General Discussion
NEGATIVE EQUITY
No need to explain on here what it is----is there?
However, there will be many people and some no doubt live in Dawlish that will feel its effect.
It was quite easy to predict that it was coming two or three years ago. What is not so easy to predict, (for me at least) is, how many will be caught up in it.
What I will predict is that house prices will continue to fall at an alarming rate and recovery (if any) will be a long way off. So the knock-on effects could be humungous.
Now I am not racist, niether am I against what other people do. What I am against are those that sleep walk into a situation and then try and put the blame on others when things go wrong.
For what it is worth, here is one way to whether the storm.
During the early seventies when I was gainfully employed as Chief Engineer for a string of very large hotels, I had a situation where I had to call in the Gas Board (as it was then) to investigate a smell of gas.
The Gas engineer told me this little story of what he had just witnessed before he came to me.
He had been into a three-storey house to investigate another gas leak, where he had occasion to enter every room. He never witnessed before in his life, just how many people lived in that house--he estimated there must have been between forty and sixty.
They were all of Eastern nationality.
So if any one wishes to know how to live cheaper than they are now, just ask a foreigner.
Another thing they used to do and some of you will remember TUFF Shoes with an enormous guarantee attached to then. Those shoes were worn 24/7, so the guarantees were soon removed.
And they can feed a house-hold for a week, on less per hour than the minimum wage. Bulk buying, bulk cooking and no cutlery to eat the meal from so no dishes to wash.
That is how to weather the storm.
Tighten your belts folks, its coming to get you.
More than 3,500 householders in Exeter struggled to pay their council tax last year, new figures show.
And authorities across Devon took out about 20,000 liability orders through the courts for the non-payment or underpayment of council tax demands.Tax payers' campaigners say the figures are evidence that a growing number of people are facing difficulty in finding the cash with utility and fuel bills soaring.
But you would never believe that things are getting tougher with some of the comments posted on these forums
Take it you aint got a mortgage then, considering the delight you seem to portray in this post. It could have been you, no need to rub it in to those poor folks it may affect now is there.
Viaduct needs to rub it in, people just do not listen or even understand that they are being ripped off. Just read the following which was not written by Viaduct, but shows the con merchants will stop at nothing and hope to suck in more of you uneducated people.
New rules for valuing properties
Man looking in estate agent's window
The Financial Services Authority is cracking down on mortgage fraud
Mortgage lenders are to change the way newly-built properties are valued to prevent possible mortgage fraud.
The Council of Mortgage Lenders (CML) says new rules will help stop mortgages being granted that were worth more than the value of the home.
Some developers could be tempted into offering incentives to buyers, such as cash-back offers, as the market slows.
But lenders were concerned that they were not always being informed about the discounts and deals on new flats.
Other incentives have included developers offering to pay buyers' deposits, pay legal fees, clear the stamp duty or pay for the cost of moving.
'Bad news'
The CML warned in February that the trend could mask the real value of new homes.
We are introducing these measures to help sustain confidence in the market for newly-built properties
Michael Coogan, CML
Buyers could find themselves with a mortgage worth more than a property's value, and so face immediate negative equity, the CML said.
Lenders would also find themselves at risk of fraud or losses. A disproportionate number of fraud cases have involved newly-built apartments in city centres
Lenders are supposed to be told about any deals by the professionals who do the conveyancing, typically solicitors. Yet, the deals could be hidden from these people too.
Rule changes
From 1 September, builders and developers of newly-built and converted properties will have to fill out a form which ensures all incentives are disclosed.
The CML and the Royal Institution of Chartered Surveyors (Rics) will make this a specific requirement in their books of rules.
"We are introducing these measures to help sustain confidence in the market for newly-built properties," said CML director general Michael Coogan.
Rics spokesman Barry Hall said: "All parts of the property industry are in agreement that standards must be maintained and that the consumer must be protected from any disingenuous practice."
The Home Builders Federation and Homes for Scotland supported the move, saying that it built upon the work they did to strengthen their codes of conduct earlier in the year.
"These initiatives will ensure that housing developers maintain the confidence of mortgage lenders, and help facilitate the process of buying a new home," a Home Builders Federation spokesman said.
The Financial Services Authority have been cracking down on mortgage fraud this year, and the Association of Chief Police Officers has said it is a significant element of the UK's annual fraud losses.
Viaduct = gloom and doom.
A year ago everyone wanted lower house prices.
You asked .. you got it, it's relative as you can buy at a lower price.
chicken shed/joey deacon/joe orton just speaks out of his rear end! How's the estate agent biz dave?
If you have negative equity just sit tight even if your home doesnt go up in value it will be paid for one day.
