House prices 'see first double-digit fall'

dopester

!!!!!!? wrote: »

From what I hear there are plenty of expats desperate to sell property and move back to the UK. There's no need to fixate on getting a new property straight from a developer. Take a look at auctions or look for some 'expat in Spain' forums and see what the score is.

Last time we went to Spain, and a nice part too, we winged the villa almost free for the week.

Unless you've got very good reasons to buy I prefer not be tied down to a certain location each holiday time, and thrash out a good deal each year.

trulysaintly

carolt wrote: »

Your post contains a number of statements that I think point the way to the solutions:

"I have 3 sisters with kids at home in their twenties and we all agreed that there is no chance they will ever afford to buy a house." Assuming that they work (they appear to have money to spend), there is clearly something very wrong with house prices still if FTB's cannot afford to buy. As FTB's are required to form the bottom of chains (in the absence of landlords, who have largely stopped buying too), then prices are going to have to fall to levels where ordinary young people like these can afford to buy again. Or where investors feel yields stack up. The fact that is not the case yet just shows how much further prices are going to have to fall. Simple as.

So, if your theory is correct, fitting in with lending practices for FTB's, property prices will have to fall back to 3 or 3.5 x income. Seeing as the average FTB is earning, let's say, £20k, that would give them a mortgage amount of £70,000.

And that's assuming they don't have any credit in place, which is unlikely these days for most 18-25 year olds who all want brand new cars and credit cards......

£70k mortgage would get them a property worth around £74k - assuming they have a 5% deposit. :rotfl: Yes, that's going to get them a place that they really want on the property ladder.......

What you are proposing is property prices to fall another £50k on most properties - I'm sure that fits your own personal agenda but realistically, can't see it happening.

If you can provide evidence, not speculation from interested parties in the papers, that this is likely to happen, then fine.

Give it 9 months and we will be seeing recovery in the mortgage markets - what will help will be less scaremongering which allows people to make reasoned decisions on their own futures - unfortunately too many are being led by unresearched opinion in the press and media.

FCS, on the BBC last week they had Robert Peston, their 'supposed' Business Editor, trying to explain the mortgage market that NR were involved in - he didn't have a clue about explaining their 'Together' range (125%) - and these are the people who people ACTUALLY listen to when deciding what to do in their lives.

Right, rant over. It's about time in this country that people thought for themselves! :mad:

Cannon_Fodder

US home foreclosures increase 55%

More than 272,000 people in the US received a foreclosure notice in July, a rise of 55% on a year earlier, according to analysts Realtytrac.
Florida and California had the highest rate of foreclosures, figures showed.
In a further indication of the severe problems affecting the US housing market, more than 77,000 homes were repossessed in July.
As a result of this increase, 17% of all homes for sale in the US are repossessed properties.


I thought we were on the upturn?
I thought the crunch was ending?
I thought repossessions don't matter, thats why they are stripped out of stats as being counter-indicative of the true state of the market - but 17%, ouch!
I thought the US was coming out of it, and we were lagging a couple of
years behind.


If the US hasn't finished yet, then we haven't really got started, have we?


But EAs and MAs keep prattling on about minor blip, correction, slowdown, upturn, recovery,....blah, blah.


maybe there will be a minor miracle, and in three months it'll level off at the bottom and then slowly go back upwards. Iran could cease to exist and cause Oil to go through the floor, so allowing interest rates down as inflation disappeared, or some such unforeseeable event...

It would be a cast-iron muppet who could not acknowledge that such a possibility even exists. But that cuts both ways.

The worst case scenario downwards, COULD be reality. It is "possible".

Somewhere in-between is more likely.


"£70k mortgage would get them a property worth around £74k - assuming they have a 5% deposit. :rotfl: Yes, that's going to get them a place that they really want on the property ladder......."

- you've just made the opposite argument, perfectly...PRECISELY because no-one would want to but a property that is £74K, at current/recent prices, because of what it is or where it must be, to be that price, in todays stupid market, is why no-one is buying and waiting for the inevitable correction/slowdown/crash/collapse...now that it has finally arrived, overdue, but necessary.


"Give it 9 months and we will be seeing recovery in the mortgage markets" - but a couple of posts earlier it was all "upturn", "ending", now you want us to wait 9 months...

"less scaremongering" - no-one with a vested interest was playing down the bubble as it expanded over the previous 10 years, why should you avoid the same on the downward part of the cycle?

- all the property shows that influenced people, all the BTLers jumping on Sarah Beeny's bandwagon (ooer), all that was just a figment of our imaginations was it? you campaigned against such inappropriate stoking of the fires, did you?

"what goes around comes around"
"whats sauce for the goose is sauce for the gander"
"like it and lump it"


etc!

neverdespairgirl

trulysaintly wrote: »

What you are proposing is property prices to fall another £50k on most properties - I'm sure that fits your own personal agenda but realistically, can't see it happening.

