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    (Original post by _jackofdiamonds)
    yes.....
    notice I didn't say houses shouldn't level in cost (and my personal view is they ort to fall)

    But its not a sellers 'fault' if a buyer cannot raise capital like they could 2 years ago, its a buyers problem.
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    Buyers didn't have to raise any capital 2 years ago, there were 100% mortgages, 125% mortgages because "prices only ever go up". It was Alice in Wonderland stuff, and now we are reverting to normality.

    Sellers still think they are entitled to 100k profits because they sat on their arse in a pile of bricks for a few years.
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    (Original post by _jackofdiamonds)
    Buyers didn't have to raise any capital 2 years ago, there were 100% mortgages, 125% mortgages because "prices only ever go up". It was Alice in Wonderland stuff, and now we are reverting to normality.

    Sellers still think they are entitled to 100k profits because they sat on their arse in a pile of bricks for a few years.
    Actually going groveling to a bank is raising capital.

    Well it will please both you and me that because they are holding out they will make the inevitible worse.
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    This is an article from The Independent newspaper which claims Britain is a worse credit risk than McDonald's: http://www.independent.co.uk/news/bu...s-1059574.html
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    (Original post by Quady)
    Actually going groveling to a bank is raising capital.

    Well it will please both you and me that because they are holding out they will make the inevitible worse.
    If you go to a bank asking for 3.5x salary, or 2.5x joint salary, with a 10 percent deposit, you will have no problems getting it. The deals are 2 years ago are gone for good, or at least until in 18 years time since that's how long the housing market takes to cycle, and for people to forget the last bust.

    The problem is there are no reasonable houses most people could buy for this, because they are all overpriced.

    Solution: sellers have to lower their prices. But they won't because of pure GREED, so they will hang on for ages hoping to get it. The market could get moving tomorrow if they wern't all so greedy and deluded.

    However like I said, once unemployment hits they will have no choice but to lower price to move the house. Then the crash really begins.
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    (Original post by _jackofdiamonds)
    If you go to a bank asking for 3.5x salary, or 2.5x joint salary, with a 10 percent deposit, you will have no problems getting it. The deals are 2 years ago are gone for good, or at least until in 18 years time since that's how long the housing market takes to cycle, and for people to forget the last bust.

    The problem is there are no reasonable houses most people could buy for this, because they are all overpriced.

    Solution: sellers have to lower their prices. But they won't because of pure GREED, so they will hang on for ages hoping to get it. The market could get moving tomorrow if they wern't all so greedy and deluded.

    However like I said, once unemployment hits they will have no choice but to lower price to move the house. Then the crash really begins.
    Yea tell me something I don't know...

    The only point is that its buyers that started the problem as they weren't able to borrow. It wasn't that they collectively decided houses were overpriced.

    10% deposit sounds a little low to me, youd get a scummy deal with that.
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    (Original post by Quady)
    Yea tell me something I don't know...

    The only point is that its buyers that started the problem as they weren't able to borrow. It wasn't that they collectively decided houses were overpriced.

    10% deposit sounds a little low to me, youd get a scummy deal with that.
    The problem started in 2001/2 when prices started to get out of control, and people would just lie about their income on their self sert mortgages (encouraged by EAs). This meant prices were already unrealistic, and more people lied etc.etc.

    The boom is the problem, not the bust. The bust is a return to normality, and an end to a massive fraud.
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    (Original post by _jackofdiamonds)
    The problem started in 2001/2 when prices started to get out of control, and people would just lie about their income on their self sert mortgages (encouraged by EAs). This meant prices were already unrealistic, and more people lied etc.etc.

    The boom is the problem, not the bust. The bust is a return to normality, and an end to a massive fraud.
    So the 50% increase from 94 to 2000 was fine then? :P
    Fraud? Someone was willing to pay a price for something.
    Is 'finest' food a fraud because it retails for more than its manufacturing cost?
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    (Original post by Quady)
    So the 50% increase from 94 to 2000 was fine then? :P
    Fraud? Someone was willing to pay a price for something.
    Is 'finest' food a fraud because it retails for more than its manufacturing cost?
    It was fraud because they lied to get the mortgage.

    Also in 2001 most of the world was already near a recession and it might have been curbed then, but interest rates were cut below what they should have been and and the boom kept on going.

    The market faltered against in 2005 and against interest rates were cut to stop it crashing when it should have.

    I'm not a conspiracy theorist, but questions need answering to why supposedly indepedant central banks cut rates when they did, why they cut them again, and who removed houses from the CPI and for what reason. I can't believe that no politician or journalist is talking about these things right now.

    Anyway this is the mortgage fraud program (from 2003!) if this sort of thing turns you on. http://video.google.co.uk/videoplay?...67675&hl=en-GB
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    (Original post by _jackofdiamonds)
    It was fraud because they lied to get the mortgage.

    Also in 2001 most of the world was already near a recession and it might have been curbed then, but interest rates were cut below what they should have been and and the boom kept on going.

    The market faltered against in 2005 and against interest rates were cut to stop it crashing when it should have.

    I'm not a conspiracy theorist, but questions need answering to why supposedly indepedant central banks cut rates when they did, why they cut them again, and who removed houses from the CPI and for what reason. I can't believe that no politician or journalist is talking about these things right now.

