I got a head of steam on the other post and decided it needed to separate posts for the whole rant ;-)
Again, everyone’s getting bent out of shape at falling property values; it’s only relevant if you’ve trying to move!
They had a guy on the radio moaning about his 2 year old house with negative equity, 95% LTV and now the end of his fixed rate… with no option but std. variable. They were interviewing him ‘cos he’s had to get a second job’… ahh didums!
I wonder if he’s canceled his sky TV, mobile, gym membership, sold his 42” plasma TV etc? (I suspect not by the radio station, accent and location).
So now they say property is down 12% p.a. and the media are all over it. Where were they (the media) when it was up 10% p.a. for the last 3 or 4 years? (bar the last few months of last year) We are well into the media creating a self fulfilling prophecy in creating worry and instability.
Last summer some pundits suggested we needed a correction in the market of some 25%. Now the main stream press are saying we’re heading for a 25% overall drop and it’s the end of the world... NO ITS NOT! It’s only a problem if you try to sell! You took a mortgage with a short term discount and agreed to pay the rest for the next 22 years at SVR, so keep paying and in 5 years time you’ll be back into equity and you can move.
Rant over.
iX