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bobby9983

Why It'll Get Worse, When It Will End & Why Usa Is Mad

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I keep trying to say that the credit crunch & subsequent house price crash was an imported problem and that the UK is an unfortunate victim of circumstance. On reflection I have to admit that I have been persuaded by some of the good folk at HPC that our market was indeed overvalued and our consumers overindebted. I have also been forced to eat humble pie as our once great banking institutions have been found out to be greedy, lying ne-er do wells. Like their American counterparts.

But I still maintain that as that the greed and the lying is where the comparison ends and when the American problem subsides our banks will be able to start lending normally again and the crash could stop. The question therefore is, when will the American problems will end will this signal the bottom in the housing market?

This chart from Credit Suisse via the IMF shows the heavy subprime resets in 2008, plus it shows the reset problems with Alt-A and Option ARM loans in later years.

IMFresets.jpg

This graph tells me three things. The first is that mortgage funding problems will continue well into the next decade as there are bigger losses yet to come, it will also mean that it will get worse before it gets better and it also tells me that we won't crash as hard as the US as our mortgage problems are not going to be anywhere near as bad.

It's fair to say that the American crash started when billions of sub prime loans reset, people couldn't afford their mortgages, walked away, homes foreclosed, neighbourhoods lost residents, got rundown, prices fell. Vicious circle.

According to many the next big bomb about to go off which could potentially makes things a lot lot worse are the Option Arm resets which peak at the end of 2011. Now for those of you that don't know an Option Arm is it's a loan where the borrower gets to pay a token payment in the early years much lower than even interest only. Financial suicide.

The principal owed and accruing interest then gets added on to the loan over the next usually five years until the loan resets. At current rates that will be onto about 7% meaning potentially a seven fold increase in mortgage payments if they started at 1% and between a 10% or 25% higher mortgage balance than when they started. Now considering most of these loans will be in negative equity by then anyway you start to realise that the fun for the typical schadenfraudian house price crasher really has just begun.

Now on the basis that as bad as it could get over here due to the amount we owe collectively. The worst it's going to get on the mortgage side is that a small percentage of the population will have to languish on the SVR and have their mortgage payments go up by 3%, even if they got the best rates on offer two years ago at 4.5%. Some people will have to go onto repayment or part repayment to start paying loans off if house prices fall significantly.

It won't take long for the big investors these days the SWF's to realise that the Americans committed mass financial suicide and we are different. It might just allow us to get our finance industry going again without a corrupting American influence (as it was the American influx during 2004/2005 that really kick started our reckless phase with their ridiculously low rate sub prime self cert and second charge lending).

But that's as long as what is going to happen over the pond over the next few years doesn't take us and the rest of the world down with them.

Edited by bobby9983

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Good post bobby - and quite in keeping with today's feelings of optimism (misguided). We're in a much worse situation than the US because our houses are far more overpriced. This means that we're much more sensitive to changes in mortgage availability. Also we can see how the US has crashed and will be doomed to follow them like a hang glider pilot trying to avoid a tree in a field and ending up hitting it.

We're doomed - or rather those who have bought are doomed and rightly so.

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We're doomed - or rather those who have bought are doomed and rightly so.

Yep, the housing market is going down in flames and there is nothing anyone can do about it, they can only make things worse... which sadly they (the Government, CB's and Banks) are going to prove :(

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Good post bobby - and quite in keeping with today's feelings of optimism (misguided). We're in a much worse situation than the US because our houses are far more overpriced. This means that we're much more sensitive to changes in mortgage availability. Also we can see how the US has crashed and will be doomed to follow them like a hang glider pilot trying to avoid a tree in a field and ending up hitting it.

We're doomed - or rather those who have bought are doomed and rightly so.

Agreed. Our houses are much more overpriced and we've been badly hit by the funding problems, seen by the stellar drop in prices.

What I was trying to convey and will continue to until I'm blue in the face is that the UK problem with overvalued housing can be corrected much more easily i.e. with big fall, than the US can correct their horrorshow mortgage market.

If I put it a different way, despite the lower house prices to income over in the US, the mortgage payment resets and ridiculous negative amortization products coupled with the ease with which people can walk away from their homes, will make our coming problems look like child's play compared to theirs.

I mean, I really like Mr Mortgage from ml-implode as he really tells it like it is/was in the US mortgage market. You just wouldn't get a guy like that over here because there is literally nothing to talk about!