I lived through this situation in the 80's.
A home should be a home not a bank account
When I started this thread, little did I realize how many negative remarks would eminate from it.
There have been questions asked, suggestions made and rumours abound, on whether or not it will affect "me".
There was a suggestion that some pubs in Dawlish were about to lock up their doors.
The Barton brothers came into play with other postings. I myself suggested that estate agents are being rocked and who of the many in Dawlish would be the first to crack?
I have heard through the grape vine, that 12 of those flats built in the High St, were secretly sold to a housing association, and they have another 20 plus properties on the market, in total desperation to raise capital.
I wonder how other so called property developers are weathering the begining of the storm?
" have heard through the grape vine, that 12 of those flats built in the High St, were secretly sold to a housing association"
that's from your posting. That you felt compelled to write that struck me that you might have a problem about it. If so, is the problem that they were sold secretly (if indeed they were) or that they were sold to a Housing Association (if indeed they were). Or both or neither?
If you read the local papers (which quite obviously you do not), you will have noticed how district cllrs(not the crumby ones you have running the show at Dawlish(they have no power to grant planning permission))make a play on how they are forcing major developers, (and I understand, anything over two is major)to provide more AFFORDABLE HOMES. They talk about 30, 40 and even 50% of any new developments being AFFORDABLE HOMES.
So why did the development in the High St escape that rquirement and then when the houses built could not be sold on the open market, there was a private deal to take more than the % normally required?
Now I suppose some viewer will ask why I have put in capitals AFFORDABLE HOMES. Do not be sucked into the meaning of AFFORDABLE HOMES.
They are just another name for social housing run not any longer by the local authority, but by a housing association or the like. But it is the LA that subsidises it (your TAXES)
Now I have no problem with that. The problem I have is the way it is dressed up into making it seem someone is providing houses that anyone can afford. NOT TRUE!
"Affordable" housing can be a mixture of
a) rent only
and
b) co-ownership
And yes, these schemes are run by housing associations and the like. In case you missed it, I believe it was Thatcher wot done it for councils being able to build houses. Right to buy and all that.
Affordable housing, social housing, council housing.Call it what you will. Why shouldn't those unlucky enough not to have enough money to be able to buy a house not have a home?
Homeless, You have completely missed the point, either (a) deliberately or (b) trying to throw others off the scent.
I have no problem with social housing or any of the other labels you have kindly attached.
My point was, why should a developer get away with not providing any AFFORDABLE HOMES and then when things get tough in the private sector (and they haven't seen nothing yet) should those they cannot sell privately, be off loaded at the stroke of a pen.
Councils are not there to support the private sector, but unfortunately if you dig below the surface of any public scheme, you will see there are huge benefits to those that are awarded the scheme, but very little benefit to those that they purport it is for.
Those that are running your life do not live in a one up one down terraced house with no inside toilet. They live a life of pure bliss.
First casulty in EXETER.
Who will be the first in Dawlish?
ESTATE AGENT SHUTS OFFICE BUT VOWS TO KEEP SELLING
Be the first reader to comment on this story
11:40 - 14 July 2008
Falling house prices, fewer buyers and rising costs have taken their toll on a long-standing city estate agent who has closed his shop.
Probert's, one of Exeter's few independent estate agents, has gone into receivership.The firm was run by Gerald Probert, who has been in the estate agency business for 44 years.
Mr Probert said: "Sales were dropping off and the premises in Paris Street were just not sustainable.
"It was a large office and there were only three of us in the end. We could have operated in premises a quarter of the size. If we had done that for the past 12 months, then we would have made great savings.
"The trusted property supplement in the Express & Echo still brings in inquiries but having expensive central offices, at least for the moment, is no longer as important as it used to be."
Mr Probert still believes there is a future in the industry as he will now set up a less traditional business, using the internet more.
"I will be targeting some of the redundant staff to join me," he said. "I'm going to be creating a network of people who will be self-employed and selling to commission. It will still enable them to have a job. I'll be keeping on one member of staff covering administration and I've also got two people who are very interested in being negotiators.
"I and other agents will all be working from home. We can go to people's homes which I think will make it easier for them. We will not be restricted to office hours. People can get hold of us 24/7."
But Simon Cooper, chairman of the Exeter Estate Agents' Association, said: "Sellers want to use an agent with a shop or office. A minor proportion of houses are sold by internet-based businesses."
Estate agents were and are partly to blaim for the crisis that has not hit this country yet. The price of a house has far outstripped its material cost and greed then played another part.
Not glorifing! Except when it comes to estate agents. And I think they are the scum of the earth, but like all things some benefit from their activities.
