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stuckin2up2down

"it's Like 2006 Again, Scary" ~ Estate Agent

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Banks haven't even started to loosen lending standards properly yet. Think 100%+ mortgages and 40 years becoming the normal term length before it pops for the final time.

Doesn't that mean its a few years away yet then?

Then again in 2007 it was something unexpected that started it all. Could be the same again.

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There is an advert on this page for 5% depots mortgages - i took a screen shot but doesnt look like i can upload.

Adverts on this site are based on what you search for on Google. You'll get mortgage adverts if you have been searching for mortgages.

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There is an advert on this page for 5% depots mortgages - i took a screen shot but doesnt look like i can upload.

Yerp... 5% mortgages aren't a good idea.

Still a fair way from lire loans, self cert and 120% NRAM mortgages. I'm not really convinced that we will get there either, this time I think it will be the unsecured credit card, loans, wonga, PCP etc. that breaks the camels back.

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Adverts on this site are based on what you search for on Google. You'll get mortgage adverts if you have been searching for mortgages.

It's not quite that simple. My cookies are cleared each session and anonymously browse so its keywords on this page that have triggered it.

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Yerp... 5% mortgages aren't a good idea.

Still a fair way from lire loans, self cert and 120% NRAM mortgages. I'm not really convinced that we will get there either, this time I think it will be the unsecured credit card, loans, wonga, PCP etc. that breaks the camels back.

I don't think we will get there either. 95% could be as toppy as it gets this time.

Something's got to give soon enough

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Why?

Mortgages are getting cheaper as interest rates (mortgage and saver) fall and 40 years can become the norm, plus there could be more HtB.

If prices fall George and Mark can blame the Brexit uncertainty and if prices rise it is because the economy is revovering.

I suspect that there does not really need to be a trigger as such, one day someone will look at the tulip bulb and say 'I'm not paying that, it is not worth it.' I beleive the whole market currently is driven by sentiment, prices are rising so you must buy now or miss out forever. Carney fuels the fire by saying interest rates will not rise until 2019 at the earliest. When sentiment does turn there will be no ammo left to turn the tide; interest rates going lower will not work like they did in 2009 as they can't go that much lower. And the take up of HtB is actually low but it has had a massive effect in terms of driving up prices ie driving sentiment.

SOmething does have to give soon, the ponzi system is not having the new entrants any more. BTL is dead and people are slowly understanding this, no more props like H2B, people staying in their jobs for longer thus less youth getting decent work.

I can see sentiment staying as it is for a while, people only ever see houses as a one way investment. Need a few solid years of declines for people to understand that they can go down.

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SOmething does have to give soon, the ponzi system is not having the new entrants any more. BTL is dead and people are slowly understanding this, no more props like H2B, people staying in their jobs for longer thus less youth getting decent work.

I can see sentiment staying as it is for a while, people only ever see houses as a one way investment. Need a few solid years of declines for people to understand that they can go down.

And if we Brexit, then George will kick all the props away anyway.

Perfect cover.

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SOmething does have to give soon, the ponzi system is not having the new entrants any more. BTL is dead and people are slowly understanding this, no more props like H2B, people staying in their jobs for longer thus less youth getting decent work.

I can see sentiment staying as it is for a while, people only ever see houses as a one way investment. Need a few solid years of declines for people to understand that they can go down.

"BTL is dead" - Well, certainly on life support. Where's the "off" switch?

I've been very cross at the number of houses in my locality being removed from the market by BTLers. Today on Rightmove there are 52 properties available in a 1 mile radius for sale and 14 for rent. I looked at some of the houses currently for rent when they were on the market and dismissed them as too expensive or was outbid...by a BTLer.

I phoned up a lettings agent to ask if the owner of a house that they have on their books for rent (that has been empty for 6 months) might sell it to us. I was told "we get a lot of requests like this" and "we've suggested that the owner sells it as people looking at it for rental are put off by the condition. I'll phone the owner and get back to you".

It's not a ladder for some then - more of a greasy pole.