Edited by bobby9983

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"start lending normally again and the crash could stop" :lol:

You don't consider that recent credit binge madness as normal do you? It was anything but normal.

125% Mortgages?

100% Mortgages?

Lending to totally uncredit worthy people?

Liar loans?

6,7,8 x earnings to buy a Baratts shoebox?

Theres no chance of them lending like that again. Not for another 20 years at least. Not until the pain from this debacle has been forgotten.

House Prices will be back to 3 x average earnings within a few years, and there's no stopping it.

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I'm not convinced

We're more in debt

Our economy is much more reliant on financial services

Our banks start going belly up before theirs do, even though their housing market crash is well ahead of ours

I do agree that the ARM's, the sheer lunacy of NINJA mortgages and the non-recourse nature of US mortgage debt makes walking away from houses in negative equity more likely in the USA. But this is just one ingredient of the coming storm

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I think there has been a lot of liar loan type stuff in the UK as well, which is still to be revealed. Plus a lot of UK banks have bought into the US housing market via all the MBS type stuff, so there is a real umbilical- their crash and ours are not just paralell, they are joined at the hip.

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I'm not convinced

We're more in debt

Our economy is much more reliant on financial services

Our banks start going belly up before theirs do, even though their housing market crash is well ahead of ours

I do agree that the ARM's, the sheer lunacy of NINJA mortgages and the non-recourse nature of US mortgage debt makes walking away from houses in negative equity more likely in the USA. But this is just one ingredient of the coming storm

Hmm, don't discount the power of change. I fully expect many of the builders, double glazing salesmen and even bankers that will lose their jobs jumping straight into the next bubble that's coming - renewable energy - expect to get a knock on the door soon from your friendly wind turbine salesman. It's inevitable.

Thanks for agreeing with me about the US mortgage market being far worse than ours.

start lending normally again and the crash could stop" laugh.gif

You don't consider that recent credit binge madness as normal do you? It was anything but normal.

125% Mortgages?

100% Mortgages?

Lending to totally uncredit worthy people?

Liar loans?

6,7,8 x earnings to buy a Baratts shoebox?

Theres no chance of them lending like that again. Not for another 20 years at least. Not until the pain from this debacle has been forgotten.

House Prices will be back to 3 x average earnings within a few years, and there's no stopping it.

You haven't looked at the stats to back your claims up have you. No one got 8 times income, 100% - 125% lending was small in comparison to that in the US were talking small number percentages.

Self cert is less than 10% of the market and not every self cert loans is fraudulent only the ones you see on the telly because lets face it the valid ones wouldn't make good TV would they?

6,7,8 times earnings? Who did that then? It's a myth that lending is done at these levels. Income multiples on mortgages are an average of 3.1 times income and the average loan to value is 78%.

Lending to uncreditworthy people, i.e. sub prime, less than 10% of market and bundled in with self cert. In the US it's 20% and that's before you take into consideration the ticking time bomb that is the Alt-A and Option Arm market, which we don't have.

Our main problem is that we've got roughly 25% of all mortgages on interest only but you would have to think that with 25 years to go and inflationary pay rises people will be able to convert to repayment at some point.

Oh and I did forget about our very own Mr Mortgage, Eric Pebble, although he's not quite as eloquent or knowledgeable as Mr Mortgage.

Although his fonts are much bigger and red! (so glad I don't know how to do that.

So it looks like I've just batted all your arguments out of the park. Any more?

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I think there has been a lot of liar loan type stuff in the UK as well, which is still to be revealed. Plus a lot of UK banks have bought into the US housing market via all the MBS type stuff, so there is a real umbilical- their crash and ours are not just paralell, they are joined at the hip.

Agreed, but it's not as bad as the US.

Our banks were far more stupid for buying the US crap and over reliance on securitisation than they we're for silly lending over here.

Well, maybe apart from Northern Rock and B&B (whose MX brand did get very loose in BTL over the last 3 years). A&L were about to get silly but the credit crunch put paid to that.

Edited by bobby9983

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I keep trying to say that the credit crunch & subsequent house price crash was an imported problem and that the UK is an unfortunate victim of circumstance.

but then, you would.

you also would forget that BTL that doesnt add up is as bad as sub prime.

nor do you fully consider that the interest rates point upwards.

but thats ok. i enjoy the 'retro' feel of your posts.

