Am I Right To Be Feeling This Way?
Family Life0 min ago
International Monetary Warning???
There are rising concerns that the blight affecting American property prices will travel across the Atlantic to Britain. Only last week, the International Monetary Fund warned that Britain was vulnerable to an American-style property slowdown, as it argued that homes in the UK were overpriced by 40 per cent.
This is from Countrywide America.
http://business.timesonline.co.uk/tol/business /industry_sectors/banking_and_finance/article2 726674.ece
and this is the sneeze???.....
http://news.bbc.co.uk/1/hi/business/7049930.st m
This is from Countrywide America.
http://business.timesonline.co.uk/tol/business /industry_sectors/banking_and_finance/article2 726674.ece
and this is the sneeze???.....
http://news.bbc.co.uk/1/hi/business/7049930.st m
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I dont think anyone can make such a sweeping statement about across the board devaluations of house prices and certainly not 40%. There have been problems selling high value houses for a while now but many statistics are saying that mortgages, house sales and values are holding well, with some agents still reporting single figure rises in prices too. In my area the sold signs are still appearing shortly after sale signs go up.
The problem with these crash stories is that owning your own place is something most aspire to. While people have jobs, can access and afford a mortgage you will have a fairly healthy housing market. Rate rises and mortgage restrictions will cause glitches but I believe things will fluctuate only slightly overall. Over the 30+ years I have owned property I have seen mortgage famine and interest rates rocketing well into double figures but still we bought and held on. Struggling to pay a mortgage is not new.
You have to look at the whole picture and draw your own conclusions. We have a healthy economy. The fact that our population is growing and there are not enough houses available (or being built) is the key to property holding its current values. Yes houses are expensive, prohibitively for many. But are they overvalued? Supply and demand has the ultimate effect, be it houses or Brussels sprouts.
Economists believe we will see 2 rate drops by next spring which brings us neatly to one of the busiest times in the property calendar. Lets hope those suffering after the many rate rises of late can hold on and we do not see the huge figures predicted for repossessions. And maybe a prayer that, despite what I've said about a fairly stable situation, a severe devaluation doesn't happen. So many will instantly be in negative equity, bringing personal misery and very bleak times indeed for the property market.
The problem with these crash stories is that owning your own place is something most aspire to. While people have jobs, can access and afford a mortgage you will have a fairly healthy housing market. Rate rises and mortgage restrictions will cause glitches but I believe things will fluctuate only slightly overall. Over the 30+ years I have owned property I have seen mortgage famine and interest rates rocketing well into double figures but still we bought and held on. Struggling to pay a mortgage is not new.
You have to look at the whole picture and draw your own conclusions. We have a healthy economy. The fact that our population is growing and there are not enough houses available (or being built) is the key to property holding its current values. Yes houses are expensive, prohibitively for many. But are they overvalued? Supply and demand has the ultimate effect, be it houses or Brussels sprouts.
Economists believe we will see 2 rate drops by next spring which brings us neatly to one of the busiest times in the property calendar. Lets hope those suffering after the many rate rises of late can hold on and we do not see the huge figures predicted for repossessions. And maybe a prayer that, despite what I've said about a fairly stable situation, a severe devaluation doesn't happen. So many will instantly be in negative equity, bringing personal misery and very bleak times indeed for the property market.
The IMF is just another name on the list of crash predictors. A few years ago when house prices shot up there was much talk that the crash was coming. Some homeowners thought it best to sell at the top, rent until after the crash, then buy low. It was a bad move as prices kept rising. All you can do is listen to the experts and decide what it all means to you.
I may end up eating my words in my 40% reduced house. Maybe some are relying on this crash to get on the ladder. Fine. For them. I have 2 sons renting well over the age I was when I first shackled myself with a mortgage. But a rush of buyers suddenly affording a place will create new price rises and off we go again.
As for Northern Rock. Greed. Running out of funds for lending would, in the past, result in a famine. My first mortgage was with the local council, who, along with many councils, lent mortgage funds for a while in the 70's. Abbey National, who we saved with for2 years, ran out of funds, declining a mortgage on a 10k house.
Now its different. Savers can't keep lenders going and they borrow to provide substantial mortgages. As this cheap money started to get expensive, and the US sub prime problem started, Northern Rock were in trouble. Statistically their lending over the last year was so high that some bankers (and the Bank of England) worried they were handling too much borrowing. No questions were raised and it ended in the run.
Lenders are now more cautious who they lend to, how much and if the borrower can afford it. No one wants to be the next Northern Rock.
That's a good thing. Can it be good to over borrow because lenders let you, then worry about how to meet the monthly payments? Misery made more miserable if you end up with huge payments on a property that just lost value.
I may end up eating my words in my 40% reduced house. Maybe some are relying on this crash to get on the ladder. Fine. For them. I have 2 sons renting well over the age I was when I first shackled myself with a mortgage. But a rush of buyers suddenly affording a place will create new price rises and off we go again.
As for Northern Rock. Greed. Running out of funds for lending would, in the past, result in a famine. My first mortgage was with the local council, who, along with many councils, lent mortgage funds for a while in the 70's. Abbey National, who we saved with for2 years, ran out of funds, declining a mortgage on a 10k house.
Now its different. Savers can't keep lenders going and they borrow to provide substantial mortgages. As this cheap money started to get expensive, and the US sub prime problem started, Northern Rock were in trouble. Statistically their lending over the last year was so high that some bankers (and the Bank of England) worried they were handling too much borrowing. No questions were raised and it ended in the run.
Lenders are now more cautious who they lend to, how much and if the borrower can afford it. No one wants to be the next Northern Rock.
That's a good thing. Can it be good to over borrow because lenders let you, then worry about how to meet the monthly payments? Misery made more miserable if you end up with huge payments on a property that just lost value.
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