Jump to content
House Price Crash Forum

Subprime In The Uk. Will It Be The Trigger For Big Falls


equitystasher
 Share

Recommended Posts

There are many posters on here pointing to how interest rates and lending criteria will affect house prices.

At this moment in time we are in stagnation and we are at a critical point on whether house prices will carry on or slide.

Many on here and the press are pointing to the BoE jumping in and saving the market. But are we at the point of no return?

There is a possibility that in the coming 3 months with the BoE intervention and the US leading the way to cutting rates we could see lower rates here either through libor dropping or the BoE taking the US lead. Arguments aside lets just assume for a moment that there are lower rates that reach the consumer. Will the crash still take place?

I personally think yes. Even with lower rates risk pricing has now changed . All that packaging up of cheap subprime tosh and hiding it away has evaporated over night. Subprime lending is now extinct. How many subprime loans will default at the new level with all that crappy property that will be thrown onto the market with no buyers? This is a poison that will spread through all housing indexes and will turn already shaky confidence.

I do believe that it is a whole raft of things that will cause the crash but if interest rates are lowered do you think they could reinflate the housing bubble?

Link to comment
Share on other sites

I personally think yes. Even with lower rates risk pricing has now changed . All that packaging up of cheap subprime tosh and hiding it away has evaporated over night. Subprime lending is now extinct. How many subprime loans will default at the new level with all that crappy property that will be thrown onto the market with no buyers? This is a poison that will spread through all housing indexes and will turn already shaky confidence.

I do believe that it is a whole raft of things that will cause the crash but if interest rates are lowered do you think they could reinflate the housing bubble?

....agreed ....there will not be enough credit around in the future to keep the weak end of the market afloat....less money in the pot means lower prices.....simple logic....... :o:o:o

Edited by South Lorne
Link to comment
Share on other sites

I do believe that it is a whole raft of things that will cause the crash but if interest rates are lowered do you think they could reinflate the housing bubble?

Honestly - they've kept it going for so long, who knows how much longer those liars in control can keep it going?

I believe the govenment in the UK will keep HPI going at virtually any cost - they have proved that time and time again.

Frankly I've reached the point where it hardly seems worth working and saving for a house anymore, I may as well slack off and figure out a less stressful existence abroad. Hear US property is going cheap now... :lol:

What will happen to the UK when almost all of the quality recent graduates *ck off to less expensive countries?

And even more intriguingly, who the hell will buy their (our) parent's insanely overpriced "family homes" when they need to downsize in the next 10 years?

Nobody I know despite city salaries and bonuses can afford "family homes" anymore - we're all living in flats and tiny houses. The whole idea of a "family home" is a sick joke AFAICS. :(

Edited by justAnotherFTB
Link to comment
Share on other sites

There are many posters on here pointing to how interest rates and lending criteria will affect house prices.

At this moment in time we are in stagnation and we are at a critical point on whether house prices will carry on or slide.

Many on here and the press are pointing to the BoE jumping in and saving the market. But are we at the point of no return?

There is a possibility that in the coming 3 months with the BoE intervention and the US leading the way to cutting rates we could see lower rates here either through libor dropping or the BoE taking the US lead. Arguments aside lets just assume for a moment that there are lower rates that reach the consumer. Will the crash still take place?

I personally think yes. Even with lower rates risk pricing has now changed . All that packaging up of cheap subprime tosh and hiding it away has evaporated over night. Subprime lending is now extinct. How many subprime loans will default at the new level with all that crappy property that will be thrown onto the market with no buyers? This is a poison that will spread through all housing indexes and will turn already shaky confidence.

I do believe that it is a whole raft of things that will cause the crash but if interest rates are lowered do you think they could reinflate the housing bubble?

Agreed the tightening of restrictions and the correct pricing of mortgage risks will see the sub prime contract contract significantly and to a certain extent BTL mortgages which carry higher than average risks will also fuel a reduction in demand particularly at the entry level of the market

Link to comment
Share on other sites

Honestly - they've kept it going for so long, who knows how much longer those liars in control can keep it going?

I believe the govenment in the UK will keep HPI going at virtually any cost - they have proved that time and time again.

Frankly I've reached the point where it hardly seems worth working and saving for a house anymore, I may as well slack off and figure out a less stressful existence abroad. Hear US property is going cheap now... :lol:

What will happen to the UK when almost all of the quality recent graduates *ck off to less expensive countries?

And even more intriguingly, who the hell will buy their (our) parent's insanely overpriced "family homes" when they need to downsize in the next 10 years?

Nobody I know despite city salaries and bonuses can afford "family homes" anymore - we're all living in flats and tiny houses. The whole idea of a "family home" is a sick joke AFAICS. :(

I think you are correct in saying that they want to keep the wheels turning. But can they stop a correction in house prices? This animal that they have had a hand in creating has got so large that i am not sure that they can control it?

This is such a huge animal as I understand it that the tinkering that the central banks are doing by dropping rates will not get the amount of approvals in both numbers and size of mortgages rolling to keep prices moving up. Plus the fact that peole watching a run on a high street bank,interest rate rises and doom and gloom in the media may make one or two but not all stop and think if they really want to mortgage themselves up to the eyeballs.I am just hoping that it is enough.

If we get a buyers strike for even just 3 months and we get MoM that will snowball the strike. Just like people running to jump in when prices rise we will see buyers sitting on their hands and other rushing for the exit.

I think that once the repos hit for the sub prime then this will hasten falls like in the US. There are alot of dodgy loans that will jump in price and the sub prime lenders do not hang about if someone defaults.

I am also wondering if the banks en-masse looking at house price stagnation will be more inclined to reposses sooner rather than later to try and get the maximum amount at auction.

Link to comment
Share on other sites

Agreed the tightening of restrictions and the correct pricing of mortgage risks will see the sub prime contract contract significantly and to a certain extent BTL mortgages which carry higher than average risks will also fuel a reduction in demand particularly at the entry level of the market

Currently the Banks view BTL as lower risk of default. I personally can't see how but maybe the baks historical statisitics are masked by 10 years of rising prices and the fact that before this period most landlord were experienced with low LTV.

Do you think this might change?It might take a few BTL defaults before this loop is tightened?

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
 Share

  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.