I could probably amass more that have bad things to say about them than others could say of the good.
I do not tell people what to do, I tell them of the pitfalls.
How many Estate Agents will raise their hands and say, " I am sorry, I gave you a pack of lies?"
In my attempt to keep people focused on the real world, it has now been officially anounced that it is a buyers market(Housing as well as many other items).
You are being advised by those with a vested interest, to buy now.
Good advice! but buy only at a price that you think it is worth and not what others are telling you it is worth.
House prices are tumbling fast, don't be caught in the NEGATIVE EQUITY trap.
Remember this, "If you are paying, then you should be saying what you want to pay, and not what someone else are telling you what you should pay."
Those that do not heed or did not heed that simple piece of advice are now seeing thousands drifting away from what they were told was a bargain.
Your assets are no longer worth what you could have been conned into believing what someone else told you.
Tread carefully!!!!
Whoh! only 23,000 new mortgages applied for in June. You will get a house for the real price soon at that rate. £250,000 house now £175,000 and falling.
Potential house buyers, don't buy yet, let the prices drop even further. It is a buyers market so name your price if you want to have a go now.
I am keeping people focused on one of the major problems of the decade.
House prices are falling rapidly, only yesterday, the National House Building Federation, proclaimed that house prices could, (notice COULD) rise, by 25%. Well they would say that wouldn't they? They have a vested interest.
My informers have told me the complete opposite, they are in the business and have no vested interest.
23,000 new mortgages offered, (not all will be taken up) last month for the whole of the country, that should sound alarm bells ringing to all those that are paying a mortgage, but I bet it hasn't....yet! Some people would not even notice if a tardus landed on Dawlish beach.
I am not an advocate of gloom, I just tell people as it is.
However, Lloyds said it expected house prices to fall by up to 15% this year. Were prices to fall by 12.5%, it said by way of an example, this would wipe £100m off the value of its mortgage loans.
How will it affect U?
Is there anyone out there that thinks it will not touch them?
Fuel prices up.
Food prices up.
Defaulters up.
Employment in the reposession sector,up.
Unemployment up.
House prices down and begining to go into freefall.
Profits of most major companies, down.
Share prices down.
Job vacancies down.
Watch your councillors of any note panic.
Price increases do not only affect the man in the street, Local Authorities have huge costs for services. Fleets of vehicles, the running costs up 40%.
Offices to run, costs up 45%.
Ect, Ect. Your council tax will bound to be the next big mover UP,UP UP.
THIS IS NOT GLOOM, IT IS FACT AND A WARNING.
DON'T CRY OVER MY SHOULDER LATER?
No I am not!
I am trying to keep little minds focused on the problems ahead.
What is happening now, rings similarity's to the war years.
And what did Winston say in his great speech on 20 August 1940, nearly 68 years ago for those whose arithmetic is not up to scratch?
"Never was so much owed by so many to so few."
Credit cards have caused the problem. People with no money borrowing from those with no money. The amount owed on credit cards alone is staggering add to that the amount owed on mortgage lending and it is mind blowing.
Some of you will remember Dave Allen. He did a sketch on debt.
He said, "Britian has a balance of payment deficit (we owe millions) and he went on to tell the audience of how many others had a similar debt, and then he asked the question, who do we owe it too?"
Viaduct says ..'Credit cards have caused the problem'.
So choice should never have been given to so many.
Actually, its not all doom and gloom!
My Endowment mortgage finished in March and this paid off my mortgage and still gave me £2000 in hand.
I was able to do this because I never moved house in the 25 years and the mortgage was relatively small.
So many people keep upgrading their lifestyle etc.to get a bigger/more expensive property and eventually get caught out.Greed in many cases, to be one up on your friends or neighbours.
Live within your means while on this earth and you will survive.
Now HSBC profits fall by 28%
As more and more sensible people get their money out of those twisting banks, so they have less to invest and less people to steal money from.
I bet you Joey Deacon can see my eyes bulge and my viens in the neck doing peculiar things, can't you Joey?
Warning as mortgage arrears rise Mortgage firms should treat customers fairly as the number of homeowners facing arrears and repossessions rises, the UK's financial watchdog has said.
The Financial Services Authority's comments came as it reported a 40% rise in new cases of repossessions in the first three months of 2008 to 9,152.
The number of home loans in arrears rose by 15% in the same period.
The watchdog said a flexible approach was needed from lenders when recovering these arrears.
"More people are struggling to meet their mortgage payments and it is vital that firms treat them fairly," said Lesley Titcomb, of the FSA.
"This means paying attention to their individual circumstances and not repossessing their homes when there may be an alternative solution. Repossession has to be the last resort."
