[chief barker]

What do you all think?

http://www.dailymail.co.uk/pages/liv...n_page_id=1770

[Uridium]

Easy solution is to just spend less than you earn each month. Simple.

[chief barker]

Originally Posted by Uridium

Easy solution is to just spend less than you earn each month. Simple.

What if you can't i.e fixed rate mortgage coming to an end.

[Pezerinno]

"...dire consequences for house prices..."

[mjn]

Been tightening the purse string since i was made redundant in Jan this year, although i started a new job in July, we've continued on with the restricted budget, at least until this year has finished. Maybe early next year, when the mortgage fixed rate expires and we re-mortgage, our budget will change. I'd also like a decent holiday, but that will not happen for a few years yet, round about 2009 i reckon on current savings.

[Dony]

Originally Posted by chief barker

What if you can't i.e fixed rate mortgage coming to an end.

Mine needs to be renewed by the end of this month. Phoned my bank last week for quotes, then got some others. Went back to the bank yesterday to sign up and all their rates had went up by .2%


Anyone know of any not to be missed deals?????

[wombar]

It's been coming for a while to be honest, I've heard a lot of rumblings in the mortgage industry (have friends who work in various companies) about budgets drying up over night etc. This basically means that from now on, mortgages are going to be given to people who can realistically afford them instead of every man and his dog who tend to rely on equity increases instead of actually paying back the mortgage.

There's just been too much irresponsible lending (and borrowing) throughout every financial sector with many people who would never traditionally have been approved basically being given a blank cheque by the banks/lenders.

I don't wish hardship on any single individual but it's going to take a miracle for some people to keep their houses which they should never have been approved for in the first place. Last year all I heard was "house prices will always go up so I'll never be out of pocket", well now they're slowing down and the drop IS coming by the middle of next year which is going to be a bad time for everyone.

So to answer your question, yep, it's time to start hoarding the pennies

[Uridium]

Originally Posted by chief barker

What if you can't i.e fixed rate mortgage coming to an end.

spend less on something else.

Sorry to sound blunt but think back to the days when Credit wasn't so easily available. If my parents didn't have the cash to pay for something then we didn't have it. simple as.

[kingfats]

Originally Posted by Uridium

spend less on something else.

Sorry to sound blunt but think back to the days when Credit wasn't so easily available. If my parents didn't have the cash to pay for something then we didn't have it. simple as.

That's what i was also taught when young and it's a rule i follow today.
If i can't save up for something and buy it outright,i don't have it.

[Duncan G]

Originally Posted by chief barker

What do you all think?

http://www.dailymail.co.uk/pages/liv...n_page_id=1770

I think the Mail story on the photo shoot David Baileys wife did for Agent Provocateur more interesting, so I put it on the forum. Dont all rush to thank me

[Ed Selley]

Originally Posted by chief barker

What if you can't i.e fixed rate mortgage coming to an end.

If your outgoings exceed your income for anything more than a freak blip then it is game over. You would geniunely be better selling up now than going down gracelessly over a period of time with all the consequences it entails.

[Setenza]

Oh I know a thing or to about the income/outgoing ratio

Now, I keep the mathmatics simple. If you can afford it, buy it. If not, save for it.

Only spend money on essentials. Beer, food and toliletries.

If you can't afford luxury goods, find a compromise. I can't afford to own a lot of DVD releases and the new formats are right out. But people can "lend" you material

The internet is also a wonderful resource

Libraries often have the latest popular titles and books. Some even have a good magazine selection.

Shop around. There's always bargains to be had. I recently discovered the benefits of Primarks.

Life is getting to materialistic anyway. If you don't need it then why by it.

Consumer electronics is a circle jerk. There's always gonna be something new and better on the horizon. Therefore purchase using your head and not your "gadget boy" ego.

[Moosh]

Originally Posted by Xusia Of Delos

Oh I know a thing or to about the income/outgoing ratio

Now, I keep the mathmatics simple. If you can afford it, buy it. If not, save for it.

