Thousands 'face negative equity'

  Eow is nighe 14:42 05 Jul 2008
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  jack 15:18 05 Jul 2008

When that term first came to popular use I thought and still think it is a bit of scaremongering on the part of the media.

Yes folk will have invested into something that turns out to at a later date to be worth less than they paid for- The somethings are in fact every manufactured item ever purchased with the emphasis on Cars- But I don't here a bleat about that very much and cars of all things have an Artificial depreciation value put on them by the industry to promote shifting the metal.

Coming back to property.
Most mortgages are taken out with a 20/25 year term. a fluctuation here and there is of no consequence providing the owner is not forced to sell through life circumstances- job loss/change- Even here the 'Loss' so called could be retitled 'Rent'.
We all have to pay to live somewhere.
No it is only the speculators [buy to rent] who stand to 'lose'

  Cymro. 15:32 05 Jul 2008

As jack suggests above there is bound to be a bit of fluctuation in house prices from time to time. It is only something we have lived through before under a different government and we came through it all right then so I dare say we will came through it again. It is very difficult to loose out when buying a house if you take the long term view.

  wiz-king 16:08 05 Jul 2008

I might be wrong on this - now days most mortgages seem to be on a four year term and then you have to re-mortgage, or so it would seem from all the fuss in the media.
I agree with you in that 20/25 years was the usual time a while ago - I have just paid off the last of my 20 year mortgage. The trend for people moving every few years makes it more likly that you wont always win but, if you dont have to move you should gain in the long term.

  jack 16:53 05 Jul 2008

Our House off plan 51 years ago and we are still here- to being somewhat out of touch with modern trends.
But it is still true to say that any 'Loss' due to price difertial over what ever period cant be written down as 'rent'

Taking this a little further I notice our 'Free Sheets' a thinner this week- Estate agents pulling thier horns in perhaps?
Less advertising then?

Which bring to mind an essay of many years ago when I doing something in Marketing.

'This are getting tight, we will have to cut budgets
Reduce advertising by 25%
Thing are getting no better the sales are down
Well cut some more let some of the sales force Go cut the advertinsing some more.
Dinner at the club tonight then, while I've still got my expense account
;-}

  Colin 17:03 05 Jul 2008

"If a house loses its value it is not necessarily a problem unless the owner has to move, remortgage, or cannot afford to pay the mortgage."

That's the point - the article relates to mortgages taken out a little over a year ago. A mortgage is a long term product, but the media love bad news. We bought our current house in 1991. Within 6 months it had lost 15% of what we paid for it. Now, 17 years later, it is valued at over 100% of what we paid for it.

  jack 17:46 05 Jul 2008

'But it is still true to say that any 'Loss' due to price differential over what ever period cant be written down as 'rent' '

I should have said

'Can be written down as Rent'
Of course

  Forum Editor 19:06 05 Jul 2008

isn't a new thing, it's been around for a long time, and the one thing we don't need right now is an increasing sense of panic provoked by sensationalist media reports.

Believe it or not, there are people out there who believe evrything they read in a paper, and everything they see on TV - they are just sitting there, waiting to be scared witless.

  sunny staines 19:09 05 Jul 2008

its only small areas of the UK that are affected, like manchester,glasgow, se london and then its mainly flats.. most the the reports are hype & speculation.

  Eow is nighe 20:43 05 Jul 2008

FE would you state that there isnt a crisis or a major problem with the economy..?

from what you stated "Believe it or not, there are people out there who believe evrything they read in a paper" BUT isnt that good to keep on track with whats happening in the markets of today & would you suggest that some of what we read or hear is Lies..?

  wiz-king 20:56 05 Jul 2008

Most of what you can read in the papers is deceitful half-truths or anything to make a penny or two for the papers by increasing sales.

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