Tuesday, April 15, 2014

Don’t worry, this boom will be perfect

Housing crisis overtakes transport as biggest concern for Londoners, poll suggests

House prices always go up forever.

Posted by sneaker @ 09:11 PM (6686 views)
Please complete the required fields.



19 thoughts on “Don’t worry, this boom will be perfect

  • No sign of a HPC today!

    Reply
    Please complete the required fields.



  • The entire situation could have been avoided quite easily by the conservatives laying down the law 4 years ago. It’s the complete lack of regulation, land value tax, BTL tax, zero mortgage regulation that has caused the situation.

    the conservatives could have prevented this and chose not to. Vince Cable warned them, they chose not to listen.

    Reply
    Please complete the required fields.



  • stillthinking says:

    London is the only city in the world where only the unemployed can live in the centre. 200 a month unemployment benefit, but 1500 housing benefit.

    Reply
    Please complete the required fields.



  • It’s not a ‘boom’ is it? It’s a panic.

    Panic to buy somewhere before everywhere is unaffordable due to failed government policy deliberately pricing out the young.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    They are all completely mad and I will sit this one out while renting. And cheering for a shift to LVT 🙂

    Reply
    Please complete the required fields.



  • Know an agent in the london area had two block viewings yesterday…expected 20+….only 3 turned up
    Property didn’t sell..not necessarily significant but interesting

    Tulip auction in the mania….no one turned up and then the price fell 90% from thereon in

    Sometimes manias just end

    Reply
    Please complete the required fields.



  • I don’t see how these levels of HPI could be sustainable through to the election.

    Maybe MMR has already scuppered it.

    Reply
    Please complete the required fields.



  • Picking up on reticent’s point I think MMR (that’s Mortgage Market Review rather than Measles, Mumps and Rubella) will have an impact in dampening the present madness what I cant quite work out yet is how significant that dampening effect will be.

    Reply
    Please complete the required fields.



  • Thanks Jack, I was going to ask your thoughts specifically. My thinking is that not everyone with 15% will be able to borrow 5x anymore. Not everyone with 10% will be able to borrow 4-4.5% joint anymore.

    You would have to expect that only people with minimal outgoings and spotless credit records would get what they could a month ago. You would also have to assume that those people couldn’t borrow anymore (ie they get 5.5x on 85%LTVs whilst some offsetting spendthrift only gets 4.5x).

    In aggregate, then, you’d have to assume buyers are raising less mortgage finance than a month ago, and that getting a mortgage is also more of a hassle (greater burden of proof etc.).

    But I suspect it’s more significant than that. The rules are being applied differently by each lender, but not so differently as before, where your broker could tell you which lenders cared most about outgoings and which most about credit history, but now they’re all obliged to be concerned about both.

    That said, the real meat in the reforms was stripped out long ago by Shapps and the CML. If it weren’t for the current madness, I doubt the effect would even have been noticeable, but given the current level of momentum, any increased bureaucracy and/or decrease in mortgage availability will probably slow things down considerably.

    Reply
    Please complete the required fields.



  • Sorry, that should have read “those people [with spotless credit] couldn’t borrow any more than they could a month ago.”

    Reply
    Please complete the required fields.



  • Would love to see more opinions on the realistic approach on what will happen. Can any one advise?

    I know that some estate agents do not even know that on April 26th we will see a major change in mortgages being offered. More process and more rigor.

    I personally want a minor dip to happen. Prices have gotten out of control. Within 8 months, the house prices within the area of Lewisham have increased by £120,000. My partner and I have purchased and lost two properties. BOTH fell through due to the vendor changing their minds. Between the first property falling through and the second property, my partner and I had to increase our mortgage request by a further £150,000! Even with that increase we did not secure the 2nd sale. Both NON SALES resulted in a cost to us. Even after the vendors pushing us to move forward with contracts, land registries etc…..we are at the mercy of vendors changing their minds last minute and who pays for that??? Buyers do!! Its great for them, they can change their minds at no cost and go to another agency and put the property up by a further £50,000. I have seen countless occasions with properties within Eltham, Lee, Blackheath, Kidbrooke.