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Guest An Bearin Bui
Hmm, don't discount the power of change. I fully expect many of the builders, double glazing salesmen and even bankers that will lose their jobs jumping straight into the next bubble that's coming - renewable energy - expect to get a knock on the door soon from your friendly wind turbine salesman. It's inevitable.

Thanks for agreeing with me about the US mortgage market being far worse than ours.

You haven't looked at the stats to back your claims up have you. No one got 8 times income, 100% - 125% lending was small in comparison to that in the US were talking small number percentages.

Self cert is less than 10% of the market and not every self cert loans is fraudulent only the ones you see on the telly because lets face it the valid ones wouldn't make good TV would they?

6,7,8 times earnings? Who did that then? It's a myth that lending is done at these levels. Income multiples on mortgages are an average of 3.1 times income and the average loan to value is 78%.

Lending to uncreditworthy people, i.e. sub prime, less than 10% of market and bundled in with self cert. In the US it's 20% and that's before you take into consideration the ticking time bomb that is the Alt-A and Option Arm market, which we don't have.

Our main problem is that we've got roughly 25% of all mortgages on interest only but you would have to think that with 25 years to go and inflationary pay rises people will be able to convert to repayment at some point.

Oh and I did forget about our very own Mr Mortgage, Eric Pebble, although he's not quite as eloquent or knowledgeable as Mr Mortgage.

Although his fonts are much bigger and red! (so glad I don't know how to do that.

So it looks like I've just batted all your arguments out of the park. Any more?

OK, so they're the official figures: what about the evidence journalists uncovered relating to routine income fraud and fake valuations? They've been discussed regularly on this site and there was one some months ago on the BBC which interviewed amateur BTL-ers who had bought up properties on fake valuations (e.g. a place valued at 300k for the mortgage deal when it would only fetch 250k on the market but the additional 50k was added on to act as a fake deposit for the BTL-er so they could get appear to have a lower loan-to-value and thus get a BTL mortgage). The documentaries that uncovered this evidence aren't from amateur internet sleuths but are from the BBC Panorama etc. Plenty of evidence given too of mortgage brokers telling applicants to lie about their income on applications and I know personally of people who've done this.

The official statistics might look good but I for one wouldn't trust a single thing coming out of the UK mortgage or property industry as it currently is run. They are inveterate liars and their entire industry is based on fraud and deception. Behaviour that would only happen at the sleaziest two-bit boiler room operation in the world of shares is par for the course with property. The whole industry is in dire need of stronger regulation and transparency...

...but hey that's just my personal opinion.... :D

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Guest KingCharles1st

That is some nifty graph- I can see where you are going with this..

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OK, so they're the official figures: what about the evidence journalists uncovered relating to routine income fraud and fake valuations? They've been discussed regularly on this site and there was one some months ago on the BBC which interviewed amateur BTL-ers who had bought up properties on fake valuations (e.g. a place valued at 300k for the mortgage deal when it would only fetch 250k on the market but the additional 50k was added on to act as a fake deposit for the BTL-er so they could get appear to have a lower loan-to-value and thus get a BTL mortgage). The documentaries that uncovered this evidence aren't from amateur internet sleuths but are from the BBC Panorama etc. Plenty of evidence given too of mortgage brokers telling applicants to lie about their income on applications and I know personally of people who've done this.

The official statistics might look good but I for one wouldn't trust a single thing coming out of the UK mortgage or property industry as it currently is run. They are inveterate liars and their entire industry is based on fraud and deception. Behaviour that would only happen at the sleaziest two-bit boiler room operation in the world of shares is par for the course with property. The whole industry is in dire need of stronger regulation and transparency...

...but hey that's just my personal opinion.... :D

Yes agreed on many points, lots of lying etc etc, BTL just like sub prime etc etc but like I said... if Panorama tried to do a program and instead of putting in the clips of people being told to lie, filled it with recordings of standard self cert applications with no funny business done then it wouldn't be much of a program.

Also, you'll notice on all these programs that these people give a situation that is blatantly leading the adviser into offering income inflation and when they give the monthly repayment the people just say. "OK that's great". Do you think that really happens in real life? If I was going to lie about my income to get a house and the payments that came out just weren't affordable, I just wouldn't go for it and that's what most people would do too.

And for your second paragraph, it sounds like you are describing the House of Commons rather than the housing market.

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the average mortgage multiple is 3 times earnings.

