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enigmamedusa

If/when There's A Crash...

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will it be difficult to buy a house?

I realise there will probably be more properties available, if for example, interest rates or unemployment is higher causing forced sales. But will the banks stop being so liberal with their borrowing as a result? I can't afford a house now, but I'll now thinking maybe banks won't be too keen to lend me money when the prices are lower :blink:

What do you think?

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Aren't house prices defined by what banks are willing to lend? If the risk to the banks increases then they'll lend less so house prices are forced down? I don't know, makes sense to me anyway...

It doesn't seem that way at the moment though, as HPI went to double figures, the bank just says "fine, forget 3.5 times income, we'll make it 7 times income". So if the prices are falling, do they say the complete opposite?

Edited by enigmamedusa

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It doesn't seem that way at the moment though, as HPI went to double figures, the bank just says "fine, forgot 3.5 times income, we'll make it 7 times income". So if the prices are falling, do they say the complete opposite?

The banks will lend when its a strong market. So if I was to lend you 5 times your salary for a house that £150K then I am not worried if you pay the mortgage or not as the object secured on it i.e. the house is still rising. The risk for the bank is next to nil! AS they can sell the house and get all their capital back.

However, If I was to lend you 5 Times your salary for a house that is £150K I can see the secured element is falling. Lets say it troughs at £100K. Then the bank will not lend you that sum. They may however, say I will lend you £100k of the purchase price and you take the other £50K risk.

The general message of this site is SAVE SAVE SAVE!!! So when it is reallly difficult to get a mortgage if you have 20% or more LTV then it should be a peice of piss :)

TB

Edited by teddyboy

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will it be difficult to buy a house?

I realise there will probably be more properties available, if for example, interest rates or unemployment is higher causing forced sales. But will the banks stop being so liberal with their borrowing as a result? I can't afford a house now, but I'll now thinking maybe banks won't be too keen to lend me money when the prices are lower :blink:

What do you think?

frankly almost by definition buying a house will be difficult if there is a crash, that is why there will be one! The bubble in asset prices, including property, once unwound will have a severe impact on the economy of most western countries. Without delving into the whys and wherefores, no, it won't be easy to buy a house. But at least you won't be either a) bankrupt or B) saddled with a huge debt. That said, if you avoid the pitfalls most of the country will/have fall(en) into (excessive and unserviceable levels of debt), have a high level of cash savings and ensure you either work in a relatively secure industry or are frankly super employable then you will have a better chance than most.

However, I would bet that by the time it becomes readily apparent what is happening, buying a house will be the least of your concerns.

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What do you think?

My thoughts:

Economic climate change ~ worse than global warming.

Unemployment ~ significant factor in low mortgage applications .

Less homes for sale ~ many people trapped. (An Englishman’s home is his prison... again!)

Repossessions ~ predominately on second home / pension investments.

Professional ‘seasoned’ Landlords ~ mop-up bargains.

Mortgage criteria ~ back to normal 3.5 x income, and you must prove with p60.

Banks ~ become Landlords.

Estate agents ~ evolve into air breathing creatures .

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you want to be in the best position do this

1. Do not get yourself any ccj's

2. have at least 2 credit cards you use regulary, not missing a payment

3.do not move house to much if you can ideal is about 3 years at same address

4.make sure your on the electrol role and that the council has you on it for the correct duration

5.contact experian and eqifax and get there 2 pound statutory reports (do not pay any more for them), andf make sure there are no discrepencies in them.

6.Dont apply to many times for credit or have to many credit checks done over a short period, this affects your rating as well.

7.keep working, dont be too proud at what you do either, any job is better than none.

8.save a regular amount

9.use your head do ya realy need a new computer, and **** t-shirts

10.spread a few pound around diffrent investments like isa's, shares, premium bonds ect.

do this and you Will get A1 credit rating and they will throw money at you.

