The missus and I were discussing about buying again as the average house has had 5K slashed from its price but then this morning after watching the news regarding the massive increase we are looking at for the cost of Gas & Electricity, that discussion may have to be put to rest for a little while longer.
House prices..
- Thread starter fendi
- Start date
What annoys me is that the media this morning were saying it's not going to be too bad this time as not many people will get into negative equity.
Get real !
The number of 100%+ mortgages ( which are usually 95% + unsecured loan ) around which were taken out by people ( like ourselves - although I'm not moaning personally ), at what may appear to be the top of the market for some time, will mean that eventually people could be in negative equity, trying to find a competative remortgage with a requirement of 120% of the property value due to the price drops, in a market where no bank appears to want to be greedy again
Then you have those who've had thier houses a number of years ( ie. bought "cheap" ), who the media don't seem to think will have a problem... really.. where did that expensive extension or conservatory, or the new audi / bmw / TT / people carrier on the drive suddenly appear from ? I wouldn't mind betting we're talking about re-mortgage or equity release / secured loan type scenarios in many cases here - so again, potential negative equity on a massive scale...
Luckily, when our NR fixed rate ends on 2011 ( 6.75 % which seemed expensive at the time ), so does the "loan element" of the mortgage, along with another loan we had to take out, so immediately around £250 per month will be available to cover any interest increases. Until then, however, it's tight, especially with baby-puckdrop recently arrived, and my 80 mile /day commute !
Get real !
The number of 100%+ mortgages ( which are usually 95% + unsecured loan ) around which were taken out by people ( like ourselves - although I'm not moaning personally ), at what may appear to be the top of the market for some time, will mean that eventually people could be in negative equity, trying to find a competative remortgage with a requirement of 120% of the property value due to the price drops, in a market where no bank appears to want to be greedy again
Then you have those who've had thier houses a number of years ( ie. bought "cheap" ), who the media don't seem to think will have a problem... really.. where did that expensive extension or conservatory, or the new audi / bmw / TT / people carrier on the drive suddenly appear from ? I wouldn't mind betting we're talking about re-mortgage or equity release / secured loan type scenarios in many cases here - so again, potential negative equity on a massive scale...
Luckily, when our NR fixed rate ends on 2011 ( 6.75 % which seemed expensive at the time ), so does the "loan element" of the mortgage, along with another loan we had to take out, so immediately around £250 per month will be available to cover any interest increases. Until then, however, it's tight, especially with baby-puckdrop recently arrived, and my 80 mile /day commute !
Just realised I got my maths wrong (it was early!) and I was compounding the wrong way.
It's actually 12.0% annualised falls, not quite so much but still pretty significant.
thats still a huge amount - just goes to show how screwed the system is. What with that and rising inflation this is gonna screw a lot of people. Maybe next time they will think twice about a labour government
obvioulsy the figures tell a story! but those figures are on national average.
i still havent seen one area that just dropped 12% since last may!
obvioulsy the figures tell a story! but those figures are on national average.
i still havent seen one area that just dropped 12% since last may!
Not 12% since May, 12.0% annualised falls based on the last 7 months.
sorry im reading between my boss seeing what im doing lol.
if we go with the 2% in may that has been reported in the media today! i still cant say i've noticed this, where do they focus on to get the figures?
People are just being more relistic with there asking prices now! they cant afford to be greedy!
Maybe only Dolph and his "stagnated" market?
It's actually 26.2% down over the year if it continues at 2.5% per month.
1-((1- 0.025)^12)
Lol, i knew this day would come and bite him on the backside!
Soldato
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Don't worry we have Gordy at the helm, he has promised to steer us through these troubled waters.
If this is sustained, then it will qualify as a crash. However, that's not guaranteed, and furthermore I can still look back and say I've been right more often than wrong on this issue compared to those who have been wishing for a crash for years. I can also say I've been right about a crash not being beneficial because the circumstances that would make it occur mean that all those waiting still won't get their cheap houses
have you seen these effects in your local market? have you seen prices falling off the asking prices around you?
That won't help much as it's sold prices we're interested in. My neighbours have put their house up for £30K above the average sold price over the past 6 months in my road... not surprisingly, it's been on the market a while
Some sellers are refusing to accept reality it seems.That won't help much as it's sold prices we're interested in. My neighbours have put their house up for £30K above the average sold price over the past 6 months in my road... not surprisingly, it's been on the market a while
It's going to take a long time to play out fully.
If people can afford to sit and wait then they will likely do so. It's going to be the forced sellers, e.g. divorcees, houses vacant after deaths, etc. that will determine sold prices for the near future.
Your average Joe puts his house on the market at a price above what others have sold. If it doesn't sell he just keeps in there hoping that someone will eventually make him an offer he will accept.
This situation is different from the early 90s crash at the moment because the falls in house prices have been driven by banks turning off the credit tap rather than unemployment and high interest rates causing people to default on their mortgages.
In 6-12 months I think we'll see the effects of the credit crunch felt more in the real economy when producers can no longer cope with the increased input inflation they're experiencing and start to lay people off. Others will find they can no longer remortgage and get money that way.
In a year or so's time you'll start to see more distressed sellers and things will start to get properly bad.
I've said before that the way I see this going in the long term is a deflationary recession once businesses start to feel the real effects and unemployment starts to head up.
Just my 2p
Soldato
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i have seen a glut of properties not selling around me - thats the way it starts - people are still stubborn and think their house is worth more - its worth what people will pay for it, nothing more. The lucky people are the ones that take the small reduction now and sell their house quickly - everybody else will be chasing the market down. This is happening exactly the same way as any other house market crash in the history of the world and it will be no different this time (although i suspect it will be a lot worse).