To worry about falling house prices

[Ll81]

They say prices in central London have been falling for a while and this is rippling out to the rest of the country. Also lots of talk about raising interest rates and they could also be another downward pressure on prices along with lots of EU nationals leaving.

Anyone else worried that falling prices may mean many that have bought in the last few years maybe stuck in ne?

pretty sure you can no longer get an interest only mortgage unless as an individual you earn 100k, 1 reason less are entering the BTL market.

Where on earth did you hear that?

The criteria for interest only have become tighter over the last years, but the product has not disappeared. Some banks also do "part and part", part capital repayment, part interest only.

@Blankscreen, why do you talk about a disparity that needs to be stopped? It is up to the regulators, not to individual banks, to decide whether interest-only and BTL mortgages are allowed, under what conditions, etc.

Lending interest-only to financially illiterate people who don't understand they still need to pay the capital back is irresponsible.

But lending interest only (whether for BTL or not) to financially literate people who understand what they're doing is not. It then becomes a matter for the regulators and what, if anything, they want to do about the impact that BTL has on the housing market and on first-time buyers.

PoppyCherry my DS got one a few years ago & that was the criteria at a number of banks.

Although this was in London.

They don’t do special mortgages for London 😭

Have seen three recession house market crashes, yep you are going to be in negative equity, however, the house you want will also have crashed.

I took DIL to look at a house last summer, on the market for more than they could afford. 375k needed a lot doing to it. they offered 300k it was accepted, estate agents said we cannot believe this way too low. 9 months later the market has fallen further in their area.

Unless you are downsizing and looking for a nest egg of cash, it really doesnt matter long term.

Well Welsh if you’re in negative equity you won’t be able to sell your house to buy the one you want, no matter how cheap
It is. Not unless you want to front up the difference in cash, which no one would do unless a) they had it (not common ina. Recession) and b) were desperate

confused

Well, I’m going through the process of acquiring an interest only mortgage (have agreement in principle, just waiting for house valuation), and I don’t earn anything like £100k

Took so long to sell our house in a recession 1990-1997 we had saved a lot of money 40k so were able to jump. Originally listed at 125k 1990 sold for 84k 1997. Keep saving is my advice.

The problem with a recession Welsh, is that many people are unemployed. Saving isn’t very common during a recession, that’s the point of it really

And also, what did you do with your negative equity? Pay it off? That’s a pretty bad waste of cash. Mortgage companies only agree to allow a property to be sold for less than the mortgage in exceptional circumstances

I would not have considered moving if we had been unemployed, just hunkered down and prayed. We have been dirt poor, eating beans on toast waiting for next pay day. Paid interest rates on mortgage of 18% every month Abbey National post would arrive with an increase it seemed. It was hard, no car no money for buses. Son went on back of pushbike, or I walked everywhere with pram FIL paid for. Gawd I was so slim in those days... lol..

I hope they do drop, we want to move but what we want is about £70-100k out of reach, proportionately our house would drop by a smaller margin and as we have a good amount of equity we have a very good margin of safety before negative equity.

duckbill no harm in taking a cheeky punt when making an offer in a falling market.

Cherrycokewinning well duh! But if your buying a house for 150k you probably wouldn’t need an income of 100k. Try and find a house in London for 150k.

That doesn’t really affect whether interest only is available or not?

PoppyCherry I guess it depends on the value of the property & what other assets you have.

London prices are appalling, overseas investors buy up sight unseen and let them sit there. Not just London a surveyor we know from Manchester sold a whole block of flats new build to a Chinese consortium. That is the truth of it.

Also is it BTL?

Have a look at this.

www.theguardian.com/society/2017/jun/13/foreign-investors-snapping-up-london-homes-suitable-for-first-time-buyers

I hope they fall where I am (Northern England) . All I can see is first time buyers house prices rising-in part because of the stamp duty thing, and also because there's a real shortage in the 140k-180k bracket. (What you would pay for an ok semi in a decent area).
If we could buy a house I would be freeing up my council house for someone else. Everything feels so stagnant right now.

DS bought at the end of 2015 & I’m defo not imagining it.

www.google.co.uk/amp/s/amp.theguardian.com/money/2015/oct/12/interest-only-mortgages-house-prices-controversial-loans

Ok, but BTL mortgages have nothing to do with income or assets held (albeit I appreciate interest only doesn’t necessarily mean BTL).

That was to confused

IME traditionally BTLetters (is that a word) as in big time ones would use interest only to fund their empire.

Interest only mortgages do take into account income, assets, etc.