FlightMan

BBC NEWS | Business | UK house prices 'start to cool'

BBC NEWS | Business | Drop in mortgage approval numbers

And Radio 5 were reporting this morning that home repossesions last year went to 17000, up 75% on the year before. Thats the highest figure since 2000.
This doesnt include data from August 2006, after which we've had 3 rises in interest rates.

davegtt

17k homes a year being repossessed doesnt come close to starting a crash Im afraid, I doubt the interest rate rises so far have effected people on the scale of causing 75% of them repossessions either.

KiwiGTI

The % of homes in London being bought as buy-to-lets is something silly like 80%.

When this stops there will be a correction.

davegtt

In London!!!

Jerome

Unfortunately, there is a long way to go before we match the house price crash in the early 90's. There were 247,000 repossessions between 1990 and 1993.

lozgti

That just relates to people who had problems in 2005.Pre rate rises.Be nice to see how many have been threatened in 2006 and will get the boot in 2007

Was at court today.There was a girl standing outside with a bright yellow sandwich board inviting people to ring some company on a 24 hr number if they needed help stopping repossessions.Sort of house ambulance chasing I suppose

Bankruptcy list was full too

Ah,joy.Here it comes

stilover

What goes up, must come down.

Unless you've just took out a 100% mortgage on your brand new £650K house. In that case, I'm sure you'll be fine ....... you hope

davegtt

People lose their house for numerous reasons, not because of a 0.75% increase in interest rates

lozgti

True.And all the elements are in place.

Funnily enough,the banks have cottoned on too.Telling people 's debt advisory services exactly what they can do with their IVA's.

Things are getting too tight for many people .Serves them right

stilover

As Tesco say though "Every little helps"

I do think people have got carried away with "my house cost more than yours" syndrome. House prices have just got silly. Unsustainably silly.

Those that have taken out a 10 year fixed mortgage are going to be Ok with interest rate rises. Although Utility bills ever rising and stealth taxes being introduced constantly by Labour, some people who feel save now might find it harder later on. Wait for road pricing to come into effect. See people struggle then.

The people most at risk will be the risk takers. By that I mean those that have taken out a huge mortgage just to get a house more expensive than their friends, work colleagues etc, and have taken out a variable mortgage because it worked out cheaper at the time.

"Interest rates will never rise" ringing in their ears as they sign their mortgage agreement.

davegtt

I meant I bet a good portion of the 17k who lost their houses probably did it through gambling addiction etc.

FWIW I felt the pinch this month with a £300 gas bill landing on my doorstep after a mad christmas period and January partying, plus splitting with the other half means I only have one income now and Ive had to up my mortgage to buy her out Means I'll be having a quiet month. But if things ever got that tight I think the 2 bedrooms could be rented out

fast bloke

Yep - Petes crash is here at last - according to CML prices dropped by 0.0000019% last month on a year on year basis. They also said that everyone who didn't take a 10 year fixed rate will be bankrupt by the end of the year. (Actually the forecast rates to go up 0.25 and then drop 0.5 in 12 months, but there are no headlines in that, so we can ignore the uninteresting bits)

paul-s

As quoted on the relevant bbc page, the impact of interest rate rises will dampen the increase in house prices for this year. Things would have to go very **** up for a big crash...

FlightMan

BBC NEWS | Business | 'Strong chance' of UK rates rise

That will make 4 since August 06.

Petem95

Sadly that seems to be a British thing. Another British thing is everyone wanting to get-rich-quick, and the recent get-rich-quick scheme has been buy-to-let which has been talked up by TV programmes, mortgage lenders, and estate agents. And yes its gone beyond sense now. People dont care how overpriced the property is if its going up 10% every year, but once the gains stop or go into reverse we'll see people rush for the exit.

I'll have no sympathy for all those greedy BTL'ers having their properties reposessed, but the banks should also get some blame for their totally irresponsible lending.

Funny how last year all the talk was "this is a new low-interest rate era etc" "rates will never go over 5%" - how quickly things change!!! Looks like we'll be 5.5% this week and a good chance of another 1% on that before the year is out.

davegtt, how about you bookmark this thread then we'll come back to it at the end of the year and see how rosy the housing market looks then? Anyone who thought this madness was sustainable was living on cloud-cucko Im afraid. Just look at whats happening to US house prices... we'll follow suit.

davegtt

Try making this URL a favorite/bookmark then Your the one who is desperately trying to prove me wrong, even though Ive made it clear its only what I think Im allowed to be wrong.

But I dont think I will be at the end of the year anyway

GOLDMAN 555

I'm not so sure there will be a cataclysmic crash.

People have been predicting a crash for seven years and it doesn't seem to have materialised. It doesn't seem that anyone really knows why this is.

The only thing that is interesting me is that if interest rates go to 10%(this could easily happen) there will be a lot of people out there who are totally screwed.

My theory is that house prices are being kept artificially high by the government. Everyone seems to have been brainwashed that there is not enough land around, this is complete rubbish there is literally huge amounts of agricultural land available. Farmers can't afford to grow crops on it so why not build on it.

Look at Google Earth and see how much green space there is. When you talk to most people they make out the UK is like Monaco or Hong Kong where there is absolutely no land whatsoever this is a fallacy designed to keep the house prices un-naturally high.

The banks are the real people running the show in the UK(65% of the UK economy) and if house prices fall they will be in serious trouble. Hence the conspiracy carries on...........

davegtt

Im sorry but if rates hit 10% there will be a crash IMO. Also cant see it hitting 10% easily

GOLDMAN 555

Why won't the interest rate go to 10% easily? It's been there plenty of times before just look at all the cheap debt there is around at the moment....... example Glazers buying Manchester United this is a public example of over leverage this has been going on big-time in the business world over the past few years. When it comes home to roost interest rates will have to rise.

