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Getup makes a good point re the difference between the base rate/savings rates & actual mortgage rates. I would also add that I can't see the BoE coming to the rescue with swingeing rate cuts. Inflationary pressures are not insignificant, and these are "cost push" pressures, not "wage pull".
Will be very tough to justify rate cuts just to help the property market. However, if the consumer goes missing, then things will be different, but of course that would be a lot worse for the property market. |
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Grey Shark you are seriously living on another planet!! I am telling you that unless INterest rates rise house prices will not crash. Lenders although tightening their belts are still happy to lend money to people with good credit ratings and deposits. Mortgages , believe it or not are still affordable. If you have 30 years to repay a loan it shouldnt cost much more than 1100 pe rmonth for a 200000 mortgage. Pleeeeeeeeeeaaaaaaaaaaaaaase you guys have a look around!!.
As for the odd fellow who suggested that because lenders want a 20000 depoosit from some individuals rather than 10000. An believes that will lead to property prices crashing by 50%, you too sir are deluded. If Interest rates fall by another 1/2% people will be filling their boots with Fixed rate mortgages under 5%. That is cheap, and affordable. That is what it is all about. |
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To Grey Shark
It appears that earlier in this thread we agreed. I need to clarify my stance because I feel that your tone suggest I am "talking up the market" . This isnt the case. All I am saying is that house prices will not crash. I agree that there is no chance of a rise in the next couple of years. It is all about supply and demand. If there are few houses on themarket and lots of buyer generally the price goes up. At the moment there are increasing numbers of properties on the market and fewer buyers. There are as you say fewer buyers able to get loans which reduces that number further. Therefore there will naturally be people willing to accept lower offers on their homes. You are right that I have a vested interest in the property market as I am a mortgage adviser. I am telling people to make offers well below the asking price and to walk away if their offer is rejected. I tell them that sooner or later someone will accept a low offer.If everyone does this there will be a reduction in prices.I say 10% probably in next couple of years. The good news is that once they secure a property at a "good price". They can then get a good rate of Interest on their mortgae. These rates are going to get better as the year goes on, as BOE cuts rates. Remember it was only very recently that H S B C had a 5 year fixed rate under 5%. |
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Shelts
I'm busy at the mo , i'll answer your posts later , in the meantime you just keep your head well and truly buried in the sand ;) One quick point though , you write .......... If everyone does this there will be a reduction in prices . I say 10% probably in the next couple of years . Errrr we've already had SOLD prices drop 10% in the last COUPLE OF MONTHS . GETUP A good passionate post above , agree with all of it .Other good posts on here as well , thanx to all. |
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No, No, No. Not evryone is accepting a cheeky offer!! It is happening but not everyone desperate enough to accept the offers. That is why so many houses are still on the market. People that do not have to sell will stay put. Maybe put on a conservatory or build an extension.
Maybe government will relax the stamp duty thresholds to give market a kick start! (maybe not!).. That is another problem the market could do without. 3% over 250k and 4%over 500k. |
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Those 2 posts you put up earlier this morning , pretty obvious you read through the whole of the thread this morning , picking and choosing things to answer back to and ignoring those you can't answer back , even using expressions that i had earlier used , like asking me am i "living on another planet" i'd asked you that back on 25th Feb , your also now incorporating the word deluded as well into your posts , you even told poster Fermont who you described as a "odd fellow" that he was deluded for believing prices would crash by 50% when in fact he was just putting a theory up . Also due to the overwhelming evidence that a crash/correction is going to happen you have for the first time this morning decided to incorporate a 10% fall into your postings , and apparantly suggesting to your clients to put in offers of 10% below asking prices , first time you've mentionend that as well.
