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Housing market
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nevermodern


Posts: 653
Joined: Feb 2007
Post: #1
14-11-2007 11:08 PM

[Split from 'SE23 Topics: New Apartments on Dartmouth Road' -admin]

Ian Wrote:
Oh god, more cheaply built, over priced flats.
Don't buy now, wait for the crash and get them at a 30-45% lower price !!

is this the crash that was supposed to have happened four years ago, then three years ago, then two years ago, then last year, then this year, that if I'd waited for and not bought, as advised, I'd still be renting and not be able to afford a matchbox in addiscombe?

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Ian


Posts: 75
Joined: Oct 2007
Post: #2
15-11-2007 11:28 AM

I see the government are starting to cook the books to stop it from happening.


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vipes


Posts: 145
Joined: Oct 2006
Post: #3
15-11-2007 11:51 AM

Nevermodern, you're tilting at windmills.

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nevermodern


Posts: 653
Joined: Feb 2007
Post: #4
15-11-2007 12:06 PM

As I said, Vipes. It's been coming for at least four years.

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vipes


Posts: 145
Joined: Oct 2006
Post: #5
15-11-2007 12:21 PM

Well Nevernmodern, while pragmatism without idealism is pointless, idealism without pragmatism is hopeless.

It seems you assume a debt-free existence. If not, and for most of the rest of us, you'll find traditional ways of delaying your money worries such as new credit cards or remortgaging are being closed off. People are increasingly stretched and lenders are making it harder to agree voluntary debt solutions by insisting on unachievable repayment levels, resulting in more and more house repossessions.

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nevermodern


Posts: 653
Joined: Feb 2007
Post: #6
15-11-2007 12:30 PM

Just making the point, vipes, that commentators have been using various markers for the best part of half a decade now to predict an imminent house-price crash. It may or may not come, but if I'd listened to that advice at any stage in the last five years, instead of owning a two-bedroomed flat, I would now be in the position where almost everything would be out of my reach.

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ab3


Posts: 2
Joined: May 2006
Post: #7
15-11-2007 01:18 PM

My view (or rather a view that I read somewhere and thing is probably right) is that if a price crash did occur, London is unlikely to be affected (as much or at all) compared to the rest of the UK. This is simply due to the massive number of rich people that want to move to London.

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hilltopgeneral


Posts: 156
Joined: Mar 2004
Post: #8
15-11-2007 01:51 PM

But the rich people don't want to live in studios in Catford... I agree with you to an extent but I'm not sure how well this will support the whole market.

In the last crash it was properties like the studio in Catford that were hardest hit.

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shzl400


Posts: 729
Joined: Oct 2007
Post: #9
15-11-2007 01:52 PM

ab3 Wrote:
My view (or rather a view that I read somewhere and thing is probably right) is that if a price crash did occur, London is unlikely to be affected (as much or at all) compared to the rest of the UK. This is simply due to the massive number of rich people that want to move to London.


As well as London being insulated from the worst of any crash, both because of high demand and the funny money people earn in town, if, as I firmly believe, FH is on the up, then there will be even less impact.

Besides, as long as you can afford your mortgage and are not planning to make a quick buck buying and selling or letting the properties, but are planning to make a home there long term, historical evidence shows that the long term trend is always up, despite short term dips or corrections. A while ago, I had a man from Robert Stanford round to value my house. He brought with him a copy of the property details from their archives, from the mid-70's when it was sold for ?16k. Without giving away any sensitive information, I think you can guess that it is worth many times that now.....

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hilltopgeneral


Posts: 156
Joined: Mar 2004
Post: #10
15-11-2007 02:07 PM

Again, I think you may be wrong. Last time, it was the areas that had recently started to pick up but were not yet fully established that were worst affected, because people became more cautious, so less optimistic over an area's prospects, and because falling prices brought "better" areas back into reach.

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PVP


Posts: 271
Joined: Mar 2005
Post: #11
15-11-2007 02:13 PM

I work in the wonderful industry of financial services and shzl400 hit the nail on the head; the problem is people buying things to make money in the short term, not to live in for an extended number of years. Couples make no allowance for wanting to start a family, no thought is given to not receiving the current wage / bonus, ignorance about interest rates ever going up if professed. Because IF THE PRICE GOES UP 20% IN THE NEXT YEAR WE'LL MAKE ?X,OOO!!!!

These things are cyclical, it has been many years since a proper slump and when it comes the people last in will feel the heat the worst. And as each year goes by, the chance of a downturn gets larger, so I do understand the grumps on here. Things are crazy, though I do think FH is relatively well placed. It offers better value than most areas of London, and London as a whole always attracts new people wanting to 'get on the ladder'.

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Ian


Posts: 75
Joined: Oct 2007
Post: #12
15-11-2007 06:50 PM

A crash In layman's terms (As I see it?)

The sub-prime crisis in the US goes belly up big time
The banks lose billion$
Thousands of Job losses/cuts on Wall St
Knock on effect in the UK
Thousands of city spivs out of work
Home repossessions because mortgages can't be paid
Credit card bills can't be paid
Shares tumble, investors lose everything
Trendy bars/restaurants/coffee shops/gastro pubs lose business and close
More job losses
House price crash, no one buying
BTL landlords can't afford higher interest rates
More repossesions as flats/house's now belong to the bank
House price crash deepens
Banks can't sell because no one has any money
House price crash deepens even more
The building industry goes stagnant
More job losses
Mortgage bookers/estate agents/surveyors etc go out of business
More job losses
More trendy bars/restaurants/coffee shops/gastro pubs lose business and close
Suppliers to the trendy bars/restaurants/coffee shops/gastro pubs lose business and close
Even more job losses
Interest rates go higher, even more repossesions
Debt deepens and many business's close
Even more job losses and so on and so on and that's a recession.

