Friday, Nov 10, 2006

More homeowners in danger of losing their homes as rates rise

Times Online: First-time buyers left teetering on the brink

Homeowners who are already struggling to pay their mortgage bills, such as first-time buyers and young families, could be pushed over the edge into severe debt by the interest rate rise.

Posted by Paulm @ 01:05 PM (385 views)
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14 Comments

1. inbreda said...

Sorry - but if they haven't even given themselves enough breathing space to cope with a 0.25 rise then I have no sympathy. It is truly pathetic.

Bring on some more rises - let's see natural selection in action.

Friday, November 10, 2006 01:18PM Report Comment
 

2. paul said...

This is the big question. If it's a toss up between reigning in inlfation and crashing out the housing market, which one will Mervyn choose? Self interest will ultimately decide I think, and inflation could be left to run away.

Friday, November 10, 2006 01:29PM Report Comment
 

3. george monsoon said...

Buying a house is the most risky and costly purchase most people will ever make. If you do not do the homework on this one, then you deserve to fall on your @rse.

I say hike the rate just enough to tip the market into freefall!!

I have done the homework and concluded that I cannot afford to risk buying at the moment. Risk of inflation, unemployment, income issues if my partner has to stop work to raise a child..

All these factors should be considered by any person or couple wishing to buy.
Like Imbreda says, natural selection. If you don't do the prep work, you deserve to fail..

Friday, November 10, 2006 01:34PM Report Comment
 

4. george monsoon said...

sorry I missed interest rates.. probably the most important factor.. ...

and just to add, who the hell in their right mind would take on an interest only mortgage??

Friday, November 10, 2006 01:35PM Report Comment
 

5. kpjcomp said...

>> This is the big question. If it's a toss up between reigning in inlfation and crashing out the housing market, which one will Mervyn choose?
>> Self interest will ultimately decide I think, and inflation could be left to run away.


Well here's my theory, the worst thing that could happen to the banks is if inflation runs away, it would just de-value the dept. Not good for banks!!

So if the bank really do have control and self interest will ultimately decide, I'd say he'd choose inflation.

Friday, November 10, 2006 01:57PM Report Comment
 

6. sovietuk said...

Article says "The number of repossessions has almost doubled in the past year",

sounds like history repeating itself. People never learn, same old cycle round and round it goes.

Friday, November 10, 2006 02:17PM Report Comment
 

7. george monsoon said...

You would think the generations that were burned the last time round, would warn those stepping into the market now?


Sheeple power!!

Friday, November 10, 2006 03:24PM Report Comment
 

8. japanese uncle said...

The large picture is:

Those BTL properties have been and will remain belonging really to banks and BSs all the time, where those stupid BTlers are supposed to pay extortionate fees in the form of mortgage repayment and repair/maintenance costs every month, in return for the illusionary satisfaction that they are owning properties, allowing them to think "Damn, I am too smart". The reality is they were induced into the death trap where just one careless silly decision will keep them under the slavery for the rest of their lives. Watch out!

Friday, November 10, 2006 03:43PM Report Comment
 

9. Jolo said...

george
I think the problem is the generations burnt before haven't learnt from last time round. Most have become mews and are praying on blind faith that house's will keep rising.Sadly their choosing to forget the past and trying to convince the next generations (as well as themselves) that house price's will only ever go one way.
It's all laughable really, I'll keep saving and biding my time.

Friday, November 10, 2006 05:11PM Report Comment
 

10. Nohpc said...

George Monsoon you play life for safe it's a wonder you get any enjoyment out of it at all. I agree that one should think through before taking on major decisions but you have to take chances too. I get the feeling you have never taken a chance in your life from the way you talk.

Saturday, November 11, 2006 08:40AM Report Comment
 

11. inbreda said...

Everybody seems to think that Merv has a decision to make....inflation or house prices.

To be honest, I think that house prices are doomed irrelevant of what Merv does. And I'm sure he's only too aware of the UKs sensitivity to IRs because of their enormous debt. I think this was in his mind last week when he was lamenting the fact that house prices are not counted in measures of inflation - his remit has not allowed him to control house prices, but he knows he's going to get the blame if he pops the bubble by raising rates. His hands are tied.

Merv...take the money and run.

Saturday, November 11, 2006 11:45AM Report Comment
 

12. Test said...

what ever they say, prices will keep on rising

Saturday, November 11, 2006 09:28PM Report Comment
 

13. Lem said...

Sorry nohpc, have to agree with george. It all boils down to being responsible for yourself. Im guessing the main reason that people on this blog, who are, in their majority, intelligent people, haven't made a fortune from run away house prices is that they have been taught, in some point in their lives that you get nothing for nothing. All I want is a place to call my own. Not much to ask in a developed society. Yet I can still remember my father's plight during the last crash. Negative equity doesn't sound anywhere near as bad as it should. What has been happening during the last five years has been fuelled by greed. Im sure the saying goes somewhere along the lines of 'any fool can learn by their own mistakes'. My apologies for the long sentences.

Sunday, November 12, 2006 01:18AM Report Comment
 

14. Moog said...

I don't blame the FTB's....have a couple of young friends who are trying to buy at present. They are terrified that they will never be able to get on to the market because of the apparent never ending increase in prices, and lenders are all too happy to profit on this fear by lending increasingly absurd amounts of money. Even a so called "independent" financial advisors is pushing them to take out a 30 year MTG at 5x their combined salaries!

Sadly the FTBs are victims in this situation. I have less sympathy for BTL buyers, who clearly seek to profit from this situation rather than house themselves. But despite my sympathy for FTBs, I hope that the rate rises push the market down as few people getting burnt now will make house ownership feasible for all in future.

Sunday, November 12, 2006 01:57PM Report Comment
 

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