My assumption is some areas will have house prices fall by a lot more than 3%
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Look at the subprime market before the last crash. Negative equity sees an awful lot of people defaulting because why wouldn't they if they owe more than their property is worth.
I doubt a 3% drop would cause many borrowers to drop into negative equity, considering many lenders will ask for at least 5% deposit and, typically, considerably more like 15% deposit.
Also, suffering negative equity shouldn't necessarily induce defaulting on your mortgage, which will depend on the original loan and interest rate. As long as your other financial circumstances remain the same, a drop in the value of the house shouldn't change affordability of the mortgage repayments, unless you want to sell and get another mortgage or, otherwise, remortgage.
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Bingo. This is a big area that will change if we leave without a deal.
Yeah, which is why I agreed with Garry: it is the jobs we have to worry about.
The subprime market was down to many factors, including HBOS only checking less than a quarter of its self-certification applications for affordability. Was more an issue of banks overexpanding and throwing money at anyone.
I guess the other factor is if houses really do bomb, when it comes to mortgage renewal time and your valuation is way less than your mortgage then you'll struggle to move beyond a tracker which can then push your monthly expenditure.
Bollocks! The Brexit campaign lied throughout the campaign. For example, they lied about the Irish border and claimed they would easily negotiate a deal with the EU. The whole campaign was a fraud and they completely mislead the public! Advantage my arse!!
I'm very worried about my job as I work in the manufacture of car parts industry.
My question was how it can be a referendum of all Brits if not all of them were allowed a vote. The answer is that it clearly wasn't a referendum of all Brits. It was undemocratic in the real sense of the word. People will be paying for this without having had the chance of representation.
Yep you are a WUM because there is no conceivable reason for this post rather than to piss people off. Congratulations you've done it.
Sorry for that and good luck, mate.
Maybe. It is possible interest rates could be forced up if the pound collapses further and inflation spikes. Perhaps not likely but not negligible. I don't think the next few years are going to be benign at all. Buckle up...
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The economy is m weak though and consumer debt levels are so high that above target inflation must surely be the lesser of two evils compared to raising rates.
You are saying that the people who voted to leave had no idea what they voted for, that is something we can definitely agree on.
Re joining the EC I wasn't talking about that, it was the European Communities which covered a lot more than some people think including freedom of movement etc. The EU is an amalgamation of those communities.
The rules are known, that's not my point, you said:
I know plenty of people who have no right to vote but whose lives will be affected by the UK's decision to leave. In your opinion should the EU citizens living in the UK have a right to have a say in their own future after all they can vote in local elections and for their MEP.
As for rules, apparently Leavers don't worry about breaking international treaties.
The result turned out as I thought, I struggled to believe or rather hoped that the country wasn't that ridiculous but I don't think a re-run would be much different.
The exact term is consolidation which is something done everywhere.
Yes, that's the term I was looking for.
This doesnt make any sense. If your fixed mortgage payment is 1k per month and your property devalues by 95% then your repayments are still 1k pm.
The real Problem will be those who used help to buy... The government is either gonna have to make a lot of people homeless or underwrite a hell of a lot of bank loans
Ok i dont know how help to buy works. Tell me how and explain what a 3pc drop difference it would make.
It becomes a problem if you want to (or are forced to) sell your home. Which was the case in the last recession, people taking out hugely leveraged mortgages in the boom, then being forced to sell in recession and being put into negative equity
Edit. If you only own say 5% of your property and help to buy ‘owns’ 20% with the rest being mortgage, the 3% difference will come from your equity. I believe
You should have written "totally fictional" in white text.
You misunderstand his point. Many people voted leave because they can't pay for luxuries like"cheap travel to the EU". Telling them about the benefits of free movement alone is not going to convince them!
Free movement is about labour, goods, services and capitals which as far as I know isn't a luxury and directly linked to most people work.
