davegtt

OK by that theory then you are saying its about to go kaput? Dont think so mate. and even if it did do you really think we will see 50% off the price?

Dream world is what your living in.

john banks

The dreamers are the stupid herd who borrow like there is no tomorrow to buy ****holes IMHO.

106rallye

The whole point is that there is risk involved otherwise it wouldn't be speculation, everyone would do it and get it right 100% of the time!

As you say 50% off prices is unlikely but a drop in prices is possible, - if you look at it the other way, someone with a 120% mortgage is gambling that it will go up by 20% before they want to sell - IMHO not going to happen as quickly as in the past.As long as people are in the position to ride it out then its fine and no one need worry. But if the reports are to be believed then there is a proportion of people who could not do this - thats where the trouble starts.

davegtt

Never said they did? whats this thread about really? the interest rates and property market like I thought it was or a slanging match for the mentally challenged who cant manage money?

Matteeboy

TelBoy

Tell the people who thought oil would be at $100 a barrel this time last year that it's currently on its way back down to $50 a barrel, see what they say about cast-iron investments.

Petem95

What a lot of people seem to forget is that you only need a 33% fall for for prices to revert back to where they were before a 50% rise. I think a lot of the mickey mouse "Im a property investor now" mortgaged-to-the-max landlords probably think a 20% fall would take prices back to where they were before rising 20%!

john banks

Or even a small fall combined with a bit of inflation would also improve affordability as I'm sure others have mentioned.

borat52

I suggest you check your history books again, around when Thatcher came to power in the late 70's interest rates were nearly 20% as a result of the complete pile of rubble the outgoing labour government had turned this country into, she worked hard to bring them down over her time in power and succeeded. Indeed the reason why rates have been low during the NL time is that the last conservative government did such a good job post black wednesday of putting the country back on its feet after making an unforgivable mistake.


The 2 major mistakes the Conservatives made were scrapping MIRAS which induced the housing boom/bust and Black Wednesday. How they could be so stupid on both counts is beyond me but when remembering black wednesday its only right to remember that historically labour are masters at leaving office with high inflation/high interest rates just as they did in the late 70's.

106rallye

Unfortunately they are all linked. A rise in interest rates is amongst other things is supposed to curb inflation by encouraging saving and slowing spending. However when people are in the situation where their debts are too large then they can not keep up.

You can't deny that there are a lot of people acting 'rich' because their properties have increased a lot in value etc. lots of these people are not actually any better off in real terms if its their only property unless they want to downsize or leave the country, but consumer debt has gone crazy, and wage increases have fallen behind.

pslewis

Roll on 10% Interest Rates

It will happen, it always goes full circle ...........

There will be a point at which the Housing Market cannot stand the rate and there is going to be one almighty correction. Not sure what rate it will take - I guess about 7.5%

davegtt

https://www.scoobynet.com/non-scooby...=housing+crash

LMAO I bet Basel lobe is feeling a bit sick isnt he Point proven though, we have had this discussion for the last 3 years and in that time house prices have almost doubled (at least where I am anyway)

https://www.scoobynet.com/non-scooby...sh#post2694482

Roger Bootle was left looking like a pillock then wasnt he....

davegtt

PSL, you still on that record. Half of your post count must have been copied and pasted that particular post.

tbourner

Anybody of a mathematical nature, would you mind taking a look at this plot and deducing what the sequence is, and therefore working out what will happen next?






House prices aren't going to crash you say?

davegtt

Who said that?

Dream Weaver

I don't like the current government, but i'd like to think we know more now than we did in the 80's.

As said earlier on, it all depends on circumstances. We don't have any debt except the mortgage, and even if house prices went down by 40% we'd still be in equity on our house, and as we plan on staying here until at least 2015 any subsequent rise (after a crash) would see us alright. We may not have a house worth 500k at that point due to the crash, but we would still be in full equity and would realise maybe 300k. We plan on being mortgage free in 9 years so the house would be ours, regardless of any crash.

The only blight would be how much the rates went up by. Anything over 10% and we'd have to keep the mortgage longer than planned.

Mr Bat

There's only one good investment...an Impreza

borat52

Your clearly an example of somebody who has borrowed sensibly, anyone in this position has little to worry about I would say. The problem is people who have bought in the past 3 - 4 years and have borrowed to the limit of their ability to repay at low rates. If we see rates go up above 6-7% then these people simply cannot afford to keep their mortgage, so they sell. One person selling has no effect but lets say 20% of all people with mortgages are on the limit of what they can repay, all selling together will induce a crash and as a result put some of them into negative equity. Of course likelyhood is that a property crash will be followed by a recession putting people out of work and further reducing demand for housing.

davyboy

Lots of ifs and buts..

A couple who bought a house 3-4 years ago could have had 3 or 4 pay rises or changed jobs to cover the expected 6-7% rate you talk of.

Unfortunately you and I do not know the answer.

lozgti

I can't imagine many people have received the equivalent of 50% pay rises over the last 5 years.

Don't see how wages can ever catch up

Dream Weaver

Depends on the job though, some careers can increase 100% salary over 4 years, its up to the individual.

106rallye

100% of not very much still = not very much though!!

edited to say: If you are not earning enough to buy a house now then 100% on top of it in 4 years isn't going to help if prices keep rising

tbourner

Unfortunately we bought a house in June 2006 for 122k, the mortgage is 146k to cover previous loans and finances, plus we have CC debts and bits on top of that! We're pretty much maxxed on our budget as well so it's not looking good.
Only plus point is we have a fixed rate for 5 years, so as long as it's cleared a bit by then we should be able to pull through it.

davegtt

If you can afford the payments for the next 5 years and interest rates aint silly when your deal ends you will be fine.

Negative Equity you hear them all shouting etc... Who cares if you plan on living there for a long time...

davegtt

p.s. Well done for having the ***** to say about your financies as some here will try to degrade you for it. Good luck

rossyboy

iTrader: (8)

The have's always speak louder than the have not's on here. Gives a very skewed impression of how well off the country actually is.....

tbourner

As long as it's only talk and there's no chance of anyone copying my ID or anything I can't see an issue. I know I'm not rich I don't claim to be a whiz and know all the answers either, just trying to get along - if my info gets just a couple of helpful responses then why not!

I've been offered jobs at 35% higher pay (but worse job, shift etc.) so I can get more money if needed, plus I'm pretty much promised a promotion this year so I think in 4 and a half years time I should be alright regardless of the interest, and as mentioned I do intend to live here for some time - no kids planned or anything.

So I'm still on course to pay off my negative equity and buy a Scooby some time next year!

Leslie

PSL,

Can you explain to us all why your hero's are now party to this interest rise? It must be their actions which have caused it, but why?

Les

marky1

Can I have my prize please?