WHy can't you see it happening? Prices were that level before, why should they not return whence they came?

trulysaintly

neverdespairgirl wrote: »

WHy can't you see it happening? Prices were that level before, why should they not return whence they came?

Because it's not rocket science.

As everyone on here has an issue with anyone linked to Mortgages (whether they have one, would like one, or arrange them?) - I'll make this short and sweet because I'm fed up of Cyber geeks on here.

Prices will not drop that low because for that to happen - property sales would have to go through.

Why won't this happen? Because of existing mortgage commitments - many in the country, once their 'equity' has been eroded....

WON'T BE ABLE TO MOVE HOME.....

Therefore, they won't go on the market, which will reduce supply and push prices, slowly but surely, back up.

Then we are back to Supply and Demand, as before.

Christ, I worry about some of you people, unless it fits your own agenda you are too short sighted to see the other possibilities.

If someone buys now, when it is categoric that prices have dropped, they WILL get a bargain.

Wait too long and you may miss the boat.

Mind you would keep most on here happy because it would be something else to moan about.

Generali

trulysaintly wrote: »

Because it's not rocket science.

As everyone on here has an issue with anyone linked to Mortgages (whether they have one, would like one, or arrange them?) - I'll make this short and sweet because I'm fed up of Cyber geeks on here.

Prices will not drop that low because for that to happen - property sales would have to go through.

Why won't this happen? Because of existing mortgage commitments - many in the country, once their 'equity' has been eroded....

WON'T BE ABLE TO MOVE HOME.....

Therefore, they won't go on the market, which will reduce supply and push prices, slowly but surely, back up.

Then we are back to Supply and Demand, as before.

Christ, I worry about some of you people, unless it fits your own agenda you are too short sighted to see the other possibilities.

If someone buys now, when it is categoric that prices have dropped, they WILL get a bargain.

Wait too long and you may miss the boat.

Mind you would keep most on here happy because it would be something else to moan about.

What you say is right in so far as supply will fall as prices do. That is normal in most markets. Longer term, people still want or need to move and many people that aren't in ngative equity will do so.

They will be able to set lower prices if they are willing to buy and sell at those lower prices. Not everyone has a 90%+ mortgage. Not even most people do.

Unless most house prices fall by 70% or even more, the vast majority won't have negative equity.

dopester

trulysaintly wrote: »

What you are proposing is property prices to fall another £50k on most properties - I'm sure that fits your own personal agenda but realistically, can't see it happening.

For an adviser who in so many posts is blaming media "scare stories" for the downturn, you seem one very scary adviser.

Time and time again you blame the media, whilst showing no understanding whatsoever about the complicated economic variables in the mix which is going to make this a serious crash and bring carnage to the economies of many countries. Your position about it all is utter denial.

And time and time again you say you "can't realistically see it happening". I suggest the near future (1 year to 4 years) is going to melt your mind with the crash and the economic fall-out.

neverdespairgirl

trulysaintly wrote: »

Therefore, they won't go on the market, which will reduce supply and push prices, slowly but surely, back up.

Then we are back to Supply and Demand, as before.

Christ, I worry about some of you people, unless it fits your own agenda you are too short sighted to see the other possibilities.

I am not sure that is right. Certainly, there will be people who don't or can't sell. But that was also true in the 1990s, many people were trapped by negative equity. It didn't stop the market falling, nonetheless. Prices are set at the margins, by those who can and will sell.

In addition, at the moment, although supply has shrunk, demand has shrunk far faster. The impact of lower mortgage lending is crucial.

rizla01

trulysaintly wrote: »

Wait too long and you may miss the boat.

It's refreshing to get an opposing view on here, to the majority of doom-mongers that seem to prevail on this thread.

No way of knowing if EITHER are correct but a different train of thought is very welcome for a debate.

I Do know that the better properties will rarely be bought for a song and it is the rubbish that struggling people, end up with, and it is the rubbish that sells for the lower figures in a downturn of the market and this does give a somwhat distorted picture of what ALL of the market is doing at any one time.

THIS in part, i think, is why developers hang on to their properties in the hope of a return to better values but if it goes on for too long, then they will have to admit defeat, like the rest of us, and sell for the lower amounts -- but for them (Developers) it becomes a tax loss spread over the number of years since the build, so not really a problem.

sympatex

I'd totally agree with Rizla on this its good to have TS's point of view. In 6months he could be proved right... or it could be a bull trap! *laps up some more bear food.

We tried to buy a house in April but got cold feet and pulled out, it was a lovely house but if the worst happened and we had to stay there for 10years+ in NE it would have impacted on our plans for our future! After we pulled out it went under offer/sold within 2 weeks. Other houses that were available then are still about now with no offers on them (5months on).

the dross thats about will be forced lower but i've only seen what appear quality houses come down in price significantly (ie 30k off asking, not sold price!)