It's true - houses just aren't moving

neverdespairgirl

EdInvestor wrote: »

Anyone who really is desperate to move can always rent out their home, and then rent anew where they move to.So genuine forced sellers look like a very small minority compared with last time...

On that basis, what credibility do the property price "crash" figures have? At 20% of normal sales and falling, you could argue we are rapidly approaching a false market.

I don't think it's quite as simple as that. A lot of people won't be able to get consent to let on their residential mortgages. Even when they do, it's for a limited time, and the lender may after that time insist they go to a BTL mortgage, with higher rates, and max 75% or 80% LTV.

And there are other sellers - those who lose their jobs, or split up, or whatever.

I agree, there will be a lot of accidental, reluctant LL. But not everyone who wants to move by a long chalk!

neverdespairgirl

EdInvestor wrote: »

Other than recent borrowers from Northern Rock on 100%+ mortgages who cannot move and will be migrated onto a punitive SVR, nobody else is forced to remortgage.Everyone has the option of going onto the SVR and at most banks it is not much higher than the best deal, at some it is lower, because no fees.

Northern Rocks's SVR isn't worse than lots of other banks, as I understand it.

SVR at most banks isn't much worse than a lot of their "deals". But it is worse than a lot of the rates people did have which are now ending.

neverdespairgirl

mircea wrote: »

As always the doom - mongers on this board are talking crepe. The housing market has stopped because the bank will not lend anymore. Not to people with good credit and big deposits, not to people with bad credit and no deposits. The banks are not lending money to anybody - as simple as.

With a decent deposit, good credit, and realistic multiple, you certainly can get a mortgage now. It's the 8-times-income and 100% mortgages whcih have gone.

mewbie_2

neverdespairgirl wrote: »

I'm going to be honest here, and say that I don't like the idea of anyone being evicted, even if they are a bling-to-the-max BTL landlord.

I agree.

It's easy to lump BTL investors, estate agents, dare I say lawyers?, journalists, etc. together and make them targets of hatred. If someone made money out of BTL I have no problem with that, they jumped into a bubble and took the risk. I couldn't do it because I'm not a gambler. I don't believe they were solely responsible for the pyramid selling scam either, you need to look much higher up the food chain.

However. I do not like to have my nose rubbed in it by every johnny-come-lately who happens to have made a buck, and then needs to tell the world. I don't want to know what you made, what you own, what you earn - it's shallow and insensitive to those who have less.

HammersFan

carolt wrote: »

You're an intelligent guy, EdInvestor. Why don't you just give up trying to argue the unarguable and win an argument you cannot possibly win?

Do you really, honestly, in your heart imagine that house prices are going to stop falling down the ski slope and just sit there, waiting patiently until money returns to the market?

Oh, come on......

Carolt - this post does you no credit. Because someone disagrees with you they should not post at all? I find this approach very patronising and it is not wonder that people get angry with your posts of this nature.

Do you know the future? Which numbers will win the Lotto on Wednesday (please PM me those)?

EdInvestor's points are contrary to the stuff being dished out in the daily press, but the evidence says people are just not selling very much at all. And people aren't buying much either.

!!!!!! makes a good point about who will blink first - sellers or buyers. I know you don't agree with my views, but I'll post them anyway. One scenario that I can see happening is cuts in interest rates into mid next year bringing people back to the market pretty much at today's prices. Several lenders are already nudging down their rates and its been a good while since we heard lenders 'closing for business'.

You would call that hopelessly optimistic - but its a sceanrio that is very possible in my view (especially if oil prices drop taking the heat out of inflation). Still Land registry doesn't show year on year falls - indexes from mortgage lenders are based on very low volumes (zero sales in many places) and very conservative lending.

The scenario where there are lots of forced sellers is a recession. That would be bad news all round in my view (and not just for people who bought in the last couple of years - its tough to save for a deposit without a job). There is also the point that the lots of people that bought in the last year or two (i.e. those most likely to have high LTVs) are probably still very happy with their homes (circumstances unlikley to have changed in a short space of time) - they simply do not have to move, and will pnly face problems in a recession.

mr.broderick

HammersFan wrote: »

Carolt - this post does you no credit. Because someone disagrees with you they should not post at all? I find this approach very patronising and it is not wonder that people get angry with your posts of this nature.

Do you know the future? Which numbers will win the Lotto on Wednesday (please PM me those)?

EdInvestor's points are contrary to the stuff being dished out in the daily press, but the evidence says people are just not selling very much at all. And people aren't buying much either.

