House prices..

JAMAL said:
The reason i ask Bug one is that i can understand you shrugging off any crash if you have bought at THE VERY TOP of the boom, if you are planning on staying there for a while and the repayments are comfortable then thats great and you will have no problems.

But at this point in time anyone saying there isn't a correction coming needs to "get real" :)

I was speaking to a women that we bought a horse off last week and she was an estate agent, she said that nearly every house they have been dealing with for the last 2 months was a reposesion, its very sad that people are in that situation.

This is an area where a decent 3 bed deatched is only £150k too!!
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Wow you must live in a s### hole! :eek: lol, only joking! ;)
 
HangTime said:
Viewing that data, we have seen falls of over 10% in the past, for example Q4 1990 prices were more than 10% lower than in Q4 1989.
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Okay, we saw 10.7% as the peak Q4 on Q4 rate last time as you say. We've never seen a calander year lose as much as 10% before though, it looks like 2008 will go down as the fastest falling year ever.
 
JAMAL said:
I was speaking to a women that we bought a horse off last week and she was an estate agent, she said that nearly every house they have been dealing with for the last 2 months was a reposesion, its very sad that people are in that situation.
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Add credit card bills, the amount of people i see and know who use credit cards to buy petrol, food.... basic necessities you wonder are they living off the credit or paying it straight back, I always buy food and petrol on debit/cash as i know its going straight out.

Credit cards, loans, re-mortgage are hitting home, 2-3 years ago it was ok to spend, now its the opposite and why because everybody wants the money they lent out.
 
I/we spend a lot more on credit card than I used to (especially for food and petrol), and that's not because I'm hard up or anything, in fact I've never been better off. I've just grown to appreciate the benefits (interest free, building up credit rating) and convenience.
 
HangTime said:
I/we spend a lot more on credit card than I used to (especially for food and petrol), and that's not because I'm hard up or anything, in fact I've never been better off. I've just grown to appreciate the benefits (interest free, building up credit rating) and convenience.
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Same here. Paying be credit and then paying off the balance at the end is the best way forward. If you have a 0% deal then all the better.

I currently get 0% on purchases till September, so everything goes on there. Meanwhile the money saved, goes into a savings account. In Sept, this money will be used to pay off the CC bill and I pocket the difference.
 
HangTime said:
I/we spend a lot more on credit card than I used to (especially for food and petrol), and that's not because I'm hard up or anything, in fact I've never been better off. I've just grown to appreciate the benefits (interest free, building up credit rating) and convenience.
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I use a Tesco clubcard mastecard, and buy my petrol from Tescos as well as the weekly shop.

We get £60 back in vouchers every quarter to be spent in a number of local resturants, going out this Sunday night as it happens.

Whats not to like about that ?
 
Stolly! I do the same! We've been out three times this year already with friends on the vouchers, think it's cost us about £30 in drinks as we paid for the meals in tesco restaurant vouchers!!
 
I buy all my petrol with a Shell Mastercard. The full amount gets paid off each month by direct debit, and I get 3% cash back.
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"House prices fell 2.5% in May and was the 7th month of continuous falls.

The monthly decline, the largest since the lender started compiling records in 1991, wiped 5,000 pounds off the value of the average home and took prices 4.4 percent lower than a year ago -- the sharpest rate since the 1992 economic slump."

Negative equity here we come.
 
I can't really see negative equity being an issue for that many people just yet - it's only really going to affect people who had a very high LTV to start with, took out a long-term mortgage very recently, or have been missing mortgage payments. House prices are up 39% on the level 5 years ago so most people are wallowing in equity - iirc the rough total_mortgage_debt:equity ratio in the UK is around 25-30%.

Even if you just look at FTB, the average LTV is ~85%, so it stands to reason that we'll need much larger falls before the average FTB - never mind average homeowner - has to face the spectre of NE.
 
HangTime said:
I can't really see negative equity being an issue for that many people just yet - it's only really going to affect people who had a very high LTV to start with, took out a long-term mortgage very recently, or have been missing mortgage payments.
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And even then, it only affects those who absolutely must move or those who can't afford slightly higher interest rate after initial offer is over (in which case they weren't prepared for regular repayments any way)
 
HangTime said:
I can't really see negative equity being an issue for that many people just yet - it's only really going to affect people who had a very high LTV to start with, took out a long-term mortgage very recently, or have been missing mortgage payments. House prices are up 39% on the level 5 years ago so most people are wallowing in equity - iirc the rough total_mortgage_debt:equity ratio in the UK is around 25-30%.

Even if you just look at FTB, the average LTV is ~85%, so it stands to reason that we'll need much larger falls before the average FTB - never mind average homeowner - has to face the spectre of NE.
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You forget about the swathes of people who took out 100% or even 125% mortgages in the last few years. As for affording any hike in monthly payments, take a look at the number of interest only mortgages taken out in the last few years, virtually all of which I would imagine are chosen because they can't afford the small step up in cost to a repayment mortgage.
 
Well here's some interesting reading from the Guardian this morning! Apparantly 250,000 people are now in negative equity already.



"After months of gloomy forecasts, analysts have finally confirmed the news that homeowners had been dreading for months: that large numbers of British householders have slipped into negative equity.

According to the investment bank Citigroup, a quarter of a million of them now owe more than their properties are worth since house prices started to drop at the end of last year."

http://www.guardian.co.uk/money/2008/jun/01/houseprices.housingmarket
 
carpmaster said:
You forget about the swathes of people who took out 100% or even 125% mortgages in the last few years. As for affording any hike in monthly payments, take a look at the number of interest only mortgages taken out in the last few years
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I forget about them? Haven't I covered that with "going to affect people who had a very high LTV to start with" - unless you deem 100/125% LTV not to be very high?

As for the interest-only mortgages, as I've previously mentioned in this thread, repayment mortgages are far more common nowadays than during the last crash:

"In the three years to 2007, 71% of first-time buyers' mortgages were made on a capital and interest repayment basis compared to only 17% in the three years to 1989,"

Obviously this only refers to FTB, but I can't imagine that interest-only mortgages are more common amongst homemovers.
 
HangTime said:
I forget about them? Haven't I covered that with "going to affect people who had a very high LTV to start with" - unless you deem 100/125% LTV not to be very high?

As for the interest-only mortgages, as I've previously mentioned in this thread, repayment mortgages are far more common nowadays than during the last crash:

"In the three years to 2007, 71% of first-time buyers' mortgages were made on a capital and interest repayment basis compared to only 17% in the three years to 1989,"

Obviously this only refers to FTB, but I can't imagine that interest-only mortgages are more common amongst homemovers.
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You supposed that negative equity isn't affecting that many people at the moment whereas according to the article in the Guardian dated today above, it affects a quarter of a million people already. Unless you believe that a quarter of a million people isn't that many then I would suggest you are incorrect in your suppositions.

I find it hard to believe the quoted figures for interest only versus repayment mortgages, but anything is possible. Can you post a source for these?
 
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