Lowering interest rates will have little impact , it didn't work in America , it won't work here , in many other countries prices are collapsing , the UK is the last one left and will suffer the most , 10% drop already , plenty more to come . On the subject of rates you did write {21Feb} "why did the BOE raise rates to a high of 5.25%in the first place" i did correct you on this , they raised to 5.75% , you ignored my correction , being your a mortgage advisor , you should of known this , no doubt your say it was a typing error though ;) Your example of people having a 1,100 mortgage for 30 years on 200k is almost sickening , ignore the manipulated so called average wage , most people TAKE HOME less than 20k a year , historically house prices are currently 30-40% over valued against real wages . How can normal families survive with huge mortgages ?.... answer is.......... they become debt slaves in a debt based economy , paying there debts/mortgages so that the banks make bigger profits so politicians can boast this is economic growth . |
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Indeed Grey Shark it was a typing error.I was Getting excited about responding to ridiculous claims about the demise of modern society!! I am of course familiar with the mortgage and financial markets , and I am surprised that you say the cutting of Interest rates in USA is not working. They have only recently been slashed and will continue to come down. Of course it takes a while for the positive affects to take place. Just like it took a while for the negative affects to take place when rates were rising.
We will see how this pans out. It is of course a lively debate with many opinions. I guess the only way to reach a conclusion will be to see exactly where we are in 6 months time 1 year time and so on.Will the sentiment still be as negative as it appears on this forum?? i just do not know... |
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shelts
Turkeys aren't going to vote for Christmas and that is why much of what you say will be taken with a pinch of salt. There is nothing set in stone but there are two reasons why it could get very bad indeed: The underlying fundamentals are not good and property is significantly overvalued on historical trends. Throw in the affordability issues which are beginning to surface (not in relation to interest rates but food, fuel, utilities etc). Secondly, we are to a large extent creatures who flock together in decision making terms. That uis why bubbles are created in the first place. It has happened with all manner of things and property is the latest example. When and if the flight begins then our "flocking" instinct may see the down swing exaggerated. As I say there is nothing certain but nothing, including eye watering falls, is off the table. |
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Turkeys aren't going to vote for Christmas
What a great phrase... :) Anyhow, just thought I would chip in with my experience as a First Time Buyer. We've only recently started looking for properties in (or around) London and with a combined income of about 55k pa you would expect us to be in a fairly strong position. After looking around for a while the short version is basically: 1. Whilst we can afford 220k with 95% LTV I can only find properties in this price bracket which are highly exposed to a weakening market - modern developments and flats above commercial properties for example. 2. The mortgage cost for this would be 15k pa (easily my partners net salary). After 3 years fixed rate I would have paid off 13k of the mortgage. If prices are level after 3 years I would now be remortgaging with a 90% LTV. If they have dropped at all then, coupled with lenders probably tightening lending terms, I will be hard pressed to find a good deal. I could easily end up stuck on the SVR. :( 3. If we had a significanly lower income we would not be able to buy anywhere near London and even if we could stretch to get onto the ladder what a hellish prospect that would be. Your exposure to the market would be truely terrifying! I don't think I'm an atypical FTB - the spreads have 12% drops on the UK market in the next 2 - 3 years and whilst I can save for a good deposit to mitigate my risk I'm sure there will be plenty of others doing the same. I expect demand to drop especially in the south-east; whilst rent is expensive it is as nothing to the cost of buying. We currently pay 850pcm to live in zone 4 (Richmond) compared to 400 more pcm to live in Claygate, Surrey (which would increase travel cost by 500 each pa). Any advice? Have I got it completely wrong with the above? |
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BMJ
Try not to buy now , at least wait till the end of the year , furthermore do not buy NEW BUILD flats or apartments 1,000's have seen there poorly built glued together shoe boxes lose up to half there value , they are rubbish , to many have been built , investors bought them , now there trying to sell them at a loss , they were a con/scam . Your partners salary not even being enough to cover the mortgage is the sort of example i was trying to explain to the "debt pedlar" shelts yesterday , what if you decide to have kids , how would you cope without her salary ? Shelts post yesterday at 9:28 shows how out of touch with reality he is , as he thinks it's ok for normal people to be paying 1,100 a month for a mortgage for the next 30 years . Millions of people are stuck like you , some even already own there own property , which has doubled in the last 10 years , but thats no good to them cos if they want to move up the "ladder" the next rung is even further away . One last tip do not take a INTEREST ONLY mortgage , if you do it means you really can't afford the property and all your doing is becoming a tenant to the bank and are signing your life away to be a MORTGAGE SLAVE for the rest of your life , the only way out of these mortgages for the majority will be a lottery win , bankcruptcy or death ]:0 . Do the sums , think where will things be in 2/3 years , at the end of the day it's your call. |
