credit crunch

[Lurksalot]

Tough break Norman But

What about the 'Brits'  who chase the money working abroad in some far flung places most of their lives, who suddenly find they have a health problem and come home ??

After all the NHS is a dream compared to a lot of countries .

[higgsti]

I can't understand that statement. If that is the case what about the 4 million people who don't work, they don't pay any contributions.

The price of everything, the value of nothing

i once had a guy working for me in the early 90s with a family of 4 one of his children was disabled he gave up work because he was better off on the dole .he wanted to work but would of been worse off .he needed to earn over £350 a week back then just to break even.

there are professional dolies who get more for having a dog ,alcohol/drug addiction.these people should be encouraged to work rather than letting this huge influx of so called cheap foreign labour who apparently get child bennifit for there children back home(off our government) as soon as they start paying ni.i once worked for a jamaican lady who before moving here was told the british streets were paved with gold.this so called cheap labour is stripping this country of its wealth i know of houses 2 bed terrace houses were there are 14 blokes sleeping there .manchester police are on alert about hungarian gypsies who are coming over here in there vans and nicking any metals they can to weigh in .one street i went down in manchester 20 drain covers were missing these must weigh 1 ton which is a scrap value of 1k .

in my business i have noticed a slow down over the last 3 years since the first interest rate rise back in march 2005.

[samcooke]

QUOTE

You can still buy/sell/move, as long as you don't want to upgrade. Of course

Not at the mo, lending criteria has tightened. If you haven't got 10% equity after costs it's hard to get  decent rate and decent multiples.

For example; if you bought 3 years ago with a 90% mortgage at 4.5 times your salary and want to move, you'll probably find that after costs you no longer have 10% and that lenders will now only lend 3.5 times, so you can't move unless you go cheaper. This means it's only those that *need* to move that do so.

Where the real problem comes is the poor folk* who are coming off a 3 year fixed rate at 4.5%, being shoved up to 7.5% and can't remortgage because no one will now lend what they need. Their mortgage payements go up to a level they can't afford and they can't sell for what they owe so they get repo'd and the mortgage company loses tens of thousands.

Daft really, mortgage companies all of a sudden decide to get all risk averse and actually end up costing themselves millions more than they would lose if they continued to lend.

It's self perpetuates too of course, more repos = more lending caution = more repos etc, which makes me wonder where it'll end...

* - if we're being king, if we're not it's 'the silly folk who stretched themselves'

[Blatman]

I was kind of assuming that the "upgrade" would be taken to include equity/deposit considerations and that actually sourcing a mortgage wasn't the issue. Of course, if actually getting theh loan is the issue, then all bets are off...

[Norman Verona]

Blatman, That's the root of the problem. The banks have lost confidence in each other because they don'tknow who's holding million (billions) of worthless US sub-prime mortgage bonds. They are not lending/borrowing to each other, other than at very high rates.

Therefore they haven't got funds to lend and have withdrawn all the cheap mortgages (well, cheap to start with) and have limited funds to lend. Reminds the older one of the mortgage famine days when you were put in a queue. This has the obvious effect of stopping the housing market, as, if you cannot get a mortgage (or at least a "cheap" mortgage) you cannot buy a house.

This situation shouldn't last long as, once all the banks have published their annual accounts the holders of the losses will be identyfied and everthing will drift back to normal.

That is, of course, the cheap mortgages. They are thing of the past - until all this is forgotten and the banks feel greedy again. About 3 years  

[Blatman]

That's kinda my point though. If you've owned a house that has a 90% or less mortgage on it, and you've had it for the last 3 years or more, the current situation shouldn't really affect you very much. In fact if you have enough equity in your property to make up a big enough deposit it may even work to your advantage and you can still upgrade. You won't get a "cheap" mortgage, but iti won't be long before the deals start trickling back down. Banks and BS's will still lend to people with big enough deposits, so the current situation really only affects anyone with too small a deposit. It was ever thus, until banks started being daft and lending to people with no deposit, or too small a deposit. AFAICS we're simply regressing back to a more sensible state of lending.

The problem is that this realignment of the mortgage market has come at the same time as *big* increases in one of the fundamentals of all our lives, which is oil...

