Comments on: I am buying a flat in SE London with a 103% mortgage but everyone seems to worry about a property crash?

By: Peter K

Peter K — Sun, 31 May 2009 12:57:45 +0000

You are too young to remember the horrors of negative equity and high interest rates.

I remember the early 90s. First house prices go down while interest rates go up. My mortgage doubled. I could afford to pay. Many couldn’t. These people they tried to sell their houses. The sale no longer covered what they borrowed. They lose their house because the bank repossessed it. The bank sells the house for even less than the market value. The hapless borrower now has no house and owes the bank many thousands. Are you prepared for that?

By: Debs

Debs — Sat, 30 May 2009 02:30:15 +0000

Borrowing more than your asset is never a good idea. Its a betters market, the more it goes up, the better but then the further it has to fall. Something will happen at some stage as there is not enough people to afford housing at current prices at some stage supply will outstrip demand and prices will start to fall the interest rates will rise again, provided you can afford the repayments for however many years it takes to recover, then fine, make sure you get a fixed rate for as many years as possible, even if that means alot more now, you will be better as you will be sure of your payments for the next 10 years!

By: hairy1

hairy1 — Thu, 28 May 2009 20:32:25 +0000

you pay your money and you take your chance just like all home buyers.

By: skylvrsyxdank

skylvrsyxdank — Wed, 27 May 2009 00:23:23 +0000

good, then you can worry with them and watch your “investment” as it goes it’s course though your life drama. IF EVERYONE STOPPED PAYING THEIR HOUSE PAYMENTS AT ONCE, WOULD THEY EVICT EVERYONE???? DOUBT IT!!! Did we forget we are the majority!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! you freaking slave!!!

By: george_graham_crayford

george_graham_crayford — Mon, 25 May 2009 20:56:37 +0000

yes, do you really want to owe 100/150,000 in 4 years for a 40,000 flat ?

By: Rachel

Rachel — Sun, 24 May 2009 04:50:41 +0000

You wont loose money on property, espcially in London. Even if there was a crash, as long as you dont plan to move out within the next few years you will be fine.
I bought my flat 3 years ago and people were talking about house prices and crashes then…it will happen but I would go for it

By: 2 good 2 miss

2 good 2 miss — Fri, 22 May 2009 22:14:08 +0000

i brought my house seven years ago and got told the same thing then…. my house has gone up £100k so im glad i didnt listen to them.

Houses will go back up even if they fall…. as long as you can afford your mortgage payments then you have no problem.

By: PepsiLime

PepsiLime — Tue, 19 May 2009 12:58:07 +0000

I don’t necessarily think it’s a bad time to buy, but I think you have a bad mortgage. I take it you’re borrowing 103% of the value of your property? So if things got tough and you had to sell your property for what you bought it for, not only would you have to give 100% of the proceeds to the lender, but also 3% more of your own money.

By: Mrs_C

Mrs_C — Sun, 17 May 2009 01:50:36 +0000

There is absolutely no way of predicting what is going to happen. Taking a 103% mortgage is a risk, but worse case scenario, you have to hold on to the flat until the market picks up again and you can sell it.

There is such a shortage of housing in London and so many people movnig here though, it is unlikely it will really crash, more likely the increases will slow.

By: michelle a

michelle a — Wed, 13 May 2009 17:31:44 +0000

I have been reliably informed that there is going to be another interest rate rise in September and another in December. So two more this year!!!