WHEW that sure takes a load off.

it goes against every published number out there, but since you said it it must be true.

and luckily you aren't doesn't something strange like mixing all of the old almost paid off mortgages in there and not just counting the newer mortgages that have been given out over the last few years.

and luckily the housing boom coming to a halt won't effect other sectors as well when all of the building and MEWing stops, so there won't be massive unemployment, massive loss of tax revenue, and a very large inability of people to even repay normal mortgages on houses that are losing large chunks of their value every year/month/week.

guess I should run out buy a little something to rent?

care to give me a little loan?

it's obviously a sure thing you know.

money in the bank.

Edited by Mr Nice

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I keep trying to say that the credit crunch & subsequent house price crash was an imported problem and that the UK is an unfortunate victim of circumstance. On reflection I have to admit that I have been persuaded by some of the good folk at HPC that our market was indeed overvalued and our consumers overindebted. I have also been forced to eat humble pie as our once great banking institutions have been found out to be greedy, lying ne-er do wells. Like their American counterparts.

But I still maintain that as that the greed and the lying is where the comparison ends and when the American problem subsides our banks will be able to start lending normally again and the crash could stop. The question therefore is, when will the American problems will end will this signal the bottom in the housing market?

This chart from Credit Suisse via the IMF shows the heavy subprime resets in 2008, plus it shows the reset problems with Alt-A and Option ARM loans in later years.

IMFresets.jpg

This graph tells me three things. The first is that mortgage funding problems will continue well into the next decade as there are bigger losses yet to come, it will also mean that it will get worse before it gets better and it also tells me that we won't crash as hard as the US as our mortgage problems are not going to be anywhere near as bad.

It's fair to say that the American crash started when billions of sub prime loans reset, people couldn't afford their mortgages, walked away, homes foreclosed, neighbourhoods lost residents, got rundown, prices fell. Vicious circle.

According to many the next big bomb about to go off which could potentially makes things a lot lot worse are the Option Arm resets which peak at the end of 2011. Now for those of you that don't know an Option Arm is it's a loan where the borrower gets to pay a token payment in the early years much lower than even interest only. Financial suicide.

The principal owed and accruing interest then gets added on to the loan over the next usually five years until the loan resets. At current rates that will be onto about 7% meaning potentially a seven fold increase in mortgage payments if they started at 1% and between a 10% or 25% higher mortgage balance than when they started. Now considering most of these loans will be in negative equity by then anyway you start to realise that the fun for the typical schadenfraudian house price crasher really has just begun.

Now on the basis that as bad as it could get over here due to the amount we owe collectively. The worst it's going to get on the mortgage side is that a small percentage of the population will have to languish on the SVR and have their mortgage payments go up by 3%, even if they got the best rates on offer two years ago at 4.5%. Some people will have to go onto repayment or part repayment to start paying loans off if house prices fall significantly.

It won't take long for the big investors these days the SWF's to realise that the Americans committed mass financial suicide and we are different. It might just allow us to get our finance industry going again without a corrupting American influence (as it was the American influx during 2004/2005 that really kick started our reckless phase with their ridiculously low rate sub prime self cert and second charge lending).

But that's as long as what is going to happen over the pond over the next few years doesn't take us and the rest of the world down with them.

I like the analysis. BUT, opinions from so called 'economic experts' on the house prices in the last few years have proved to be wrong. Can anyone deny that our economy significantly linked to US economy.

There you go, blame Americans again!!

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I don't think people realise that while our housing crisis is 12-18 months behind the US and the initial downturn in the UK housing is playing out to the same timescales, if the US financial system crashes then we will be like a cork in the ocean.

Our economic crash timescale will be dictated by the US ie if the US can't keep things under control then we won't be discussing house price crashes, we will be discussing economic survival.

All this could happen very fast with very little warning.

This is why following what is occuring in the US is so important.

People in London stocked up on bottled water after 9/11. So there could be a reaction in the UK to world events which would accelerate problems eg food/fuel shortages.

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the average mortgage multiple is 3 times earnings.

WHEW that sure takes a load off.

it goes against every published number out there, but since you said it it must be true.

and luckily you aren't doesn't something strange like mixing all of the old almost paid off mortgages in there and not just counting the newer mortgages that have been given out over the last few years.

and luckily the housing boom coming to a halt won't effect other sectors as well when all of the building and MEWing stops, so there won't be massive unemployment, massive loss of tax revenue, and a very large inability of people to even repay normal mortgages on houses that are losing large chunks of their value every year/month/week.

guess I should run out buy a little something to rent?

care to give me a little loan?

it's obviously a sure thing you know.

money in the bank.