Only spend money on essentials. Beer, food and toliletries.

If you can't afford luxury goods, find a compromise. I can't afford to own a lot of DVD releases and the new formats are right out. But people can "lend" you material

The internet is also a wonderful resource

Libraries often have the latest popular titles and books. Some even have a good magazine selection.

Shop around. There's always bargains to be had. I recently discovered the benefits of Primarks.

Life is getting to materialistic anyway. If you don't need it then why by it.

Consumer electronics is a circle jerk. There's always gonna be something new and better on the horizon. Therefore purchase using your head and not your "gadget boy" ego.

If only more people heeded your advice.

Cheers
Moosh

[geomuss]

Originally Posted by Xusia Of Delos

Only spend money on essentials. Beer, food and toliletries.

essentials

[gavan]

Originally Posted by chief barker

What do you all think?

http://www.dailymail.co.uk/pages/liv...n_page_id=1770

People are only just realising this stuff now that it makes the front page?

The end of the boom has been on the cards for quite a while - the unwinding started during the first half of the year.

The problem for most people is simple - too many people living beyond their means and relying on credit (ie personal debt) to get them through.

The credit will be drying up and if a recession sets in, as is likely, many won't be able to service their debts for even a month or two without a salary. Then it should get really interesting. All too many people who have entered their adult lives in the last decade or so have known nothing but economic prosperity and easy credit. They are in for one heck of a shock.

[Kieron]

house prices have pretty much reached a ceiling and will stay there for the next few years. I certainly don't forsee a crash though. As always in life it pays to be frugal with your money.

[Setenza]

Originally Posted by geomuss

essentials

Yes

A foaming libation on ocassion, keeps me sane. It's one of the few vices I have left.

Originally Posted by gavan

People are only just realising this stuff now that it makes the front page?

The end of the boom has been on the cards for quite a while - the unwinding started during the first half of the year.

The problem for most people is simple - too many people living beyond their means and relying on credit (ie personal debt) to get them through.

The credit will be drying up and if a recession sets in, as is likely, many won't be able to service their debts for even a month or two without a salary. Then it should get really interesting. All too many people who have entered their adult lives in the last decade or so have known nothing but economic prosperity and easy credit. They are in for one heck of a shock.

Couldn't agree more. I have at least started to address my financial situation this year and hopefully will have a legally binding plan secured by the end of December.

It will then be manageable.

In the next 18 month I think the financial instituions will be a lot harder on those struggling and there may well be less options open to people.

[gavan]

Originally Posted by Kieron

house prices have pretty much reached a ceiling and will stay there for the next few years. I certainly don't forsee a crash though. As always in life it pays to be frugal with your money.

They've been able to reach that ceiling because easy and cheap credit just about enabled first time buyers to enter the market and allowed people to speculate with schemes like buy to let.

Take away the lax credit and prices will fall dramatically. Should the economy falter first and unemployment start rising, expect a dramatic rise in mortgage defaults.

It all points to a steep drop in prices.

[Pezerinno]

Originally Posted by Kieron

house prices have pretty much reached a ceiling and will stay there for the next few years. I certainly don't forsee a crash though. As always in life it pays to be frugal with your money.

I would guess there will be a drop in house prices of 30-40% within the next few years.

[Yandros]

Originally Posted by Nick25

I would guess there will be a drop in house prices of 30-40% within the next few years.

Yep. If it's anything like last time it'll take about 2 years. The IMF reckons that we're 40% overvalued, and that certainly tallies with the rental to mortgage cost ratios

[Pezerinno]

Originally Posted by Yandros

Yep. If it's anything like last time it'll take about 2 years. The IMF reckons that we're 40% overvalued, and that certainly tallies with the rental to mortgage cost ratios

About time too; it should have crashes in 2004 but good ol' Gordan wanting to show how strong his economy was...

[gavan]

Originally Posted by Nick25

About time too; it should have crashes in 2004 but good ol' Gordan wanting to show how strong his economy was...

