House Market Crash and IVA

[spenmotherhen]

Agree with you there size5

Life goes on hey!!

[luluj]

In an IVA and out of the home ownership pot due to it! To be honest it is quite comforting to know that whilst in our IVA and on a budget when things go wrong you simply pick up the phone and ask for the maintenance team ! No bills etc !

Hopefully in five years time, we can save the money we would be paying into our IVA for a year or two, use this as a deposit and get back on th housing market - but to be honest if we don't we don't - life is too short to worry.....health and family is far more important!

[jill109]

I hope it does crash, then our year four clause wouldnt stand. I never thought i would welcome negative equity lol

[Soulgrowth]

Gav ... do you know whether you got the job? ... just wanted to say good luck.

Debbie

[jpj]

Jill109... your year 4 clause doesnt take ALL the equity in your property (only usually 85%) so if you say have a 100k house,you still have 15k equity at the end of your IVA, if prices crash,you can escape the year 4 clause and come out your IVA with a house worth say 75k and be 25k in debt with negative equity..meaning your IVA hasnt cleared your debts!!

[kallis3]

But of course don't forget that unless you are on an interest only mortgage, the amount you owe on your house will also have come down.

If you are in negative equity, I would suggest that by staying put for a few years, your house will eventually go back into the black again.

At least you won't be making payments to your IVA, so you will effectively be much better off.

[johnt]

I absolutely agree jpj - we should not kneejerk, as there is still an enormous amount of wealth in the domestic property market in this country.

Try telling that to Barrat homes they've lost more than 40% of their share value last week and are now negotiating with the bank prior to further expected deteriation in the market.

Global inflation is now higher than in the 1970's, remember oil prices rocketed at this time causing double digit inflation rise. Ring any alarm bells. It should do. My advice sit tight and prepare for the worst. There may be a lot of capital locked into domestic housing, but if it stays there and dosn't move around more freely, then it's value will be lost to everyone.

[Beans on Toast]

It's looking like the housing market will mean more 6 year IVAs due to the lack of equity in year 4. If you are lucky enough not to have the, "extra year payment"clause, you will be all done and dusted.
We, on the other hand will most certainly be looking at paying in for the extra 12 months, so be it, as long as it's over then. The problem is a lot of people who were relying on their property to gain value for a possible F&F are going to be disappointed if prices are holding over the next couple of years.

[jpj]

I think most people in IVAs are on interest only.

I had a repayment mortgage once...i paid £1,000 a month for the first 36 months (over £36,000) and my mortgage went down by £3,000 !!!
Repayment mortgages are designed so that the first few years you are literally just paying off interest and not capital![|)]

[johnt]

I think most people in IVAs are on interest only.

I had a repayment mortgage once...i paid £1,000 a month for the first 36 months (over £36,000) and my mortgage went down by £3,000 !!!
Repayment mortgages are designed so that the first few years you are literally just paying off interest and not capital![|)]

and the damn shame of it, all those desperate families trying to get on the housing ladder 15 months ago with a hundred percent plus loans, will now probably be staring down a dept filled black hole, that not even an IVA could posibly dig them out of.

[kallis3]

I had an interest only mortgage once - my endowment company then told me that I would have a shortfall of about £30,000 when my mortgage finished.

I changed to a repayment one over the same period of time. OK, my payments doubled overnight but at least I know that it will be paid off in full.

I was negative equity once, but by staying in the same house I came out the other side and we now have some equity.

[TheMatrix]

The way I see it is the housing market ends up goes up over the long term, during this time however house prices will make corrections and could well crash too.

As someone looking to get on the housing ladder in 2013/14 I'd obviously like to see the prices as low as possible, at the moment even without a IVA prices are well out of reach of the first time buyer anyway.

If your in it to live in it, as I will be you'll be fine. If your in it though to make money then may be you deserve to have your fingers burn't. But I have no sympathy for the latter, they were the people who forced the market up by playing their property development games in the first place, trying to make a quick buck by adding a lick of paint to the property.

But as I say, even with the crash of the 80's and 90's the market over the long term went back to it's previous level and still carried on going up. So longer term should be fine.

A crash is inevitable, house prices are well over priced. It is just a matter of time, it will happen again. It all comes down to the hurding effect, people follow each other like sheep. Recent example look at what happened with Northern Rock.

[kallis3]

I agree.

Way back in 1986, we bought a bog standard, three bed semi for £26,000. A couple of years later we part exchanged for the house we have now. We got £49,000 from the builder and that was only 94% of its 'value'. Not a bad profit for 2 years.

As soon as we moved into our house, it went into negative equity, but we stayed put as we always intended to, we eventually got out of that black hole, and even with a huge mortgage (bad advice from the bank) and a secured loan, we still have some equity left.

[michael.t47]

i hope you all agree now that it is crashing

[kallis3]

It's certainly at a standstill. Of the five houses for sale by me, not one has sold.

A couple of others nearby appear to have been taken off the market.

So glad I'm not planning on moving!