Mortgage squeeze New lending peaked in the third quarter of 2007, but the share of new lending being used for loans for house purchases has fallen since then, the data shows.
The proportion of mortgages where homeowners borrowed more than 90% of a home's value fell from a peak of 15% of new lending in 2007 to 10% in the first three months of 2008.
But the proportion of borrowers with a poor credit history has fallen.
"We believe these new figures paint a terrifying picture showing real people - hard-working families, young first-time buyers and even renters - all living in the shadow of repossession and ultimately homelessness," said Adam Sampson of charity Shelter.
The FSA should tackle "merciless mortgage lenders", he added, as there was concern that some lenders might try to pursue a repossession rather than try to work out a solution.
'Fair treatment'
It is the first time that the FSA has published figures in this way. It called on specialist lenders not to operate a "one size fits all" approach that was too focussed on recovering arrears without taking account of the borrower's circumstances.
It added that some were too quick to take court action and needed to improve training on dealing with mortgage arrears.
The watchdog also followed up on a review of 250 firms offering mortgage advice.
Better evidence of whether customers were able to afford repayments was needed, the FSA found.
Seven small mortgage advisers are also likely to face enforcement action after the review.
Repossessions However, it has predicted that, with people feeling the pinch, there will be 45,000 repossessions in 2008, up from 27,100 in the previous year.
The growing numbers are partly the result of rising house prices in recent years, which gave lenders an interest in encouraging people to sell.
With high mortgage repayments, and rising household food and fuel bills, the number of people missing payments on their home loans is rising.
The Ministry of Justice said in May that the number of people facing repossession orders - an early stage of the repossession process - rose by 17% in the first quarter of the year.
There were 27,530 orders in the quarter, up from 23,438 during the same period in 2007.
The government said it was doing more to help those in financial trouble, such as extending free debt advice services and free legal representation at county courts.
"The rate of repossessions is not on the same scale as in early 90s. But that doesn't mean we don't recognise the problems that some borrowers are facing because of global economic pressures," said a Department for Communities and Local Government spokesman.
There was also some better news for new borrowers as a number of the major lenders have also cut their interest rates for new fixed-rate mortgages in recent days.
Now that NE has begun to rear it's ugly head and so many people buring their head in the sand; shame! We see more and more reposessions and business failures.
What is the latest on the Barton Brother's, the Protheroe empire and the struggling estate agents?
If the estate agents did close.
I cant see anyone in their right mind setting up shop.
You would have empty shops which you would so revel in.
HOME LOANS GET CHEAPER AT LAST, "Daily Express"
Not alot placed on the fact that you need to cobble together a 25% deposit,
That is £40,000 on a £160,000 house.
How many have got that sort of money?
Whilst I do my best to keep people focused on the real problems that we all face, many do not appreciate the real problems.
Today many school leavers or potential school leavers, will be getting their exam results.
Many will be allocated a university placement, many will not. Of those that do, many will end up in debt before they venture out into the wider world.
Now if they are supposed to be the bright sparks of the future, how come they haven't the sense to steer clear of debt and if they cannot steer clear of it, what chance have lesser mortals got?
Would help if schools taught banking and all about debt and credit cards. Credit is fine if you know you can pay back. As most cannot count in their head what hope is there. My neighbour has a 11 year old, other day she could not do 8 times 2, but could 2 times 8 lol. It's not the kids fault the teachers probably cant count either, they all have adding machines how sad is that. Did you see the Ch4 prog special last week.. 16 years old in school learning to add.
Debt seems to be the norm for the youngsters of today, live today, tomorrow may never come attitude.
It is just like those that drink to drown their sorrows, only to find when they wake up, the sorrow is still there.
Once you build a debt, it can become a burden for evermore.
You should save up for what you want, not borrow for it, mortgages included. That way prices would be more realistic for everything.
It is oh so easy to push prices up on borrowed money.
Credit cards did it big time, now look at the mess many have got themselves in?
Repossesion orders up by 24%
The Ministry of Justice said 28,658 orders were made by the courts in England and Wales in the second quarter of 2008.
Thats a lot of repossesions and it will get heaps worse.
Forecasters, including the CBI, had been "over-optimistic" about the economic outlook, he added.
No they weren't, they were terrified of letting us know the true state.
For the past twelve months and more, I have been watching and listening to the untruth's told by many.
Estate Agents, The House Builders Federation, The Treasury and others that should not have been doing it; did.
Being sorry is not going to help many now, it is too late for that.
All we can do is watch the serious problems unfold.
In 2006, I got my electricity charges capped until 2010, how many others out there did the same?
It just goes to show how the problem was created and now those that bought to let - cannot, and those that cannot sell are trying to let.
