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Debate House Prices
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Homeowners are in for a drop in prices in next year’s first half
Comments
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House prices ‘will take five years to return to peak’
Brit, is it me or has your 38 size red font moved down to a 24 size black font as the scale of the crash starts to slow? Only kidding my old fruit.
I'm well in to me graphs at the moment. So a headline of five years to peak means that house prices could look something like this:
So, although the headline is quite shocking, a five year return to peak would make the 'crash' look more like a very small blip in the grand scheme of things.
Maybe that will happen. But, whilst I can't believe I'm being more pessimistic that Brit, I think a return to 2007 prices will take a couple more years than that.0 -
Thats a pretty long bull trap
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Graham_Devon wrote: »I put the quote in because I wanted to highlight specifically that bit.
If a small number of cash rich buyers have supported prices, and we are going into second falls...
What is going to support prices in the next leg down and stop them falling?
It can't be lending, it can't be cash rich buyers...so what?
A number of items, mainly low supply. And as you have ruled out lending, check this out: http://www.cml.org.uk/cml/media/press/23970 -
Graham_Devon wrote: »Thats a pretty long bull trap
Forget your bull and bear teams for just five minutes Graham. 95% of people in the real world have no idea what a bull trap even is, because it isn't relevant to them.
If this graph were to be the case (as the article states), then homeowners would see a steady upturn over five years back to where they were, which is quite a quick turnaround in the grand scheme of things. If prices rose steadily for the next five years after that (2% to 5% per year for example between 2015 and 2020) then looking at house prices from the 1950s to that point would show that the 'crash' of 2007/8 wasn't really much of a crash at all.
As I say, I don't agree with Brit's article and think it will take a while longer. Worrying times that I am thinking more pessimistic than an article posted by Brit...0 -
Graham_Devon wrote: »Well they have to be cash rich to get the mortgages.
You need that deposit, and deposits at the moment are not exactly small change.
the average current deposit is currently between 20% and 25% for buyers
i'd call 40% deposits cash rich. how much is a cash rich deposit for you?0 -
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It does make it look like a small blip doesn't it.So, although the headline is quite shocking, a five year return to peak would make the 'crash' look more like a very small blip in the grand scheme of things.
Does this mean we haven't had the crash then
As you were one of the ones saying we will definitely have a crash at some point? Freedom is not worth having if it does not include the freedom to make mistakes.0 -
To my idea of things to be "cash rich" I would say you would have to be 50% or more.
If you do not have more money than you need to borrow I would not class that as "cash rich"
But that's just how I think if you need to owe more than you own you are not cash rich in terms of buying.0 -
Graham_Devon wrote: »I'd say having 40k in the bank is cash rich, as per the 25% deposits.
i know that you're going to disagree with me but that has only been the case for the last 2 years.
previous to that average deposit was always under 25%.
The average deposit on a mortgage was 23.8% in 2006, rising to 25.9% in 2007%, an increase of 8.8%.
so a 25% deposit now shouldn't be supporting prices because that is the same as it was in 2006.
however, looking regionally there were a few areas that required a higher LTV
http://www.mortgages.co.uk/mortgage-trends/year/average-deposit-percentile-06-07.html
but for FTB's the average then was 15%The average deposit as a percentage of the mortgage taken out first time buyers through Mortgages.co.uk was 14.4% in 2006, going up to 15.0% in 2007%, an increase of 4.2%.
i still can't see why you think people with cash rich deposits are supporting prices.
http://www.mortgages.co.uk/mortgage-trends/ftb/average-ftb-deposit-percentile-06-07.html0 -
Some bulls use the whole supply and demand argument as a reason for why prices must go up.
What I dont understand is IF there is such demand why are contruction/building/supplier companies going out of business all over the place. Why are they no longer building and keeping afloat - if there is such demand for extra housing?"For those who understand, no explanation is necessary. Those who don't understand, dont matter."0
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