House Prices Now Guaranteed To Plummet

Discussion in 'Current Affairs, News and Analysis' started by pombsen-armchair-warrior, Mar 16, 2009.

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  1. It was announced today that rules are to be introduced later this week that cap mortgage lending at 3 x salary. As the average salary is £25000 this implies, with the requirement to provide a 5% deposit, that the average house price will reduce by a further 50%, from its current level of £160K to around £80K.

    It will be extremely interesting to see how this all pans out. Link below.
  2. But if based on three times joint income then then it would stay about the same.
  3. 25k average salary 8O im on frigging half an average salary.
  4. Those who were banking on house prices forever rising-and those who speculated on those lines-are in for a bath,them.
  5. The trouble is the Banks have brought this on themselves, they lent up 100% mortgage's as it was good business, now people will need to put up 10% deposit, as it used to be when my folks bought their house back in the 1970's!
  6. It could all get a bit messy, to put it mildly. Several things occur:

    Those who bought at more than 3x - or whose salaries have reduced following redundancy and so on - will be unable to remortgage. So they can't move. Besides, who on earth would buy now until they're sure the market has bottomed ? That isn't good for anyone who wants to buy a house as you need someone to be selling one first.

    Or, if their fixed rate comes to an end and their mortgage is going to go up and they can't remortgage then they may not be able to afford their mortgage. And when you sell it you won't get the price you paid back. While the banks can and will pursue you for the difference they don't necessarily get it as you can't pay them money you don't have - and funnily enough I understand personal bankruptcies are increasing in number.

    (This compares to the US where you can walk away owing nothing and anecdotally many are - I wonder how many we'd see over here if it was an option ?)
  7. Great that's me buggered!

    My nice little house on an interest only that was going to boost my pension when I eventually retired is a blasted millstone that will finish me off when I retire as it might bwe worth what I paid for it in 2o years.

    I just soooo hate that bastard brown!!!
  8. You're overlooking one thing - Supply and demand.

    If govermental figures are anything to go by, it is projected that by 2020 the country will need another 2 miilion homes to house us all. The annual build rate to meet that is some 180.000 per annum, but with the housing market the way it currently is and with many building projects having been put on hold, that annual build rate is now down to a mere 50.000/60.000 per year.

    So, if two years ago the government projected that 2 million new homes were needed to meet demand and that demand still remains, todays lack of building means that come 2020 not enough houses will be available, so demand will outstrip supply. Hey-Presto - another property boom...!
  9. msr

    msr LE

    That's two things....
  10. Actually it's 3 things as I forgot one. Foreign currency mortgages. If Jim Bob can't over borrow in Blighty, then he'll just go to a foriegn bank to increase his personal debt levels. Which isn't a new thing as many people have done it for years.

    Which I suppose this is where our Gordonskis Booking out & into the country and tracking emails, phone calls and text messages comes into play. Once that's in place you'll have to ask for permission to leave the UK and give a dertailed itinery of where you're going, that way he'll know that you've been to an overseas bank to sort out a cheeky little mortgage simply by reading your emails and by seeing what web pages you've been browsing.
  11. Great and to days good news is mmmm sod all.
  12. You're also overlooking the fact that with all this money being printed their might be some 70s style wage inflation in the near future. If it happens it will be bad for savers (and particularly pensioners on fixed incomes), good for young people with big debts and very wealthy people holding assets such as precious metals or property.

    So, irresponsible chavs and the extremely wealthy will benefit. Quiet, responsible people get shafted. That's New Labour to a T.

    Thankfully, I'm with the irresponsible chavs. Anybody for a can of cider?
  13. ill take two cans please.
  14. Don't forget that that'll be 50p per unit.. :(
  15. Yes, but you're currently paying peanuts to live in it, aren't you? And 20 years is a long time in financial terms, especially if inflation takes off. Every cloud....