From the Royal Institute of Chartered Surveyors: The number of properties up for rent has jumped as people who cannot sell their homes decide to let them instead.
So where is the crunch going and when will it end?
Council of Mortgage Lenders: House sales have dropped by 50% this year and will probably fall further. 21/08/08
Oh dear! won't be long before it reaches Dawlish.
The Halifax has said it is to close 53 of its estate agency branches in a move that will lead to the loss of 100 jobs.
The firm said the closures followed the "significant decline" in the number of house sales over the past year.
Following the changes, the Halifax said it would focus on its core markets in the Midlands and North where it would operate 151 branches.
Estate agents have been hit hard by the recent housing downturn, that has seen the number of transactions plunge.
The number of sales is down by a half compared with last year, and the lack of transactions has hit estate agents' earnings.
Banks and building societies have cut back mortgage lending dramatically because the credit crunch has dried up the supply of funds available to them.
The ones in Dawlish are in each others pockets, Thats for sure??????
When I was growing up in the 1950s many people of my parents' generation were opposed to Hire Purchase loans as they were frightened of incurring debt. Yhey would save up and only buy when they had the money.
However, house purchase has always been different. Only a tiny minority would ever be able to buy their homes without a mortgage.
The amount borrowed has always meant large repayments in relation to income and over a very long period. For these reasons, any changes to house prices and repayment terms will always be a huge concern to millions of people.
There are still far to many people with their head in the sand.
The economic downturn is not a dream, it is reality.
I have tried to warn people of the consequences of buying a house at todays asking prices, they are well overpriced and need to drop at least 50% to get to a realistic figure.
There are those that need to move and there are those that appear to think speculating is the in thing.
DON'T DO IT, WAIT, WAIT, WAIT.
Speculators will loose huge ammounts as will those that have to move.
Don't listen to estate agents, don't listen to finacial advisors, don't listen to house builders, the bubble has not yet burst, the knock on effect will hit us all. Some more than others.
So you saying a house at £150,000 should be marketed at £75,000? .. but how do you buy a house in a different area where prices are not dropping in price as they are in Devon and holding at around £200,000. Should wages be cut be half too?
Wages have little or nothing to do with the price of property.
Property prices reflect one's ability to pay what is asked and not what it is worth.
You could be on the lowest end of the wages ladder, yet auntie May may have left you a sum that would make it possible for you to by the earth.
Property was/is only affordable to those with the secured ability to pay. Many did not and do not have that secured ability to pay. They borrowed from others who borrowed from others who borrowed from others, and it is now blatantly obvious that no one had the money in the first place.
Building firms Persimon, Bovis, Redrow, Taylor Whimpey, ect., are loosing money fast. Not just because they can't sell what they have built (although that does play a part) but because the investments they made on securing land for further development, is no longer worth what they paid for it.
If all property was sold by auction and not by what some single person thinks it is worth, then it is possible that you may get a more balanced perspective on the price of any property.
When at an auction, (unless you are determined to pay at any price) everything finds its level. Having said that, I know of people who have bought at an auction, (thinking they secured a bargian,) only to find when they try to sell it on, it is worthless.
Why do people think property, (houses are any different?)
Buildings are being knocked down as businesses seek to avoid paying tax on empty properties, a government regeneration chief has warned.
John Nicholls, chief executive of the Urban Regeneration Companies, said the scrapping of rate relief on empty industrial property was leading to "pre-emptive demolitions". John Moylan reports.
The UK housing market is unlikely to recover before 2011, according to a leading estate agent, as it emerged today that 1.3 million homeowners face negative equity if prices continue to fall.
Savills, which specialises in selling upmarket properties in the South East and London, made its gloomy prediction in its latest report on the residential housing market.
The company blamed restrictive mortgage conditions for the delay to any market recovery, citing the Financial Services Authority's report in July that availability of mortgages will persist through to the end of 2010.
Savills said today that its forecast that house prices will fall by 25 per cent over this year and next was looking like an increasingly safe bet.
The extent of the problems in the housing market was underlined further by forecasts that up to 1.3 million British homeowners could find themselves in negative equity, when mortgage debt is higher than the house's value, if prices fall and the economy moves into recession.
If true, the prediction, made by leading banking analysts, would mean that more than 10 per cent of the nation's homeowners would be sitting on properties worth less than they paid for them.
"Our estimate is for 25 per cent to 35 per cent house price falls from their height...resulting in up to 1.3 million households, or 18 per cent of mortgages by value, in negative equity under our recession scenario," said Bruno Paulson, senior analyst at Sanford Bernstein, the research group.