We were in for economic slumps in 2001 and 2005 but both times it was averted by cutting interest rates (absolutely slashing them in 2001 in fact) and increasing the money supply along with public sector spending/government borrowing.

Unfortunately, 'boom and bust' is a feature of how our economic system functions. A mild recession every now and then isn't such a bad thing as it acts like a pressure valve and anyway the overall curve of growth is upwards. But fiddling with the 'free market' to put off 'natural' recessions, the Western governments have set us up for the mother of all crashes.

The coming couple of years are not going to be pleasant. They will be especially a shock for anyone between 18 and 30 as they have never known anything in their adult lives except economic good times, cheap credit and plentiful employment prospects.

[paulyoung666]

i have hopefully made the right move in fixing my mortgage for 5 years at 5.94% , at least my biggest outgoing is not going to alter till the deal finishes , seemed sensible enough

[RugbyAl]

A recession should bring interest rates down but this may be balanced by the'credit squeeze'. My fixed rate ends next June so dont know what will happen...

[Dony]

Originally Posted by paulyoung666

i have hopefully made the right move in fixing my mortgage for 5 years at 5.94% , at least my biggest outgoing is not going to alter till the deal finishes , seemed sensible enough

Hi Paul......do you mind saying who you went with? My fixed rate finishes at the end of this month and best I have been quoted is 6.2% n

[overkill]

Would agree that this has been on the cards for a while. I notice though, that the good old DM was erm', 'slippery with the truth' there. The changes to consumer credit rules were applied in the 1980's (under their hero's), and consumer overspending is a long standing feature of a modern consumerist society, not exclusive to any one govt or country. I notice as well that the recession of the 1980's, which their govt was largely responsible for, seems to have been changed to being the catalyst for their election!?

I agree totally with Xusias comments. We all live beyond our means, and it's time for a serious re-alignment. With my hours being slashed since July, we've had to make a start, but with three cuckoos, sorry kids, demanding money as if it grows on trees it's not easy.

[paulyoung666]

Originally Posted by Dony

Hi Paul......do you mind saying who you went with? My fixed rate finishes at the end of this month and best I have been quoted is 6.2% n

chelsea building society , i was with them for 2 years previous to that as well , mind you it was setup about 2-3 months ago , that might be part of the reason

[Mooky55]

Originally Posted by Nick25

I would guess there will be a drop in house prices of 30-40% within the next few years.

Would you like to take a bet on that?

The truth is depending on where you live, the effect of more expensive credit will have different effects.

Some people (flat buyers in leeds for instance) have already lost money on purchases even though the country is STILL experiencing positive house growth over all.

If you live in london - prices have gone up 17% since September last year, with the only sign of the credit crunch have any kind of impact being that property prices have had the lowest increase in growth in the last two years, but no signs of it stopping yet.

I dont own a house, live in London and will certainly not be putting my hard earned cash into some sort of property investment till things settle down a little.

I know its unfair to those who have bought already, and are now finding that they might not be able to afford the increase in mortgage repyaments, but at the same time it makes me feel that those people who over-reached themselves also contributed to the surge.

Anyway, a price drop of 30/40% is NEVER going to happen. It has never happened in the history of housing. The best or worst case (depending on where you are on the ladder) is probably a period of price stagnation for 2-5 years while salaries catch up with house price growth.

Personally I am hopeing it does go down.. maybe I will be able to buy a house in the area that I live in..

[Simon_Dugdale]

Originally Posted by Mooky55

Anyway, a price drop of 30/40% is NEVER going to happen. It has never happened in the history of housing.

I bought a flat for £70000 way back in 1988. A years or two later the one below went for £42000. Work that percentage drop out!!
Of course if you're in it for the long term then things can improve ... sold the flat for £160000 in 2002.

[Kieron]

Originally Posted by Mooky55

The best or worst case (depending on where you are on the ladder) is probably a period of price stagnation for 2-5 years while salaries catch up with house price growth.

That's exactly what is going to happen.