From: M Holmes 
Newsgroups: uk.finance
Subject: Re: Lie to buy
Date: Tue, 25 Sep 2007 11:12:12 +0000 (UTC)
Bytes: 1867

Andrew MacPherson  wrote:

> If there are 101 buys for 100 properties there's upwards pressure on
> prices. If there are 99 for those 100, there's downwards pressure on
> prices.

If 101 buyers can get 120% mortgage at 8% that's a very different
position from 80 buyers being able to get an 80% mortgage at 9% with the
other 19 having to pay cash or go without.

The bursting of the credit bubble is likely to make more difference to
prices than supply and demand numbers. Plus, as prices start downwards,
the ratchet effect on the books of banks will most likely mean that
loan-to-value ratios continue to decrease.

We're now at the start of classic debt-deflation dynamics. I have to
say, that so far it's been even more interesting than I thought it would
be. I think we'll see some quite exciting times over the 16-18 year period.

FoFP