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BMJ
I wouldn't want anyone to experience what happened to me in the previous crash! Grey is spot on, stay clear of this market until it's clear that the tide has well and truly turned. I moved up to a lovely new house to LIVE IN as a home with my wife and baby son shortly before the Government, in their wisdom, gave notice to abolish double tax relief on mortgages, thereby causing an artificial surge and then the infamous crash. Interest rates went mental, consistently well over 12%. I had stretched myself to the limit and for the next 8 YEARS I worked my nuts off just to cover the mortgage. The interest paid cost me over 100k and the house, when I finally sold it, lost 40k. The biggest loss though, because of the unending stress, was of a personal nature. Quality of life must always come first. Take great heed and good luck mate. |
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Its a shame. I hope there is not another crash. But if there is then this country was sold the idea of endless rising house prices, debt funded spending and the bustless boom for political reasons. and brown must answer for it . He claimed he was being prudent when the was being the opposite. I actually hope all this wrong and there is a soft landing. If not though we where led here by people who are paid enough to know better. or rather knew better but led us here for political gain.
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Nobody put a gun to your head. Every investment has risk attached.
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America in reccession. Jobs lost here; forced selling. You need some very good reasons to buy now. Love the house, love the area know you are staying there for years, job secure, margin between rent and mortguage favourable. You feeling lucky? On the other hand nobody but nobody is saying buy or you will lose out on a price surge. Everyone could be wrong but these things are linked to sentiment which tends to be a self fullfilling prophecy.
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Oh dear!! The first line of your contribution suggests to me that you have little comprehension of the English written word, and hence no understanding of the reason I replied to BMJ. The second, that Grey is perhaps fighting a loosing battle here trying to explain the basic point that the house = investment idea is the very philosophy that has led to the situation we now all find ourselves in never mind.
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Cheers for the advice. I think I'm going to keep a quiet eye on the market and simply wait it out for what I feel is a good opportunity. I'm in no hurry.
Went to see a few more properties over the weekend - one agent turned up late to our appointment with no information and a rather flippant attitude. Was great to see the worry on his face when I told him we'd just viewed a better property for 30K less than the dump he was showing us round. Looks like agents may actually have to start working for a living and actually sell the house rather than just opening the door for you and telling you they don't know the answers to any of your questions. |
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seve 09 Mar 07:37
Oh dear!! The first line of your contribution suggests to me that you have little comprehension of the English written word, and hence no understanding of the reason I replied to BMJ. The second, that Grey is perhaps fighting a loosing battle here trying to explain the basic point that the house = investment idea is the very philosophy that has led to the situation we now all find ourselves in never mind. When you criticize other people's English, be VERY careful to get yours right! |
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'Comprehension', I said pal... not typing.
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But your mistake wasn't a typo. You - like too many others who post on the Betfair forum - seem to think that 'lose' is spelt with two 'o's.
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. . . you looser! ;-)
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You**e... whoops, another typo ;-)
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lol
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Bovis talks housing market down. Whys that? To put pressure on for interest rate cut ? Just being honest coz they cant sell houses? So much for demand being a kind of perpetual upward motion machine.The word desperate springs to mind. When will we see signs of massive loss of confidence?
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Radio 4 report; all papers talking down the economy, america in reccession, royal institute of chartered surveyors saying house prices falling. How can there be a spring bounce? When will this filter through to the point where buyers insist on significantly lower prices causing a feedback loop into a collapse. If this negativity stops people spending money and if the american reccession is as bad as some are saying we are going to get a rise in unemployment then a collapse.