It's a knock on effect like dominos and the
first domino is the USA, and it really isn't looking good over there at the moment.


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nevermodern


Posts: 653
Joined: Feb 2007
Post: #13
15-11-2007 07:15 PM

Thankfully, the vast majority of our banks haven't left themselves anywhere near as exposed to bad subprime debts as US banks have - Northern Rock being the exception. Also, thankfully, the world economy is far less dependent on the US as it used to be.

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Ian


Posts: 75
Joined: Oct 2007
Post: #14
15-11-2007 07:38 PM

nevermodern Wrote:
Thankfully, the vast majority of our banks haven't left themselves anywhere near as exposed to bad subprime debts as US banks have - Northern Rock being the exception. Also, thankfully, the world economy is far less dependent on the US as it used to be.


So what your saying is our banks haven't bought into the US subprime?

So Britain's third-largest bank Barclays hasn't ?2.6bn of exposure to the US mortgage market and hasn't got ?7.3bn of unsold leveraged loans then?
And it hasn't taken a ?1.3bn hit in the past four months from the credit crisis that is wreaking havoc in world financial markets?

Plus Britain's BIGGEST bank, HSBC haven't wrote off $3.4bn (?1.6bn) on its US subprime mortgage business and $925m more in its investment then?

Phew, that's alright then !


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shzl400


Posts: 729
Joined: Oct 2007
Post: #15
15-11-2007 07:39 PM

What Ian is describing is a recession - remember them, we had them in the 60's and 70's, when we had a cyclical economy and then along came the 80's with all the madness that entailed, markets changed entirely, economic theories came and went. But whether you're a classical economist, monetarist or Keynesian, the truth is that we've been living in a Golden Age of unusual stability and prosperity for the last 20-30 years and in the meantime the structure of industry in this country has changed dramatically from heavy to hi-tech and service. Supply and demand, tax and spend, some people will win and some will lose and that's how life it, things change and the economy moves on.

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Ghis


Posts: 321
Joined: Jan 2007
Post: #16
15-11-2007 07:57 PM

nevermodern Wrote:
Thankfully, the vast majority of our banks haven't left themselves anywhere near as exposed to bad subprime debts as US banks have - Northern Rock being the exception. Also, thankfully, the world economy is far less dependent on the US as it used to be.


Well you will see more and more sub prime losses coming out of the woodwork soon. Today for example:
http://news.bbc.co.uk/1/hi/business/7095809.stm

I work in the financial industry too (Hedge Fund). It is true that contagion is less now. Emerging markets are a good example. However I do believe that the US is now the biggest contagion risk (which is not priced in the US stocks' valuations) and the UK is probably a lot more at risk than other countries.

This year I have decided to fix the mortgage at a rate I am confortable with for the next 10 years. That way I know what we will be paying each month for the next 10 years. If rates go up we are safe, if they go down, well never mind we know we can afford the payments. Now we do not have to worry about what the future holds. It is now all budgeted for, with monthly overpayments to hopefully leave us mortgage free in 10 years time in our early forties. When we bought our house we were lucky to find a decent 3 bedroom in HOP for a price we could afford and we avoided stretching ourselves. We bought it as a home we could grow into for decades, not an investment, not a pension fund. Funnily our neighbours have been in our block of houses for decades too and after 2 years of living there, we know their name, speak weekly if not almost daily (in the summer especially) and socialise together. This is our home and I hope we won't have to move away from HOP. You only get money for your house once you have to sell it. So all the people excited or worried about house prices should only worry about them if they need to sell. Regarding the first time buyers: I come from a country where most people rent anyway and it still baffles me to see how obsessed this country is with owning your own home. Of course it is nice but getting out of spiralling debt and not overstreching yourself (even if that means having to rent) is far healthier for the country's economy in general (cue: look what happens when people who cannot afford a house get on the sub prime bang wagon!)

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nevermodern


Posts: 653
Joined: Feb 2007
Post: #17
15-11-2007 08:07 PM

Ian, I didn't say the economy wouldn't be affected, or that there haven't been bad decisions with regards to subprime loans in this country, just that we haven't acted as irresponsibly, in general, as US financial institutions. It's not just my opinion, it's the opinion of the majority of articles I've read since the subprime crisis occurred.

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thenutfield


Posts: 235
Joined: Nov 2007
Post: #18
15-11-2007 11:06 PM

Ghis Wrote:
[quote=nevermodern]
T

This year I have decided to fix the mortgage at a rate I am confortable with for the next 10 years. That way I know what we will be paying each month for the next 10 years. If rates go up we are safe, if they go down, well never mind we know we can afford the payments. Now we do not have to worry about what the future holds.


where can you find a 10 year fixed rate mortgage, and what is the rate? seems a good idea to me.

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roz


Posts: 1,790
Joined: Mar 2005
Post: #19
15-11-2007 11:54 PM

Tilting at windmills????? Is this the same as relieving ones bladder in a northeasterly gale?

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Ghis


Posts: 321
Joined: Jan 2007
Post: #20
16-11-2007 08:32 AM

Norwich and Peterborough does 5.58% fixed for 10 years.

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