Mr Nice. It's either the time or your tired rhetoric thats making me yawn.

My stats on income multiples are from the Council of Mortgage lenders and before you jump down my throat their figures are accurate, I realise they don't count for ALL the secured lending but the other lenders make up such a small percentage.

Housing Equity withdrawal was at it's very peak 6% of POST TAX INCOME!!! That is from the Bank of England. 6% of average income is my Sky + subscription and my gym membership. Oh dear Mr Murdoch and Fitness First lose a customer it's hardly going to bankrupt the economy.

I personally think you would be mad to buy in a falling market my dear boy wait with me and I'll tell you when we reach the bottom.

Fore!

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Mr Nice. It's either the time or your tired rhetoric thats making me yawn.

My stats on income multiples are from the Council of Mortgage lenders and before you jump down my throat their figures are accurate, I realise they don't count for ALL the secured lending but the other lenders make up such a small percentage.

Housing Equity withdrawal was at it's very peak 6% of POST TAX INCOME!!! That is from the Bank of England. 6% of average income is my Sky + subscription and my gym membership. Oh dear Mr Murdoch and Fitness First lose a customer it's hardly going to bankrupt the economy.

I personally think you would be mad to buy in a falling market my dear boy wait with me and I'll tell you when we reach the bottom.

Fore!

well Bobbers, I guess if you overlook all of the bad news things CAN look pretty good even in the worst of situations.

as the previous poster said, just overlook BTL, it makes things look bad.

overlook the fact that America has a much more dynamic economy than Britain so it's better able to handle rough seas.

overlook the fact that that %6 isn't evenly spread throughout the populace, and is concentrated in certain areas. %40 of the population losing %15 of their income at a time when many prices are going up %15 a year or more, while they are drowning in a sea of debt, COULDN'T be bad could it?

we are just so lucky that we have so many jobs there waiting to catch the slack and pull us out of it.

we would really be screwed if we were full of outsourced jobs, falling wages, and anemic industry.

WHEW!

so was that a no on that loan?

Edited by Mr Nice

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Yes agreed on many points, lots of lying etc etc, BTL just like sub prime etc etc but like I said... if Panorama tried to do a program and instead of putting in the clips of people being told to lie, filled it with recordings of standard self cert applications with no funny business done then it wouldn't be much of a program.

Also, you'll notice on all these programs that these people give a situation that is blatantly leading the adviser into offering income inflation and when they give the monthly repayment the people just say. "OK that's great". Do you think that really happens in real life? If I was going to lie about my income to get a house and the payments that came out just weren't affordable, I just wouldn't go for it and that's what most people would do too.

And for your second paragraph, it sounds like you are describing the House of Commons rather than the housing market.

But the problem is so many did go for it. The liar loans were given to people sold on the thinking that property only goes up , so if you can not pay sell the house and walk away with your profit. I worked on new build house sales until very recently, and saw so much sub-prime I sold my own house. The builders were unable to sell their boxes to ordianary buyers as they were priced out so only idiots with nothing to lose and sold a pack of lies by middle men who got discounts by buying in bulk and selling on to people without deposits putting the imaginary deposit in via the discount from builder bought.

I also saw many of these buyers then letting the flats collecting the rents , not paying the mortgage and just taking the dosh till the place was repossessed. The site I was on till two weeks ago had about 4 places coming up for repossession. The prices had been overinflated at the start and with arrears , costs ect and now prices dropping each one would probley go to auction at about £100,000 less than the mortgage owed on it. How many losses of £100,000 can these banks handle without going bust themselves?

And this has been going on across east London and Essex on a massive scale , and i bet in many other parts of the country as well.

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You haven't looked at the stats to back your claims up have you. No one got 8 times income, 100% - 125% lending was small in comparison to that in the US were talking small number percentages.

Self cert is less than 10% of the market and not every self cert loans is fraudulent only the ones you see on the telly because lets face it the valid ones wouldn't make good TV would they?

6,7,8 times earnings? Who did that then? It's a myth that lending is done at these levels. Income multiples on mortgages are an average of 3.1 times income and the average loan to value is 78%.