!!!!!! makes a good point about who will blink first - sellers or buyers. I know you don't agree with my views, but I'll post them anyway. One scenario that I can see happening is cuts in interest rates into mid next year bringing people back to the market pretty much at today's prices. Several lenders are already nudging down their rates and its been a good while since we heard lenders 'closing for business'.

You would call that hopelessly optimistic - but its a sceanrio that is very possible in my view (especially if oil prices drop taking the heat out of inflation). Still Land registry doesn't show year on year falls - indexes from mortgage lenders are based on very low volumes (zero sales in many places) and very conservative lending.

The scenario where there are lots of forced sellers is a recession. That would be bad news all round in my view (and not just for people who bought in the last couple of years - its tough to save for a deposit without a job). There is also the point that the lots of people that bought in the last year or two (i.e. those most likely to have high LTVs) are probably still very happy with their homes (circumstances unlikley to have changed in a short space of time) - they simply do not have to move, and will pnly face problems in a recession.

You have a very nice writing style hammers fan, very diplomatic.
I do think prices needed to come down a bit though, they were getting ridiculously high. I too do not want to read about btl merchants going bust and losing everything. They are not the reason prices went nuclear. I am all for people having a punt at something just as long as they knew the risks.
I too also get fed up of reading the same negative threads from the usual suspects who have a vested interest in prices capitulating so they can finally buy a house even though they seem to love being in rented . I too get annoyed with certain members who flip when someone posts a disagreeing reply to one of their many threads. In fact it is getting quite depressing logging on to mse these days. We have lost the characters, the main reason i hung around....Very sad..

neverdespairgirl

HammersFan wrote: »

EdInvestor's points are contrary to the stuff being dished out in the daily press, but the evidence says people are just not selling very much at all. And people aren't buying much either.

The problem I have with EdInvestor's predictions is that they have been hopelessly over-optimistic, and I don't see any signs that this has changed. In April, he was saying:

Yep.The media have been over-hyping the whole credit crunch/recession/house price crash for months.And that's before you look at the bulletin boards, home of the doomster property speculators

http://forums.moneysavingexpert.com/showpost.html?p=10233857&postcount=5

and on the same day:

You need to factor in the likelihood that the credit crunch is eased (talks underway as we speak) and that borrowing becomes easier (though not as lax as before). This would likely stop the fall in prices, though also prevent any major rises for a while - the market would tick over for a period, as in 2004-05, with fewer deals, but not the current state of almost total freeze.

http://forums.moneysavingexpert.com/showpost.html?p=10217071&postcount=4

Also in April he thought the credit crunch would be done and dusted 6 months thereafter:

Latest guesstimate is maybe another six months until the market is back to reasonable normality (but not stpidity of the 120% mortgage variety.) Most people will just sit tight IMHO - it is the EAs and brokers who are most at risk because there are so few transactions..

http://forums.moneysavingexpert.com/showpost.html?p=10586823&postcount=61

In February, he was saying only newbuilds would fall in price:

IMHO price falls in both Spain and the UK are likely to affect mainly new build flats (on the coast in Spain, in provincial inner-city areas in the UK) due to oversupply - the rest of the market is likely to remain fairly flat .Most people will not experience a downturn, just a pause in price growth, like 2004-05 in the UK.

http://forums.moneysavingexpert.com/showpost.html?p=8852649&postcount=22

In Dec 2007, he reckoned:

Key factor. The UK market/MEW is likely to be quiet for the next few months but should start recovering later in the year/early next.Seems unlikely you will get anywhere selling it now, I wouldn't bother.

http://forums.moneysavingexpert.com/showpost.html?p=7550327&postcount=10

And in early Dec 2007, he was saying year-on-year falls weren't coming:

We do not talk about the great house price crash of 2005, do we? That's because it didn't happen, even though the graph makes it appear there was a fall. This is the mistake people make by extrapolating from m-o-m price falls to anual figures.

IMHO something similar to 2004-05 will happen this time.That's what the Bank of England wants to achieve at any rate - a pause in the rate of growth.Not a price collapse.

http://forums.moneysavingexpert.com/showpost.html?p=7180385&postcount=80

Also in December, he was saying that prices don't drop double digits except over years....

...its a 9ish percent drop in a market thats suppose to drop by 10percent anyway...!!/quote]

This is the kind of nonsense that misleads FTBs.Housing markets take YEARS to drop by a double digit amount.Currently the market is rising by around 7%, not dropping.