Mr Paulson said that house price falls would be "far worse" than in the last economic downturn in the 1990s and could have a huge negative knock-on effect for the UK's mortgage lenders.
"This should in turn drive 1 per cent peak losses on mortgage books in a serious recession, and an overall mortgage loss bill [for banks] of up to £38 billion," he said.
This week, the Organisation for Economic Co-operation and Development (OECD), an influential think-tank, said that the UK would fall into recession in the second half of the year, marking out Britain as the only country of the G7 economies that will experience a full-blown slowdown in 2008.
Sanford Bernstein gave its forecast after fresh evidence emerged earlier this week that house prices were sliding at double-digit levels year-on-year.
Halifax, the country’s biggest mortgage lender, said this week that property prices fell at an annualised 12.7 per cent last month, just days after its rival Nationwide Building Society revealed an annual decline in property prices of 10.5 per cent.
Yesterday, the Bank of England's Monetary Policy Committee failed to provide relief to homeowners looking to cut their mortgage costs by keeping the interest rate at 5 per cent.
Moody's Investors Service, the credit rating agency, also reported that mortgage arrears and repossessions had jumped sharply in the second quarter, even among the highest-rated borrowers.
Savills underlined the gloomy picture with new evidence that London's well-paid financial services community has taken a battering during the credit crunch.
The estate agent said demand for £1 million to £2 million homes had fallen by 54 per cent, compared with last year.
Prime central London property values fell by 5.5 per cent in the second quarter of 2008, according to Savills, while the prime and country house market fell by 4 per cent during the same period.
The estate agency group also pointed out that renting is currently cheaper than owning a house, deterring many potential buyers from entering the market.
By the time the property market reached its peak last year, the costs of ownership were 44 per cent higher than the costs of renting, according to Savills.
The company predicts the disparity will diminish during 2009. "By the end of 2009, the cost of buying should be in line with the cost of renting, so making ownership attractive again," Savills said.
Faced with continued evidence that the economy is heading for a technical recession, analysts have begun to adjust their forecasts for the plight of the nation's homeowners.
Last month, Standard & Poor's, another credit rating agency, said that one in six homeowners in the UK will fall into negative equity by the end of next year if house prices fall by a further 17 per cent.
Morgan Stanley estimated in April that house price falls of 15 per cent over the subsequent 24 months would put 1.2 million people into the red with their property values.
But if price falls of 25 per cent are sustained, that would put 2 million into negative equity, analysts at the investment bank said.
My advice: Anyone trying to sell their house, should look at cutting their loses.
Don't expect to get what you want, take what you can get.
If you don't, you could end up loosing the lot.
Back in focus again.
I am here to HELP!
http://news.bbc.co.uk/1/hi/business/7637491.stm
Read what I said in my last posting on this subject.
The drop is nowhere near enough.
If you are in trouble now, things could get much worse if you do not act quickly.
Only applies to those who have to sell of course, although those that have borrowed on the strength of their asset, could also feel the pinch from their bank when they start to call in loans that are a risk to them.
Today in the Telegraph:
House prices are dropping faster than any time since records began.
Share prices are dropping too.
To get a mortgage, you need a miracle.
Watering holes are feeling the pinch, partly because drink is so much cheaper from the off-licence.
To save money for the most important things, get rid of your mobile phone, get rid of your television, (not only tv licence saved, but the running (electricity)).
Instead of shopping every week, shop every fortnight. Most perishables will safely freeze, so no reson to run out of anything, (even milk and bread will freeze, (do not freeze in a glass bottle).
Those that are on a split tarriff, do as much as you can between 12 midnight and 0700 in the morning, you will save two thirds on your usage.
There is more!
The problem that banks and mortgage lenders face is the asset on which they lend the money.
Everyone knows what they would like to get for an asset – be it a house or some other valued (to you) possession that you are putting up as surety.
Trouble is (and this applies to housing especially) they were grossly overpriced. Hence the bank and the mortgage lenders now know that the valued assets they thought they once had, are now not worth what they thought.
That is the nub of the sub-prime crisis.
The old saying, “One man’s gain is another man’s lose,” has never been more true.
Until people begin to accept what someone else is prepared to pay for the asset, instead of trying to get what they think it is worth, then the asset is worthless.
When I started this thread, little did I realise the huge number of stupid people around.
More and more people loosing their jobs, more and more loosing out on what they thought would be an adequat pension, share prices have tumbled and some still believe that they will recover to the heady hieghts that once gave them some sort of credibility - and yet there are some people out there that are still prepared to pay way too much for a property in the misguided belief that they will make untold profits. Those days are gone - yet estate agents are still trying to talk the market up. House prices will need to drop much more in order for those that are trying to buy will be able to buy.