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Guest Winners and Losers

you want to be in the best position do this

1. Do not get yourself any ccj's

2. have at least 2 credit cards you use regulary, not missing a payment

3.do not move house to much if you can ideal is about 3 years at same address

4.make sure your on the electrol role and that the council has you on it for the correct duration

5.contact experian and eqifax and get there 2 pound statutory reports (do not pay any more for them), andf make sure there are no discrepencies in them.

6.Dont apply to many times for credit or have to many credit checks done over a short period, this affects your rating as well.

7.keep working, dont be too proud at what you do either, any job is better than none.

8.save a regular amount

9.use your head do ya realy need a new computer, and **** t-shirts

10.spread a few pound around diffrent investments like isa's, shares, premium bonds ect.

do this and you Will get A1 credit rating and they will throw money at you.

Good advice Homeless. I'm so glad you never really went away. Couldnt give up the habit eh? ;)

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Any real signs of this emerging yet?

+ I suppose there are a few more programmes on TV. But I havent seen them myself.

+ High street sales are down

THE REAL MOVE in the direction of Frugality, will be triggered by a bursting of the Property Bubble, i reckon

I can't see commercial tv confirming this one. Seeing as most new programming is created to meet a target market that can be sold to the advertisers, I don't think that a viewing demographic of "people who are very tight AND canny with their money" will appeal too much.

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Difficult to BUY?

SURE.

For two reasons:

+ Credit standards will be MUCH tighter, maybe 70-75% loans will be the max.,

+ Emotionally, the crowd will have "gone off" property, and most of your friends and relatives will be

telling you that property is dangerous. (Want to find a cheap market? Look first for the evaporating nuclear cloud over it.)

I agree about the crowd 'going off property' but not about the credit tightening.

I FTBd in the mid 1990s right in the dip in prices and from memory my mortgage was:

95% with 1.8% discounted variable rate for two years (i.e. 1.8% below the lender's mortgage rate)

I also got £1500 cashback. My mortgage was cheaper than renting (£280pm vs £330)

I don't class that as credit tightening!

However, everyone and his dog was telling me I was MAD to buy a house back then.

They told me property was 'finished' after the crash and would not be a good investment for years.

When looking for a house back then the market appeared 'dead' but any decent properties (eg best house in street in good area) were selling in a day or two. You had to be quick!

Edited by Without_a_Paddle

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I think for me, as long as I could afford the payments as an IT analyst OR a shelf stacker I wouldn't care if it was a good investment or not, I'd have a roof over my head and it wouldn't matter what end of the job spectrum I was working at, I'd be able to afford it and thats the main point.

:)

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I think for me, as long as I could afford the payments as an IT analyst OR a shelf stacker I wouldn't care if it was a good investment or not, I'd have a roof over my head and it wouldn't matter what end of the job spectrum I was working at, I'd be able to afford it and thats the main point.

:)

i agree i wouldnt be embarrased to be a IT analyst either as long as i had my own house and a big shed to tinker around in like all men should have.

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I remember during the last crash

you needed a good sized deposit, banks were lending only 75-80%

but you could find the money quite easily

quality properties were hard to find, but they were there. people mostly held on tight hoping the values would rise again

lots of cack was on the market, lots of 2 bedroom soviet-style flats, lots of terraced houses with no central heating and single glazing that needed full renovation

I remember the same dodgy properties were advertized in the local paper again and again

I was looking at 3 bedroom terraces in Enfield and Edmonton in north London in range of 55-70k

A mate of mine bought a lovely semi detached in a nice part of palmers green for 100k and we all thought he was off his rocker and had overpaid

no jobs, I got out of uni and had to do part-time doorwork for 30 quid a night just to make ends meet. remember the piss heads and the glassings and getting attacked with a knife by some crack-addict looking black geezer one night at the door of the **** tavern in edmonton on new years eve.. what wonderful times they were... how i miss the estates of north london...

my dad was going on at me to buy a house buy a house buy a house, i thought sod it, im off travelling for a while til things here improve. spent all my savings globetrotting.

property was such a no-go that we thought it would be cheap forever

what a mug I was

ah well, you live, you learn

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  • 302 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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