I'm fine with greasy pole or ladder, I don't care 'cos I just want to hang up pictures and get musical instruments out of storage.

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Why?

Mortgages are getting cheaper as interest rates (mortgage and saver) fall and 40 years can become the norm, plus there could be more HtB.

If prices fall George and Mark can blame the Brexit uncertainty and if prices rise it is because the economy is revovering.

I suspect that there does not really need to be a trigger as such, one day someone will look at the tulip bulb and say 'I'm not paying that, it is not worth it.' I beleive the whole market currently is driven by sentiment, prices are rising so you must buy now or miss out forever. Carney fuels the fire by saying interest rates will not rise until 2019 at the earliest. When sentiment does turn there will be no ammo left to turn the tide; interest rates going lower will not work like they did in 2009 as they can't go that much lower. And the take up of HtB is actually low but it has had a massive effect in terms of driving up prices ie driving sentiment.

Carney may well be saying that interest rates will not rise until 2019. But actually, he really has little idea of where interest rates will be in 2019. This is the fallacy of the modern Central Banker. They believe they are in total control of the base rate thanks to eye-watering amounts of QE. Via QE, the Central Banks have effectively replaced the market as the primary buyers of government debt. But Brexit is just one example of many internal or external market shocks that could have a significant impact on the strength of sterling in the currency markets in the coming years, and therefore the base rate.

With Carney you often have to read between the lines. What he's not saying is where interest rates will go AFTER 2019. This is key. If there is a significant market shock or series of shocks, it could seriously undermine the BoE's attempts at keeping rates low. The ERM disaster in 1992 was one example. At 10:30 AM on 16 September 1992, the British government announced a rise in the base interest rate from an already high 10% to 12% to tempt speculators to buy pounds. That's a 2% increase in the base rate literally overnight!

Imagine an over-leveraged home owner today, sitting on a 4% variable rate. Then one morning they wake up and hear on the news about an unforeseen external market shock that caused the BoE to intervene in the currency markets to defend the pound. They've raised the base rate by 2% overnight. All of a sudden, that homeowner is sitting on a 6% rate, choking on their cornflakes. And that's just the start of the pain! What if the BoE is required to continue to intervene to shore up the pound, raising rates by 0.25% every month for the next year. All of a sudden, that home owner who just one year previously was sat smug with their 4% mortgage rate, is now staring down at the abyss with a mortgage rate of 9%. In just one year! And actually, depending on the severity and timescale of the problem, mortgage rates could get much worse than that!

Now, you may think that something like the ERM can't happen again; it was a very special event never to be repeated, right? Some people may well believe that the Central Banks are at the height of their powers, with the micro management of the economy absolutely dialled. But with complacency comes increased risk.

It's almost like the arrogance of the Central Banker has been rubbing off on home owners in recent years. We've got a whole generation of new home owners who have never known double-digit mortgage rates in their lifetimes, and genuinely believe that rates are going to stay low forever!

Let's see how that one works out for them in the next decade. Even somebody who only recently took out a 10 year fixed rate will have one hell of a surprise when they come to remortgage at the end of that term!

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I don't think we will get there either. 95% could be as toppy as it gets this time.

Something's got to give soon enough

As if by magic...

http://www.theguardian.com/money/2016/may/04/barclays-100-per-cent-mortgage-how-much-does-it-really-help-homebuyers

I am STR at the moment aiming to exit exactly at the price I paid 8.5 years ago (in real terms) minus the £160,000 + interest paid on the Mort.

May well be too late, but I can't be accused of profiteering.

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In does very much feel like 2006-2007. So chances are we can work out whats coming next.

Bring it on. I can see maybe another 12 months or so of bubbleness outside of London first though.

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In does very much feel like 2006-2007. So chances are we can work out whats coming next. Bring it on. I can see maybe another 12 months or so of bubbleness outside of London first though.

I know there is a lot of posts about articles in the MSM on the forum about bubbles popping over the last few weeks. Having not been so keenly following HPC in the 2006 crash, is this panning out the same with the media? All i can remember is news on banks going under etc, not about house price bubbles etc. Do you remember the MSM reporting similar house price bubbles etc? To me we dont have the financial panic that we had in 2006.