First there is a hefy deposit to be found, then there is the legal fees and all that that entails and all the bits and bobs that go with it. The days of 100 - 125% mortgages will never return - unless of course there is another stinking wonder plan.
So, thank you Mr Brown. But if you still have an income now is the vwery best time to trade up houses, when the differential is massively reduced. The lucky ones should go for it (always supposing they can sell their own house first.
Bardwell
And if they cannot sell their own house/s, what then?
Greed got us into this mess and it is going to take a mighty miracle to get us out.
The writing was on the wall, I knew and I cannot imagine that they did not know what was coming either. They probably did know, but because we live in the mushroom world, (keep them in the dark syndrom) then that is why the mess is going to be and probably will be a lot worse than it might have been.
Unless there is something on a par with the Industrial Revolution, then generations to come will have to suffer the mess that we are now in.
Will the younger generation look back and say," my parents got me into this mess?". I doubt they will, but who else did?
So has it caught up with you yet?
THE number of people losing their homes in rural areas is soaring by twice the rate of other parts of the country.
Repossessions have rocketed in the Westcountry in recent months, as more people slip behind on their mortgage payments.
With the number of people on the dole in the region at its highest since the 1990s and still rising, the situation is expected to deteriorate further.
A study by the Commission for Rural Communities (CRC) now shows the increase in the number of families being evicted from their homes is worse in the countryside.
Ministry of Justice figures show rural repossessions have risen at a much steeper rate than in England as a whole during the past two years.
Between the first quarter of 2007 and the third quarter of 2008, repossessions increased by 39 per cent in the countryside, compared with 21 per cent in urban areas.
Some parts of Devon and Cornwall are among those worst affected. For example, the most up-to-date figures for the number of mortgage repossession claims showed that the rural North Devon area has seen a 27 per cent rise.
Roger Turner, head of rural economies at the CRC, said: "Since we last focused on housing in December, we have seen a continued fall in rural house prices, sales and demand for land with housing potential.
"Despite this, rural affordability remains a greater problem than urban and this is exacerbated by credit limitations and increased deposits."
The Conservatives said the figures were further proof of people who live in the countryside bearing the brunt of the recession.
Shadow housing minister Grant Shapps said: "The Government has completely failed to take any action to help people in rural communities. It is deeply worrying that rural repossessions are rising at double the urban rate. This shows they have been hardest hit by Labour's fiddled funding.
"Rural communities need a practical plan to help them hold on to their homes and ensure there is affordable housing."
Halifax this week reported that house prices are still down 17.5 per cent year-on-year.
"Across these areas, the average household would need more than seven times its income to purchase an average-priced house – compared with 6.3 times in an urban area," the CRC said in its latest recession report to Environment Secretary Hilary Benn.
The CRC, which advises the Government, is now calling on ministers to take "urgent steps" to build the capacity of councils and rural housing associations.
The knock on effect hasn't really started to kick in yet - but it will.
You are continually being misled by the Government and other interested parties who are trying desperately to talk the situation up. Only today Alistaire Darling - now there's a name, has admitted he got it wrong and did not realise that it would get sooooo bad and there is no light yet at the end of the tunnel.
What you bringing me into it for? Biz is terrible, I'll be HOMELESS soon if biz doesn't pick up. But it won't be a problem cause I'll get my drugs un booze from the locals that seem to be a problem in Dawlish. Roy / Viaduct will you join me for a can of Special Brew?
I thought I would post this item early, it knocks flat those that are trying to talk the market up. There is a choice to be made and niether one will suit all - Either wages will have to at least double to be able to afford the asking prices or house prices will have do drop even further than they have so far. When I started this thread, there was a very real need for house prices to drop by at least 50%, we are still a long way off of that.
Negative equity stops home moves
Looking in an estate agent's window
First-time buyers have almost disappeared from the market
Falling house prices mean that two million households have either negative equity, or too little equity to finance a house move, lenders have said.
Negative equity is the situation where someone's house has become worth less than their mortgage.
Research by the Council of Mortgage Lenders (CML) said the problem would restrict the number of home sales.
But it said two thirds of the 900,000 homes in negative equity had only a modest shortfall of less than 10%.
That equated to an average of about £6,000 for first-time buyers in that situation, and £8,000 for the other home owners.
"Although negative equity has resurfaced as house prices have fallen, one big difference from the early 1990s downturn is that it is less concentrated among young, first-time buyers, and more evenly spread across wider age groups and those at different points on the housing ladder," said Bob Pannell, head of research at the CML.
"Negative equity will contribute to subdued property turnover, but otherwise should have few adverse effects for the majority of households affected," he added.