What about if the US invades Iran they keep sending more more troops out there.
If the Iranians block off the Gulf you won't be able to get oil out sending the price through the roof with inflation following.

Interest rates of 20% might be far-fetched even though we've been there before but 10% is definitely a possibility in the next two to three years when you consider people have mortgages over 25 years or more I would say it is almost a certainty.

davegtt

never said it wouldnt hit 10% did I? Maybe you should try reading my posts, I even put the bloody thing in bold for you

Henrik

iTrader: (5)

Actually, the market does *not* expect interest rates to drop in 12 months.

Here's a chart for short interest rate futures: futuresource.com | Futures & Commodities Quotes

The way to read it is: 100 - price = expected interest rate at the contract time.

E.g. for December 2007. we have 100 - 94.140, which implies an interest rate of 5.86% in December. March 2008 looks a little bit "better" at 94.170 (5.83%). Even with a 0.25% margin for error, the market doesn't actually think that rates will be any lower than 5.5% in a years time.

wrxcraig

in 4yrs of owning my house my morgage has risen by near £200

davegtt

But I bet you had a low fixed rate mortgage for 2 years which was what stepped it up for you when that ran out. Have you remortgaged at all?

GOLDMAN 555

55% of buy to let landlords plan to buy more properties - Bradford & Bingley

A wide range of people are investing in buy-to-let. A survey of 3,617 UK landlords carried out by GFK NOP shows that confidence in the market is higher now than it was this time last year. The survey on behalf of Bradford & Bingley, the UK's leading lender of buy-to-let mortgages, found that a staggering 95% of landlords plan to either increase or maintain the number of buy-to-let properties they own.
This is 9% more than the number who gave the same answer at the end of 2005 when the figure was 86%. Over half (55%) plan to buy another property. Only 3% plan to decrease their investment in bricks and mortar.
Gus Park, Head of Buy-to-Let Mortgages for Bradford & Bingley said;

GOLDMAN 555

Brown's 'creative accounting' hides fact that Government is dangerously in the red

Gordon Brown has been accused of hiding half a billion pounds worth of public debts by Britiain's foremost economic think tank.
The Institute for Fiscal Studies revealed that creative accounting by the Treasury has concealed the fact that the Government is dangerously in the red.
They said the true scale of public debt is now £1,100 billion, equal to 87 per cent of national wealth - more than twice the level that the Treasury itself regards as "sustainable".
The IFS said that £500 million had been concealed "off balance sheet" in Government liabilities for public sector pensions, dozens of "buy now pay later" private finance initiative schemes to build new hospitals, as well as the debts of Network Rail, which are underwritten by the taxpayer.
Opposition spokesmen Sunday night accused Mr Brown of deliberately engineering the PFI deals to keep headline debts down.
Under these arrangements, a private company builds a school, hospital or other public project in return for regular payments over a period of up to 30 years. The Treasury can then score this as day-to-day spending, instead of debt.
Christine Frayne of the IFS said that the Treasury's calculations fail to represent the government's true fiscal position. "It would be nice to see these liabilities taken into account in some way," she said.
Shadow Chancellor George Osborne said: "Now the independent IFS has confirmed that Gordon Brown has run up debts more than double the level he admits. The Chancellor has been rumbled for keeping the scale of his borrowing off the books. No wonder people are asking where all the money has gone."
LibDem Treasury spokesman Vincent Cable added: "What's happened is that the government has rushed into PFI deals in order to hide debt."
The most expensive liability is the bill for civil servants' pensions, which are funded from current tax revenues. They alone would push public sector debt over 75 per cent of GDP if they were included on the Government's balance sheet, when Mr Brown has said debt should not rise about 40 per cent of GDP.
Roger Bootle, economic advisor to Deloitte and Touche, said that the Treasury should be forced to come clean, as other public companies are, to declare the cost of their pension promises.
"Pension liabilities are just there. You can't get away from them," he said. "I don't see why they shouldn't be on the balance sheet."
The former national statistician Len Cook was heavily criticised by commentators and MPs for accepting Mr Brown's view that these liabilities should not be added to the total national debt.
City figures are now hopeful that the decision to give more independence to the Office of National Statistics will lead to a re-assessment.
A Treasury spokesman denied the charge of creative accounting and said that the Government's figures are in line with international rules.
He said: "Public sector net debt is measured using data compiled by the independent Office for National Statistics, using the internationally accepted methodology. Decisions taken about how to prepare public sector accounts are scrutinised by the National Audit Office and Audit Commission."
The discovery is the second piece of embarrassing news for Mr Brown within a week.
The IFS released a study last week in which warned that Mr Brown will soon have to raise taxes by arounf £10 billion a year to plug a black hole in the nation's finances. Families were warned they face paying £325 a year more each in tax in the first years of a Gordon Brown premiership. The average annual household tax bill is already £1,300 higher than when Labour came to power.

AudiLover

**** labour they cocked up the country. If labour wins again that will prove that the country is full of *****, and scum who sit around all day with their hands out for benefits. People dont trust blair, and we already dont trust Gordon Brown before he even gets into office.

f1_fan

iTrader: (9)

Oh you've come across Petem95 then

The biggest laugh is that when it happens he will actually be telling us all 'told you so '

paul-s

Its funny how when you change from looking for a property to buying one you suddenly change from hoping prices will fall to being chuffed that they remain high

Ritch96

Lots of interesting "housey" stuff in this.....

Credit Action: Debt statistics

Apologies to those who have seen before.

j4ckos mate

as long as mine doesnt go below 50 grand, im laffin all the way to the bank
(current value 160000), but i wonder how many people have bought scoobys and put it on the mortgage