Ta,

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As if by magic...

http://www.theguardian.com/money/2016/may/04/barclays-100-per-cent-mortgage-how-much-does-it-really-help-homebuyers

I am STR at the moment aiming to exit exactly at the price I paid 8.5 years ago (in real terms) minus the £160,000 + interest paid on the Mort.

May well be too late, but I can't be accused of profiteering.

Well that does come with strings, not quite back to the 125% IO cray.

I'm trying to STR, as almost 40% more than the price paid 4ish years ago... Might as well give it a go. If I take into account the money saved on rent vs my cash in a savings account I'm hoping to double my money. Then again its been for sale for 3 weeks and only 2 viewings, so the kite flying hasn't paid off yet. Just need one boomer to do it though. I did spend months doing renovation on it however.

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I know there is a lot of posts about articles in the MSM on the forum about bubbles popping over the last few weeks. Having not been so keenly following HPC in the 2006 crash, is this panning out the same with the media? All i can remember is news on banks going under etc, not about house price bubbles etc. Do you remember the MSM reporting similar house price bubbles etc? To me we dont have the financial panic that we had in 2006.

Ta,

Yes definitely a bit different. I think back in 2006 there was a lot more denial and general acceptance/desire from the public at large for house prices to rise forever as wont that be great for everyone hoorah.

Whereas today you really get the impression a sizeable number of the UK public have had enough and realise its going to come crashing down some day soon. And that may not be a bad thing.

In terms of the 'trigger' - looking like there are a few on the horizon that could do the job. China/Brexit/Middle east being the most obvious.

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In terms of the 'trigger' - looking like there are a few on the horizon that could do the job. China/Brexit/Middle east being the most obvious.

Heres hoping so, i STR last year, and the last year has been disastrous as i watch the prices rise hugely over the last year, now finding i can no longer afford a 4 bed, which was the reason for selling up.

Personally i think Brexit will be the trigger, if that does happen, if not, im screwed and will be forced back into a 3 bed or even a 2 bed if the prices rocket after we stay in!

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I know there is a lot of posts about articles in the MSM on the forum about bubbles popping over the last few weeks. Having not been so keenly following HPC in the 2006 crash, is this panning out the same with the media? All i can remember is news on banks going under etc, not about house price bubbles etc. Do you remember the MSM reporting similar house price bubbles etc? To me we dont have the financial panic that we had in 2006.

Ta,

I too would like to know this. I didn't follow the market in 2006 (was out having fun being young...) so have no recollection. At what point did people start to reduce their asking prices? Was it once Northern Rock went under and they saw people queuing to withdraw their cash on the TV?

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I too would like to know this. I didn't follow the market in 2006 (was out having fun being young...) so have no recollection. At what point did people start to reduce their asking prices? Was it once Northern Rock went under and they saw people queuing to withdraw their cash on the TV?

Nope - there was a fair bit of denial first.

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I think the main catalyst in 2006 was the banks not approving lending due to their fear of solvency and fear of subprime. This had the knock on that there were few buyers and they could name their price if they were in a position to proceed. There are always forced sellers, and strong hands who will ride it out, after all HPI is forever. Since i wasnt buying at the time (trying to keep hold of a job in a recession) i dont remember how the media portrayed the crash.

From what i see we are certainly no where near that position at the moment with GOs HTB and other props and the economy awash with free money available to infinity at 0.5%.

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Heres hoping so, i STR last year, and the last year has been disastrous as i watch the prices rise hugely over the last year, now finding i can no longer afford a 4 bed, which was the reason for selling up.

Personally i think Brexit will be the trigger, if that does happen, if not, im screwed and will be forced back into a 3 bed or even a 2 bed if the prices rocket after we stay in!

have they really increased that much in a year?

maybe asking prices have but selling prices not so much, and are likley to fall following the new budget.

Im three weeks into my house being on the market and thinking i left it too late

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You've missed the boat !!

Oh no that's only for people buying.

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