During the last crash, the total fall from peak to trough was only 17% and that took more than three years.The property market is not like the stockmarket.It moves very slowly indeed - prices have still not gone into negative territory yet in the US for instance.As for people who talk about falls of 30 or 40% , this is complete and utter rubbish.

http://forums.moneysavingexpert.com/showpost.html?p=7173507&postcount=70

And, apparently, in December he was saying prices would be flat in 2008, and resume growing in 2009:

I've said elsewhere I expect a pause a la 2004-05, which is what the interest rate rises were supposed to deliver. There was a danger that the credit crunch could accidentally tighten monetary conditions more firmly than desired and thus cause an unwanted crash.But the Bank has now taken action to prevent that, with more easing in the pipeline to neutralise the problem, and also there are signs the banks are getting a grip on the credit crunch.

So 2008 looks on track to me to be a fairly quiet year overall, with growth resuming in 2009.

and he didn't just say it once:

That's assuming there is a crash. IMHO we will just have a temporary pause in growth, much like 2004-05, mainly to enable a fall in interest rates and some salary increases to restore affordability at the bottom end.

http://forums.moneysavingexpert.com/showpost.html?p=7120107&postcount=41

http://forums.moneysavingexpert.com/showpost.html?p=7157881&postcount=31

He didn't even foresee the massive NI drops:

Much of the growth in recent years has been in London, NI and Scotland.As long as City bonuses hold up, it's unlikely there will be a London crash and NI is still coming up from many years of undervalued property during the Troubles.Scotland prices are still growing.

http://forums.moneysavingexpert.com/showpost.html?p=7115389&postcount=35

And in August, he thought a 2 year fix max was a good idea, because rates had peaked (!)

I'd agree with the solicitor's view that rates have probably peaked now, but IMHO that is more likely to lead to a period of "no change", rather than a fall. The reason is that inflation, though now dipping, needs to demonstrate that this is sustainable longer term.

In addition although some of the steam is leaving the property market, there are stimuli in the pipeline - eg a potential shortage of property due to HIPs. The bank will also be aware that last time it cut rates, the effect was to ignite the London property market, which remains strong.On the other hand, if the stockmarket turmoil affects City bonuses badly, that could dampen demand a bit.And if the market turmoil affects the real economy, the Bank certinaly wouldn't want to make things worse by raising rates.

http://forums.moneysavingexpert.com/showpost.html?p=6058182&postcount=24

So my general view is that EdInvestor is comprehensively wrong!

HammersFan wrote: »

I know you don't agree with my views, but I'll post them anyway. One scenario that I can see happening is cuts in interest rates into mid next year bringing people back to the market pretty much at today's prices. Several lenders are already nudging down their rates and its been a good while since we heard lenders 'closing for business'.

I think the scenario you suggest is possible, but unlikely. The credit crunch is not getting much better, and will be with us for a while. There is also the distinct likelihood of interest rates having to go up to prevent inflation taking off.

fc123

SouthCoast wrote: »

It is different in Brighton as they are immune from any correction in the property market.



http://www.theargus.co.uk/news/business/businessnewsbusiness/3560907.45_jobs_go_as_law_firm_shuts_offices/

I have to say that Brighton is, on the surface, not seeming to suffer but I believe a lot of property peoples are trying to keep the market up.
They can't forever, it's not possible.
They write laughable 'talk the market UP' statements (that they pay ad rates to publish) in the Free Property mags etc. but I know many who are in meltdown across all property sectors....lettings, new build devps, EA's.
They are my customers...who are not spending as much now.

I had a quick potter around RM tonight (haven't looked at BN2 for a while) and some asking prices are ridiculous. I can't work out what part of the local economy supports them. They aren't the 'commute to London' stuff either.

I last looked properly in 2005, when we considered selling and buying here.
Assuming my London home is the same price as then, the comparable properties in Brighton seem to have gone up by 50% (??!)

However, this house was on @ £3 million or a bit above 2 yrs ago and is still for sale but at £2.1 million now. I think it had an STC on it earlier this year but seems to be back on again.
http://www.rightmove.co.uk/viewdetails-20308505.rsp?pa_n=1&tr_t=buy

I like renting now !! As we get to live in a location (and I'm embracing the shabby chic lifestyle now) that we couldn't afford to buy in.
A mediocre semi opposite, without the full seaview or big garden is on at £600k....I can't work it out.

EdInvestor

neverdespairgirl wrote: »

Northern Rocks's SVR isn't worse than lots of other banks, as I understand it.

]NRK's is 7.49%, other banks seem to be in the 6-6.5% range.

ManAtHome

HammersFan wrote: »

... and very conservative lending.

But that's the sticky bit. I think banks will be writing off/down for some time to come (Merrill Lynch had to supply a 75% loan to unload some CDOs last week at 22% of face value), so may well continue to be conservative for some time yet.

Big question is how long central banks can continue printing money and offloading risk to taxpayers.