I had hoped that it would be ten times that by 2015.

Why on earth would you hope that the number of people in negative equity was 10 times higher.

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Just heard an interesting quote on Skynews this evening....

"There are 120,511 U.K. households in negative equity in first quarter of 2015. Almost half of them are in Northern Ireland where the number of homes in negative equity is rising. They won't want an realy rate rise......."

that works out at 0.5%, or thereabouts of the UK total housing stock. A correction in London could soon increase that.

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Why on earth would you hope that the number of people in negative equity was 10 times higher.

Because it means prices are lower than the unsustainable levels of the 2000s.

Pretty simple, I would have thought.

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Because it means prices are lower than the unsustainable levels of the 2000s.

Pretty simple, I would have thought.

There is the passage of time to explain a fair bit of the low (!) level of negative equity. Anyone who took out a repayment mortgage in the early 2000s is nearly half way through it, and with the low interest rates since then, a huge chunk must be paid off by now. Edited by yadayada

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There is the passage of time to explain a fair bit of the low (!) level of negative equity. Anyone who took out a repayment mortgage in the early 2000s is nearly half way through it, and with the low interest rates since then, a huge chunk must be paid off by now.

Not to mention that from 2000 to now prices have pretty much doubled apart from NI where they are approx 50% higer. the last 15 years has seen a mixture of high and low interest rates.

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I meant specifically in ni, but anyway.

Is that the figure? This means average annual appreciation has been something less than a stonking 2 %. Tax free of course. It's as if the whole boom bust never happened.

Don't forget those rates and repairs plus interest payments (or opportunity cost if you bought your house with savings), and you're looking at a loss if you bought anytime in the last fifteen years. Wow.

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Not to mention that from 2000 to now prices have pretty much doubled apart from NI where they are approx 50% higer. the last 15 years has seen a mixture of high and low interest rates.

No it hasn't. Normal and nonexistent you mean. Certainly not high and low.

Edited by 2buyornot2buy

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No it hasn't. Normal and nonexistent you mean. Certainly not high and low.

Depends what we call normal. (5% I guess) . The average rates were slightly under 7% around 2000 and are around 3.5% now. sure there are teaser rates but you have to look at the APR.

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I meant specifically in ni, but anyway.

Is that the figure? This means average annual appreciation has been something less than a stonking 2 %. Tax free of course. It's as if the whole boom bust never happened.

Don't forget those rates and repairs plus interest payments (or opportunity cost if you bought your house with savings), and you're looking at a loss if you bought anytime in the last fifteen years. Wow.

15 years ago the average price of a house in NI was £65k (Nationwide). The price today is double that, despite the massive crash. You simply cant say you lost money on that.

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Depends what we call normal. (5% I guess) . The average rates were slightly under 7% around 2000 and are around 3.5% now. sure there are teaser rates but you have to look at the APR.

Average BOE interest rates are around 5%. Then you have to price in the lenders margin (average around 0.5 - 3%).

So for the past 15 years rates have been normal and extremely, never before seen low.

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15 years ago the average price of a house in NI was £65k (Nationwide). The price today is double that, despite the massive crash. You simply cant say you lost money on that.

It's not double.

q1 2000 = £65462

q1 2015 = £121052

Edited by 2buyornot2buy

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15 years ago the average price of a house in NI was £65k (Nationwide). The price today is double that, despite the massive crash. You simply cant say you lost money on that.

Just using the quoted figure from your own post - 50% rise in 15 years. So unless there's something wrong with my sums.

Edited by yadayada

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Not to mention that from 2000 to now prices have pretty much doubled apart from NI where they are approx 50% higer. the last 15 years has seen a mixture of high and low interest rates.

So - NI prices have risen 50% in 15 years

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15 years ago the average price of a house in NI was £65k (Nationwide). The price today is double that, despite the massive crash. You simply cant say you lost money on that.

Or - perhaps a 100% rise in 15 years.

Which? Or neither?

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Depends what we call normal. (5% I guess) . The average rates were slightly under 7% around 2000 and are around 3.5% now. sure there are teaser rates but you have to look at the APR.

A mate was telling me Barclays are doing 10 year fixed mortgages at 3.5%. If they're offering fixed rates for that long, they mustn't be expecting rates to go up by any great amount.

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A mate was telling me Barclays are doing 10 year fixed mortgages at 3.5%. If they're offering fixed rates for that long, they mustn't be expecting rates to go up by any great amount.

Bank lending rates have little to do with BOE base rates.

In 2006 10 year fixes at 4.69% were available. BOE base rates were between 4.5 and 5% I believe.

It's a measure of the banks ability to borrow from each other not where rates are heading.

Also the Barclay rate is only available with a 40% deposit. Prices could fall 40% (Possible in the UK) and they'd still be ok.

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Bank lending rates have little to do with BOE base rates.

In 2006 10 year fixes at 4.69% were available. BOE base rates were between 4.5 and 5% I believe.

It's a measure of the banks ability to borrow from each other not where rates are heading.

Also the Barclay rate is only available with a 40% deposit. Prices could fall 40% (Possible in the UK) and they'd still be ok.

Yeah - I have enough for a 40% deposit so buying somewhere reasonably big and locking in for 10 years might be a good idea.

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Or - perhaps a 100% rise in 15 years.

Which? Or neither?

My mistake for using ONS in one quote and Nationwide for another. You takes your picks..

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My mistake for using ONS in one quote and Nationwide for another. You takes your picks..

That's a pretty extreme margin of error. Pre election pollsters looking good.

Edited by yadayada

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That's a pretty extreme margin of error. Pre election pollsters looking good.

I need to apologise for my inexcusable sloppy work.

Correct figures for NI are:

2000 2015

Nationwide £65,462 £121,052 (85% increase) (Q1 2000 to Q1 2015)

ONS £67,000 £151,000 (125% increase) (Q1 200 to Q4 2014)

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