House prices
- Thread starter L900CMC
- Start date
dac69er
Super Moderator
the economy always goes up and down. my parents got caught up in the mortgage problems of the 70s as well as a bloke at work. they got though it ok. things are a bit tighter, but then you should always try and give yourself a little leeway when taking out mortgages or loans etc.
Dane_Bristol
Member +
This has happened in the past and the market will get worse before it gets better its got to be said, house market economists saying that we should start seeing a slight upturn middle of 2009. The big problem is all the lenders keeping hold of their money. The bank of England has issued billions too Lenders but the lenders in this volatile market are not willing to lend the money at particularly good rates.
The most common problem currently is that first time buyer rates are really high at the moment coupled with the fact that property value is not what it used to be. We have to remember that a house is only worth as much as someone is willing to pay for it and as unfortunate as it is majority of people believe that their property will always mature in equity thus leaving them in + Equity.
First time buyers are coming on the market looking to buy property and the valuations are coming back so the vendors of these properties do not like the fact that their properties have fallen in value and so therefore pull from the market.
The market will pick up eventually as historically it always has. Its all about riding it out but unfortunately for people that may be forced to sell up the picture might not be so bright.
The most common problem currently is that first time buyer rates are really high at the moment coupled with the fact that property value is not what it used to be. We have to remember that a house is only worth as much as someone is willing to pay for it and as unfortunate as it is majority of people believe that their property will always mature in equity thus leaving them in + Equity.
First time buyers are coming on the market looking to buy property and the valuations are coming back so the vendors of these properties do not like the fact that their properties have fallen in value and so therefore pull from the market.
The market will pick up eventually as historically it always has. Its all about riding it out but unfortunately for people that may be forced to sell up the picture might not be so bright.
scottishcruiser
Member +
The thing is with your own house/mortgage its not only that your paying, you also have repair bills if anything goes wrong.. But mortgages inc council tax is in excess of £750/800 per month for your typical £100k house, which going by todays wages takes up about 65-70% of your wages unless you have a well paid job.
The time to buy a house was in the 60/70/80's when they were a few £k.. Even nowadays, if you have been a council tenant for x years, you can get a heavy discount on your house, IE:- 3 bedroom house wroth £90k for about £20k here..
The time to buy a house was in the 60/70/80's when they were a few £k.. Even nowadays, if you have been a council tenant for x years, you can get a heavy discount on your house, IE:- 3 bedroom house wroth £90k for about £20k here..
scottishcruiser
Member +
I also read a good quote a while back. Went something along the lines of:-
"We are the biggest lenders to banks."
Unfortunately for us we cant set our own interest rates, effectively the money we have in our accounts is what they use to lend out to others, although its always sat there. Yet thet give us 0.1% interest but charge us silly % for mortgages, loans, CC etc.. If everyone withdrew there money from tehre accounts, paid everythiong by post and got paid there wages in cash, I bet the banks wisen up.
"We are the biggest lenders to banks."
Unfortunately for us we cant set our own interest rates, effectively the money we have in our accounts is what they use to lend out to others, although its always sat there. Yet thet give us 0.1% interest but charge us silly % for mortgages, loans, CC etc.. If everyone withdrew there money from tehre accounts, paid everythiong by post and got paid there wages in cash, I bet the banks wisen up.
L900CMC
Member +
Now theres a plan,I think burglaries might go up slightly though!
Starlet_Sam
Moderator, Regional Area Reps Supervisor & Gay Car
It's business mate, it's not as if they don't tell you what interest rates you'll get. The banks are a way to keep your money safe as well as lending to them.
Dane_Bristol
Member +
I think there is a difference here mate of the 2 types.
Banks use our money that we deposit in our accounts to lend out money to other customers in the form of unsecured bank loans. They use our money in order to lend to other people at a higher rate of interest in doing so like you have said they give us a certain percentage back in the interest but more often than not its a very small amount.
The second type is where lenders such as Nationwide, Royal Bank Of Scotland, A&L, C&G etc etc lender from the Bank of England. The bank of england sets out what is known an the 'Bank of England Base Rate' as people are aware this forms the basis for which lenders lender money from the Bank of England in order to lend out Mortgage loans.
Now currently the bank of England Base rate is currently 5% so money is lent to these lenders in the form of a loan, sometimes the rate at which the Bank of England lends the money to these lenders also know as 'Libor' is lower than that of the 5%.
This is where most rates are formed when taking out mortgages as you will have Tracker rate, Discount rates, Libor Linked, Fixed SVR (Standard Variable Rates) these are all the different rates which really are formed from the bank of England base rate. Each product has different features which compliment them and have advantages as well as disadvantages.
The base rate forms the basis really for all the products that are offered by the lenders this in turn also effects the mortgage market as higher rates do not make it financially attractive to the first time buyer in for example the current market conditions.
I think majority of the panic in the current housing slump is down to people not accepting the fact that prices of houses can fall and so are therefore not selling as they still think they can achieve the same price as their original valuation. Once they find that the property has fallen in equity they simply dont want to sell and accept the fact.
People are renting out there properties to ride out the property slump.
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Starlet_Sam
Moderator, Regional Area Reps Supervisor & Gay Car
Banks also invest our money.
Starlet_Sam
Moderator, Regional Area Reps Supervisor & Gay Car
If we didn't have money we'd be trading rocks.
dac69er
Super Moderator
at least you can see rocks. money nowadays is all electronic
Starlet_Sam
Moderator, Regional Area Reps Supervisor & Gay Car
You can see the money if you get off your arse and go to the bank to get it. Problem is it'll be taken by some Pikey shit before you even walk out of the branch.
scottishcruiser
Member +
I hate carrying cash, cards or online suits me perfect... I try to bide my time before buying or even private renting then snap up a so called bargain when prices go down. It be handy winnign the lottery then sod all the money worries 
dac69er
Super Moderator
im coming up to the end of my 2 year fixed term on my current mortgage. was planning on moving out not long afterwards but i dont think thatll happen. luckily i got my place cheap so even though its not worth loads im not in negative equity yet.
just gotta ride it out i guess
www.glanza.co.uk
Super Mod (極度の調整器)
Personally, I think that where inflation is headed, interest rates will hold, or possibly go up a quarter point. Hopefully, when this slows at the end of the year/start of next, rates will come down again.
However, given the current 'credit crunch', lenders are being more cautious, and it will be a while beofre lenders reduce their rates to the Bank of England Rate. I'm swapping to a 2 year discounted mortgage on the gamble that the rates won't increase. At the end of the day, you've got to make up your own mind what's going to happen, as everyone has different opinions...
And remember, you're only affected by negative equity if you sell for below what you paid. The answer is therefore simple, don't sell unless you have to!!!
And yes, if I could get me way (bloody wife!), I'd be on the other side of the world now...
However, given the current 'credit crunch', lenders are being more cautious, and it will be a while beofre lenders reduce their rates to the Bank of England Rate. I'm swapping to a 2 year discounted mortgage on the gamble that the rates won't increase. At the end of the day, you've got to make up your own mind what's going to happen, as everyone has different opinions...
And remember, you're only affected by negative equity if you sell for below what you paid. The answer is therefore simple, don't sell unless you have to!!!
think i could be buyin a plane ticket outa here soon the way things are going...
And yes, if I could get me way (bloody wife!), I'd be on the other side of the world now...