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I understand that some people may buy in times of falling prices if the rent/mortguage margin is favourable and if major improvements are planned. But isn't sheer egotistical human nature going to want to avoid having to admit that in a few months they could have got there house for a cheaper price; yet they went ahead and paid a higher price anyway?
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All doom and gloom on here as usual. Not sure why I even bother logging on. There is a correlation between Interest rates and house prices. All the time rates are being driven down there will not be a crash. I am concerned about the threat of higher Interest rates , but I do feel that the costs of raw materials etc is no longer driven by low interest rates. Inflation therefore is inevitable wether interest rates are high or low.
Lateral thinking required to keep the economy on an even keel. Any suggestions? |
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Oh look interst rates are falling , lets buy a house now even though prices are falling. I just don't get it.
I will be surprised If what you say comes about but its intersting to see how it pans out. Happy to learn something if my understanding of the news is wrong.Lets wait and see but i have a feeling we are not going to have to wait long. I just cannot see a suuden bounce back in the us economy. I am however guessing at sentiment in uk. Opinion on here is overwhelmingly expecting some sort of fall. You are doing good job batting for the other side shelts. You are keeping my interest. Glad I don't have buy a house or sell a house though. |
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just met an estate agent for a viewing. he told me that now the media furore of jan/feb had died down the market was ready to go again.
had to admire the cheek of his self-interest whichever way it goes...one thing is sure...the media circus is still in full swing. |
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just met an estate agent for a viewing. he told me that now the media furore of jan/feb had died down the market was ready to go again.
What an idiot. Global central banks have just pumped a shed load of money into the system to 'ease liquidity' problems, the Fed are about to cut by .75%, housing data released last night was shocking and this guy thinks the media furore is over. |
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Yeah I don't understand how the money coming into the system averts reccession; obvoiusly the bankers do. Do they think peple will borrow and spend more now despite mounting debts? Whatever. What I do understand is the fact that they are doing this means they are scared. That will boost confidence- not.
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What the market needs is a kick up the backside in the form of a major institution going under.
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Won't the central banks and especially the tax payer just bail out any major institutin that is threatened?
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In his defence...he is selling houses in a bit of a "micro-climate" south of cambridge that has yet to feel the shockwaves that are travelling even now up the M11 from London....but to claim that the media furore had died down was an insult to my intelligence.
"Oh, has it? Great! I'll take it!!" |
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Sorry about talking to myself. But no we are not going to have to wait long because everything including the kitchen sink has now been thrown at lending system. Some of for the second time having not worked before. Plus more interst rate cuts. It may work. Wall street loves it. I am sure these people know what they are doing!!???! Having already seen this seen this coming a mile off. The economy is fundamentally sound is it Gordon? and we are seperate from america are we gordon? and it is all your brilliant doing is it Gordon?
If howevere it doen't work when everthing including desperation has been tried then its tighten the belts stop spending to reduce debt and to cope with rising prices including imports. This fall in spending then causes risng unemployment and house prices fall fast. |
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It's cyclical. We're coming out of a period of extremely low volatility with very low interest rates which has fuelled the debt market. It's a shakeout. Granted a bad one but much needed.
To see how much of a 'crisis' we are in check out the FTSE since 2002. It ain't that bad. Yet. |
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Did not Gordon tell us he had independantly ended the boom bust cycle by being prudent. And that he has made us independant from america. Darling is now saying everything is all right we are not in reccession. Nobody is saying we are in reccession- America is. Darling is now cracking jokes about the sub prime market.Such knowlegde such control such confidence.
So Cyle it is then. If so doesn't the wheel have to actually turn down before it goes up again. |
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Gooseman, we are still below the 1999 figure
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And. Have you seen the bull run since 2001?
It traded over 6000 consistently from 99-01 and we're back up near the 6000 level again in what could be considered very turbulent times. |
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Some would consider that the market is cheap .. I am optimistic and amongst the top 100 companies there are some real bargains to be had.. Some are yielding 10% given current share prices. Would these companies pay that sort of dividend if they did not have the cash?? If you believe some people on this forum you would think not..
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Of course they would. To tempt investors......are you really a motgage adviser?
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