Small deposits
With lenders still restricting their lending because of a shortage of mortgage funds, few are currently prepared to accept a deposit of only10% from anyone buying a house.
Negative equity... only surfaces as a problem if households need to move, or are also experiencing repayment difficulties
CML
Recent figures from the financial information service Moneyfacts showed that there were currently only106 mortgage deals requiring a deposit of 10% or less, while more than two thirds of the 1,485 deals available asked customers to put up a deposit of at least 25%.
The impact is that even people who still have some limited equity in their homes, but less than 10%, are unlikely to be able to move.
The CML estimated that there are about 600,000 mortgage holders who have less than 5% equity in their homes, plus another 500,000 whose equity would amount to a deposit of more than 5% but still less than 10%.
Thus about two million homeowners in total could not raise a 10% deposit for a new mortgage simply by selling their current homes.
1990s comparison
The CML carried out its research by looking at data supplied by its members.
With house prices dropping by about 18% since the middle of 2007, the fall in prices has already outstripped the national price drop experienced during the early 1990s house price crash.
But the 900,000 estimated to be in negative equity now are fewer in number than the 1.5 million estimated to have been in this position more than a decade and a half ago.
Of the households currently in negative equity, about 270,000 have a shortfall of between 10% and 20%, and about 30,000 have a shortfall of 20% or more.
In those most extreme cases their negative equity amounts to an average £28,000 for first-time buyers and £37,000 for other home owners.
Despite this, the CML argues that it is myth that there is a strong link between negative equity and mortgage repayment problems.
"Payment problems are typically associated with unexpected spending commitments, reduced income and changes in household circumstances," the CML said.
"Negative equity, on the other hand, only surfaces as a problem if households need to move, or are also experiencing repayment difficulties," it added.
The fight is on!
Now that Estate Agents are suffering so badly, many are turning their attentions to the letting of properties as opposed to selling them - oh dear.
Estate agent complaints persist
The Ombudsman for Estate Agents has reported a "surprising" workload dealing with complaints despite the property market slump.
While activity dropped by as much as 60% in 2008, Christopher Hamer said sales disputes dropped by just 3%.
The Ombudsman, who aims to resolve disputes between agents and consumers, expects the majority of his work in 2009 to shift to the rental market.
One trade body is warning of an influx of unqualified agents to lettings.
The Association of Residential Letting Agents (Arla) said many estate agents were expanding their businesses to cover lettings in a bid to survive the housing market downturn.
Market change
The economic climate and squeeze on mortgage lending contributed to a sharp decline in house prices and demand for homes in 2008.
In order to make the transition from an estate agent to a lettings agent, they need to have studied more than 100 different pieces of legislation
Ian Potter, Arla
But there was little change in the number of cases being raised by angry buyers and sellers with the Ombudsman.
"I am surprised that my workload in sales disputes has not reduced more significantly," said Mr Hamer.
"Perhaps it shows that buyers and sellers have still higher expectations of agents' service while there are so few properties being sold."
He received 1,043 new cases in 2008, split between 743 for sales and 300 for lettings. This total was a rise of 20% on the previous year and 78% up on 2006. In 65% of cases the complaint was upheld, with the majority of compensation awards were between £100 and £499.
Letting fears
During the slump some agents have been moving towards the rental sector where various reports have suggested would-be sellers have been putting homes up to let instead.
In a survey of its members, Arla said 76% reported that estate agents in their local area had moved into lettings as a result of the downturn in the sales market in the last six months.
The trade body believes that a high proportion of these agents are not being regulated properly or meeting the required standards for lettings agents.
"This is a big concern for landlords and consumers," said operations manager Ian Potter.
"In order to make the transition from an estate agent to a lettings agent, they need to have studied more than 100 different pieces of legislation, and pass minimum competency tests to ensure their ability to advise clients to the required standards."
'Middle classes suffer'
The report comes on the same day that the National Association of Estate Agents claimed that the value of family three and four-bedroom houses has been the worst hit in the housing market slump.
The association said that top-end, executive properties had increased in value between January and February. The same was true of smaller, two-bedroom homes.
"This suggests that people who are buying are picking up smaller houses than they may have done previously, possibly because they can only get smaller mortgages. It may also reflect a trend of downsizing," said chief executive Peter Bolton King.
He claimed that sellers were consistently over-pricing properties.
Meanwhile, in another blow to would-be buyers, the UK's largest building society the Nationwide has announced it was increasing its mortgage rates for new borrowers by up to 0.3%.
The first time buyer market has virtually gone for the forseeable future, so those wishing to sell, will have to pitch their price to those that are in a position to barter a lower price.