[Norman Verona]

But, how do you sell this house when buyesr can't get a mortgage, or won't pay the rates.

It's not only oil but crops, and therefore food, that are going up steeply. One reason being a shortage of food crop as farmers grow crops for fuel.

[windy]

The price of scrap has always been a great guide to the state of the global economy - the higher the scrap price then the more demand there is for steel so the more demand there is for construction.  Warren Buffett uses it as an indicator.

And scrap prices are at an all time high at the moment.  A very high all time high with no sign of it coming off.  Scrap company I work for is making record profits.  

Number of times I have seen in the paper or heard on the radio 'FTSE crashes 200 points'.  Following day it often rises by 200 points again but that never makes the headlines.  Good news isn't perceived to sell papers any more.

China can't get enough steel so that's why they are paying so much for it.

The only people that are getting rich in the UK are the scrap metal dealers &  the pikeys nicking road furniture  

[Norman Verona]

QUOTE

China can't get enough steel so that's why they are paying so much for it.

... and we shut down steel manufacturing in the Uk. Aren't we clever.

[Guest]

I live in Brighton Marina, 'London By The Sea' and the house prices normally seem to reflect.

This is how I felt it so far...  I was trying to sell my flat for the last year, and 2 different offers fell through costing and wasting money on solicitors.  I was going for the top end of the market having installed heated floors, jacuzzi, etc.

I've given up trying to sell it, I now decided to rent it out because the rental market is booming, i'm making a healthy £150 per month profit over my mortgage, so that's OK.

Meanwhile, i was going to upgrade and buy somewhere bigger, but the prices are just ridiculous, larger places around here are worth 40% more than they were 4 years ago (that's an isolated example, not sure if that reflects anywhere else).

As a result, i decided to rent with a mate.  I now live in a 4 bedroom house and the joint rental we're paying works out as exactly HALF of what my mortgage on the same house would be.  Surely this proves prices are silly?  This house should be 40% less than it is.

Perhaps some elements of the slowdown will be positive, for any people looking to move up on property value, it closes the gap between lower value properties and higher value ones.  Certainly around here, 2 bedroom flats are always desirable and required.

Whether it affects our businesses or not is the real factor i reckon... as for me, if people keep buying books, I'm happy, we help book publishers save money by improving their business process.  I just hope nobody else's business goes downhill too badly.  I know estate agencies are suffering around here, but i don't see any signs of anything else slowing.  Perhaps this is just a bit of a bubble, or perhaps my head is in the clouds and i'm spending too many days in london!

[JeffC]

I hope prices keep dropping so I can move without it costing me a fortune, The Farm im wanting to buy (but cant bring myself too   ) is over double the price of my current house so  another 20percent drop would help me.  

just wish Id moved 4 years ago would have cost me so much less to upgrade     in saying this I could be saying the same in 4 years time    

[samcooke]

QUOTE

Surely this proves prices are silly?  This house should be 40% less than it is.

6 months ago there would have only been a 25% difference which is OK - if they can afford it people are happy to pay that premium for security of tenure, the extra 15% is the loading that mortgage lenders are putting on their rates and is what has stuffed it.

QUOTE

The Farm im wanting to buy

If it's an arable farm the value of the land will have doubled in the last 2 years due to increased cereal demand and poor harvests elsewhere in the world - that's what's skewing it. I wouldn't buy something with lots of acres now unless you're going to farm it and see the return.

[JeffC]

If it's an arable farm the value of the land will have doubled in the last 2 years due to increased cereal demand and poor harvests elsewhere in the world - that's what's skewing it. I wouldn't buy something with lots of acres now unless you're going to farm it and see the return.

no its only 7 acre small holding  and land isnt that good, Ive no interest in the land just the buildings and parking, prob is horsey people seem happy to pay through the nose for this, its been up for sale for 7-8 months and price hasnt dropped  despite everything else in our area seeing reductions  

As I havnt moved before I also didnt realise that you had to pay duty ? on the selling price and buying price     so what I budgeted it  was going to cost me to move all of a sudden was a chunk more after solicitor and estate agent fees