    Anyway this is the mortgage fraud program (from 2003!) if this sort of thing turns you on. http://video.google.co.uk/videoplay?...67675&hl=en-GB
    oh right fraud on the part of people applying I gets ya.

    as for your questions:
    - central banks cut rates and kept them low to keep inflation in the midst of a lot of downward pressure.
    - nobody removed houses from CPI, it never contained them that was RPI, I think it was thought houses were not representitive of inflation (which they aren't), the FTSE100 is represented nor are commodities.
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    (Original post by DanGrover)
    :yep: Damn those lobbyists
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    (Original post by Disorder)
    Thats what they want to kill the dollar and create the Amero accordingly with the NAFTA agreement.

    Hey if all they want is to create a new world currency maybe you should be prepared for the Globero who knows!
    Globero?...Phoenix perhaps??

    http://www.capitolgrilling.com/forum...7b4a7a48c4a865
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    (Original post by _jackofdiamonds)
    If you go to a bank asking for 3.5x salary, or 2.5x joint salary, with a 10 percent deposit, you will have no problems getting it.
    But it would be almost impossible for most people to buy a home with that sort of loan/salary ratio. The average home in the UK costs about $170,000 so with a 10% deposit you'd need to borrow $153,000.

    Since the average salary in the UK is about $25,000 even if you could borrow 3 times your salary you'd be short by $78,000 ($153,000 - (3x$25,000))
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    (Original post by Howard)
    But it would be almost impossible for most people to buy a home with that sort of loan/salary ratio. The average home in the UK costs about $170,000 so with a 10% deposit you'd need to borrow $153,000.

    Since the average salary in the UK is about $25,000 even if you could borrow 3 times your salary you'd be short by $78,000 ($153,000 - (3x$25,000))
    Which is buy high prices are the main problem, not credit.
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    (Original post by _jackofdiamonds)
    Which is buy high prices are the main problem, not credit.
    That was based on a 3x earning multiple rather than 5x
    The reduction of the multiple is the 'problem' and the increased quality of credit profile required.

    High prices were driven by credit, the reduction of credit is now taking them lower not the raw price itself.
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    (Original post by Quady)
    That was based on a 3x earning multiple rather than 5x
    The reduction of the multiple is the 'problem' and the increased quality of credit profile required.

    High prices were driven by credit, the reduction of credit is now taking them lower not the raw price itself.
    No one has reduced the multiple, that has been the traditional lending rule and the same average multiple for 50 years. The quality has not incrased either, just reverted to what it was before the boom, ie proving you can save a deposit and not posing a risk to the lender.

    For some reason everyone thinks the last 10 years were normal circumstances, and that now everyone is being hard done by, at least the sellers still do. In reality the last 10 years have been a huge party without thinking, and now we are all going back to normal life.

    Why do you think only lending people what they can afford to pay back is a 'problem'?
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    (Original post by _jackofdiamonds)
    No one has reduced the multiple, that has been the traditional lending rule and the same average multiple for 50 years. The quality has not incrased either, just reverted to what it was before the boom, ie proving you can save a deposit and not posing a risk to the lender.

    For some reason everyone thinks the last 10 years were normal circumstances, and that now everyone is being hard done by, at least the sellers still do. In reality the last 10 years have been a huge party without thinking, and now we are all going back to normal life.

    Why do you think only lending people what they can afford to pay back is a 'problem'?
    I agree with everything you just said.

    But I was replying to this:
    'Which is buy high prices are the main problem, not credit.'
    that was a reply referring to 3x income multiples.

    High prices are not the problem.

    Personally I can afford a smoothy (many in fact) but I feel their cost more than their worth so I don't buy them.

    I cannot afford a 911, but (personally) credit would not be a problem, but the price is too high - its not worth it to me, so I do not buy one.

    I cannot afford an aircraft carrier. I cannot get the credit for it but if I could I would buy one, the price is not too high, credit is the problem.

    For people in this country the price of houses was not too high, they would have carried on paying more. The problem is they can't get that money to buy one anymore.

    Its a credit problem not a price problem.
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    It's not me that says there is a price problem and not a credit problem, it is the market.

    If the price is a problem, all it would need is for sellers for cut prices when they cannot find buyers, just like sellers in any marketplace anywhere.

    The only way to solve the problem with credit is to have government intervene in the market and strongarm banks. Although this would only lead to even more risk and debt and would probably result in an Argentina like bust if it were to carry on.

    One solution is swimming with the flow, the other against it.

    Just because we can't all get yachts on credit doesn't mean there is a problem with credit. In fact the credit market is working normally.
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    (Original post by _jackofdiamonds)
    It's not me that says there is a price problem and not a credit problem, it is the market.

    If the price is a problem, all it would need is for sellers for cut prices when they cannot find buyers, just like sellers in any marketplace anywhere.

    The only way to solve the problem with credit is to have government intervene in the market and strongarm banks. Although this would only lead to even more risk and debt and would probably result in an Argentina like bust if it were to carry on.

    One solution is swimming with the flow, the other against it.

    Just because we can't all get yachts on credit doesn't mean there is a problem with credit. In fact the credit market is working normally.
    How could you tell if price was the problem and not credit?

    The indicator I'm working off is that UK house prices only stopped rising after Northern Rock hit the skids because it couldn't get credit because of the similar US issues and LIBOR hit the roof.

    Rather than price being the problem, prices falling which caused problems in credit markets.
 
 
 
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