    The main problem for this was as a direct result in allowing people to purchase using the help to buy scheme. I know a lot of people have been helped with the buy to let scheme, but this should have stayed with new properties only. This is the main reason why the increase has happened. Also, people being unrealistic on what they can afford.

    Arghhhhhhh…….. frustrated………… 🙁

    Reply
    Please complete the required fields.



  • reticent, thanks for your input. In simple terms the amount someone can borrow will be assessed on affordability rather than income multiples which will IMO shake things up a bit. I picked up a recent £400k enquiry as second choice to the borrowers existing lender – here is an extract from client/Lloyds correspondence “If you want any other quotes please do not hesitate to contact me. Just to let you know everything is changing with regards to mortgage regulation as from 14th April and that is industry wide not just LLoyds. This means that we will have to reprocess your application again once we have passed this date which could potentially reduce the amount you could borrow as from that date we have to take a lot more commitments into consideration such as school fees, children’s hobbies and your hobbies etc. which may reduce the amount”

    Reply
    Please complete the required fields.



  • @Hawkline – It’s all sounding very bubbly in London. I would back the house hunting off for 12 months. It’s extremely unlikely hat London prices will increase by a further 20% in the next 12 months.
    It’s a gamble you buy now prices could go up and you have a paper profit and POTENTIALLY small mortgage, if the bubble pops and prices collapse you WILL have a smaller mortgage for the next 25/30 years.

    Reply
    Please complete the required fields.



  • @jack c – We applied for a mortgage in Ireland and that was based on affordability.

    If you have kids for example then your maximum amount will be substantially smaller. From memory you needed a minimum post tax income of €1500pcm to even apply for a mortgage and if you had two kids then it was €2500pcm. After that debt was subtracted.
    For two people earning €40k+€18k we could borrow a maximum of €98k and we have no kids. I can’t see the UK banks clamping down that hard, but if they do …. 🙂

    Reply
    Please complete the required fields.



  • How far UK lenders will clamp down remains to be seen but I’ve just had another case where the applicants are having to provide a future repayment plan for student loans (and that hasn’t happened before nor do they normally appear on a credit search)

    Reply
    Please complete the required fields.



  • There is no bubble in the vast majority of areas outside the south of England.
    In my area (N.West), prices are approx 8% less than 2007/8 nominally, and over 20% less in real terms.

    Reply
    Please complete the required fields.



  • Only London and SE house prices back to 2007 levels – The London housing market experience does influence national data, sometimes quite significantly, CML said.

    By the end of 2013 only property prices in London and the south east had actually recovered to their 2007 peak, data from the Council of Mortgage Lenders revealed.

    In an article on the CML website, the trade body admitted the vast majority of the housing market – and the lending to it – that exists outside London is experiencing “nothing like the euphoric conditions” that are filling the capital’s media column inches and broadcast news at the moment.

    The CML stated while the rocketing prices of London were not reflected in the bulk of the country the London experience does influence national data, “sometimes quite significantly.”

    Out of the total 9 per cent annual house price growth in the UK, the CML reported 1 per cent of the increase is accounted for purely because of the influence that London data has on the overall average.

    The trade body stated of the £897bn total outstanding lending in Great Britain among seven major lenders, £230bn (26 per cent) was in London.

    Looking at tenure, when London is excluded, the CML stated the tenure pattern in the rest of the UK follows a path very similar to that in the UK overall – increasing to the mid-2000s and then falling.

    However, when London is excluded, a larger proportion of households own their own home – 67 per cent compared with 65 per cent in the UK overall – while there is a marginally lower incidence of private renting, 16 per cent compared to 17 per cent in the UK overall.

    SOURCE http://www.ftadviser.com

    Reply
    Please complete the required fields.



  • V interesting stuff, Jack.

    Reply
    Please complete the required fields.



  • Cant we see a HPI figure for england excluding London & SE?

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>