Lending to uncreditworthy people, i.e. sub prime, less than 10% of market and bundled in with self cert. In the US it's 20% and that's before you take into consideration the ticking time bomb that is the Alt-A and Option Arm market, which we don't have.

Our main problem is that we've got roughly 25% of all mortgages on interest only but you would have to think that with 25 years to go and inflationary pay rises people will be able to convert to repayment at some point.

Oh and I did forget about our very own Mr Mortgage, Eric Pebble, although he's not quite as eloquent or knowledgeable as Mr Mortgage.

Although his fonts are much bigger and red! (so glad I don't know how to do that.

So it looks like I've just batted all your arguments out of the park. Any more?

Good chart and very interesting.

One point though - I know of 2 people who have bought BTL properties in the UK in the last 3 years. Their income multiples are 8 and 10 times respectively. Both are "tradesmen" and lied to get their loans. In one case, one of them told the bank the loan was for his primary residence and got a normal mortgage. Once it was agreed, he moved out of his place and lives with his partner now, in another property he lied about to get a loan. He erans about 25K a year and has loans of over 200K on the two properties. With rents etc he's just about covered, but will sink once the interest rates rise and/or he loses his job (or his partner).

The other guy is in a similar situation..........

As others have sais on this site - this type of BTL'er is more widespread than the official stats care or dare to show.

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Good post bobby - and quite in keeping with today's feelings of optimism (misguided). We're in a much worse situation than the US because our houses are far more overpriced. This means that we're much more sensitive to changes in mortgage availability. Also we can see how the US has crashed and will be doomed to follow them like a hang glider pilot trying to avoid a tree in a field and ending up hitting it.

We're doomed - or rather those who have bought are doomed and rightly so.

Better post 29929

As you say, the US houses were / are much less overpriced. Plus the US produces things and grows food, rather than having its entire economy based on funny money schemes from the city and housing speculation.

We are all doomed, those who have bought expensive houses doubly so, but we are all doomed!

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I don't think we'll get it as bad as the US. Despite all the overbuilding of flats there's still a shortage of property, especially in the South East.

A nearby council is crying out for property to house tenants.

Long term fundamentals look sound and I can't see the long term property bull market stopping.

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Good chart and very interesting.

One point though - I know of 2 people who have bought BTL properties in the UK in the last 3 years. Their income multiples are 8 and 10 times respectively. Both are "tradesmen" and lied to get their loans. In one case, one of them told the bank the loan was for his primary residence and got a normal mortgage. Once it was agreed, he moved out of his place and lives with his partner now, in another property he lied about to get a loan. He erans about 25K a year and has loans of over 200K on the two properties. With rents etc he's just about covered, but will sink once the interest rates rise and/or he loses his job (or his partner).

The other guy is in a similar situation..........

As others have sais on this site - this type of BTL'er is more widespread than the official stats care or dare to show.

I just don't get that. If it truly was the case then there would be stats on it. All the banks have investors and investors pay their custodians to produce independent data giving an opinion on the future worth of their assets based on macroeconimoic data available and surveys.

How do you think Credit Suisse got that chart I posted about America's mortgage armageddon.

There isn't anything like that on UK data because there really isn't that much of a story. Average BTL rates over the last 3 years have been 6%. Standard variable rates are 7.5%. That's a 20% increase in payments. Whoop de do.

In America as I have shown about 10 billion dollars a month is resetting from 1-3% interest with Negative Amortization (thats an increasing mortgage balance to you and me) to 7% plus. That's between a 250% to 700% increase. It makes BTL look like child's play.

Average BTL loan £100,000, annual interest jumps 1500, that's just over 125 quid a month. Average rent £200 per room per month. Average house has 3 bedrooms. Average rent £600 average mortgage payments at 7.5% £625. If you don't think that landlord, even the one in your example, who probably hasn't got a pension, won't be able service his mortgage payments and even pay more to reduce the capital, even on £25,000 a year, then you are barking mad.

The BTL you need to worry about is the new build flat problem. I would say though that will have 'washed out' of the system by next year. And young forget the enormous capacity of the market to bring about correcting changes. The BTL market now has built a mini industry from the gutter doing sale and rent backs and buying property off distressed sellers at 30% below RICS valuation.

I don't agree with the ethics but you have to admire the ingenuity. Ever heard of 'pound cost averaging'. Even uber bears like capital economics are saying 30% falls, which certainly tallies up with many commentators on here that the view is a return to around 3.5 times average earnings.

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  • 396 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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