People took a 20% loan from the government to " help to buy a new build house"
This loan is interest free for the first 5 years
The idea being that in 5 years due to inflation etc they would be able to remortgage and get rid of the help to buy
That's because after 5 years the government would start charging interest but the way that interest is calculated is designed to get people to pay back as it increases each year and is basically (last year's rate add inflation plus one percent)
Now if the pound tanks it is likley inflation will be high... Let's say at least 3 percent
Year one it's 4% year two 8% year three 12% etc on loans of up to £125k
You can only remortgage to get out of this if there is sufficient equity in your house (and of course max loan to values often shrink in downturns and combined with a reduction in value could see a lot of people hit)
To complicate it you can only pay the help to buy lump sum either in full or 2 payments of 50% and most don't have that kind of lump sum available ... Hence they could be trapped with a hundred grand at credit card rates of interest in a few years
Add into this that as inflation goes high the traditional responce is to raise interest rates making their standard mortgage harder to renew as lenders will lend less against your salary and if you can't remortgage as you don't have the equity end up on standard variable rate (often much higher than the best deals available)
Basically people need the equity in the house or they could be a bit fecked...
That said I'm looking for a new house at the moment and have a shit ton of equity and cash so from a selfish point of view I hope it's a total car crash and there are repossession auctions like the last crash... That said I think the government is going to have to intervein or all their help to buy loans are at risk... Not sure how but I can't see the government wanting to risk mass evictions due to debt they own not being paid back by homeowners who can't remortgage
For context the UK government now has a 25 billion exposure to the UK housing market and I think help to buy is essentially a second charge so they stand to take the hit before banks would on any foreclosures
I understand something like 25% of new houses brought in the last 5 years have used help to buy and the interest payments are due to start this year for many if they can't remortgage
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I used help to buy for my current property. My understanding is that the amount I repay after the 5 years is 20% of the current value of the house. If house prices go down, I pay back less than borrowed in the first place.
I’m probably wrong about this mind - I read through the paperwork a dozen times and it is still unclear
I’m probably wrong about this mind - I read through the paperwork a dozen times and it is still unclear
Yes that's correct ref sale... But you will start paying interest on it after 5 years as well
And the equity has to be paid back after 25 years regardless
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I bought a house to live in forever, its worth is meaningless
If you lose your job and you can’t pay your mortgage and the house is worth less than you owe the bank on the mortgage - you’re fecked.
It’s value is crucially important to people with low equity in their properties during economic downturns.
What are we going to do? We voted to leave.
I'm sick of the negativity around, it doesn't help anyone. We can't change it now.
I'm not putting my hands over my ears, I was having a balanced debate with someone who didn't put his hands over his ear and shout "There will be hell, we're doomed". I did cover the details are missing on the "we're doomed" comments. But your comment leads to another point, there are people who won't speak out in fear of "your an idiot" response. It was a good debate and I need respond really.
https://quickonomics.com/the-worlds-top-10-economies-by-gdp/
We're not to shabby ourselves. For the size of us we're punching, that's the thing right no business would ever cutout a whole market. Money talks.
There are people who live abroad just for a few years for work, study or just to experience something different before coming home. There are others who have a dream of living in the sun but finances let them down or a family member back home getting sick. There are multitudes of reasons for people moving back to the UK. No UK citizen should have been denied a right to vote. That’s their right
It’s also clear many older people rely on their homes to be a pension, in the absence of anything else, and presumably will have to sell and downsize. And their numbers are increasing. They will care a lot about how sellable their homes are, and the equity to be realised.
Because both things are exactly the same.
What if those troops had all had to show their paperwork before boarding Johnny the fisherman from Portsmouth’s boat?
Well kinda... But if you have to remortgate And that remortgage is contingent on house prices the. It's not entirely meaningless is it
If money talked as loudly as you claim, Brexit wouldn’t have happened. It’s quite clear what money thinks of this, just look at the pound.
To be fair money do talks, that's why many companies have moved some of their activities within the EU or reduced their investments in the UK.
Not strictly true. For example remain weren’t using social media to bombard people with nonsense
Thank you. If I have misunderstood your comments then I apologies.
I do feel though that we tend to over generalise the typical leave voter. Yes some were what would be classed as 'the poor'.
But there are many who I know personally who would certainly not be in that classification.
The house market is fecked.
It was put to the people because of the conv back benches and was voted by the people.
The pound has problems because of uncertainty in market - it's really down to poor management on the UK side. The EU side had there fears that we'd divide and conquer - in fact we divided just look how many brexit negotiators on the Britain's side to the EU one?
You see the pound was a stable currency for years, but now it fluctuates way to much to invest in.
It was all those Conservative voters who were so poor who voted to Leave whereas all those rich Labour voters voted to Remain.