House prices 'see first double-digit fall'

WTF?_2

trulysaintly wrote: »

Sorry the mortgages are out there for the average person who doesn't have a bad credit history, and a deposit of 5% or more.

People aren't bothering to look because they believe what they they are told in the press....

There's just a rush to find something to blame for the collapse in the housing market - anything other than the truth that prices are simply too high.

True, you can't get crazy multiples of your salary with no deposit any more - but the fact that you could was the aberration, not the fact that you now can't. People seem to have very quickly come around to the idea that cheap and easy to obtain credit is somehow normal and their 'right'. They'll have to readjust to reality.

Anyway, the solution to the problems is that prices come down to a reasonable level. The longer sellers hold out for prices based on the past ability of over-enthusiastic buyers to lay their hands on silly amounts of borrowed money, the worse it's going to be for them in the end. There is a downward momentum developing in prices so anyone who wants to sell needs to do so ASAP. Unless of course they really can hold out until 2017 or thereabouts.

However, I wonder how many people are going to be able to service debt repayments on the loan taken to buy the asset - let alone want to do so as they see the price of the asset drop.

trulysaintly

obsessed_saver wrote: »

Really? At what rates?

I'm not saying that the mortgages has completely disappeared, but saying it's very hard to get one. Either because of stricter lending criteria, or just being more expensive that people can't afford the interest rate at the current housing price levels.

So, it's because of affordability for buyers that volumes are down, not because sellers are holding out for better prices.

It depends on the individual's circumstances, but you could be looking at 2 yr Fixed Rates of 5.75% for people with 20% deposit, or 20% equity in their current property....(Leeds BS)..

Most lenders operate on an affordability model anyway, so it is no longer 5x Income that is used.

BTW, lenders make their decision to lend also on what the applicant's are already able to maintain.

The problem is confidence - people make adjustments to the luxuries in life if their mortgage payments go higher, admittedly there is a limit to this, but my argument is that the press have made this problem even worse.

Club together the Government and the Press - who needs enemies? :mad:

thegibdog

Perhaps I am over simplifying things, but isn't it just that people are seeing sense? The lack of "confidence" is a good thing surely, it means a bit of caution has come into the equation. The problem has arisen from the fact it took so long.

Paul_N_4

thegibdog wrote: »

Perhaps I am over simplifying things, but isn't it just that people are seeing sense? The lack of "confidence" is a good thing surely, it means a bit of caution has come into the equation. The problem has arisen from the fact it took so long.

Unless you're a mortgage broker

Completely agree with you. It amazes me people blame the press for falling prices and the lack of confidence. Perhaps the same people were saying the same thing when the press encouraged over-confidence in the market, or not!

Dithering_Dad

brit1234 wrote: »

Spark1 wrote:

Only problem is houses near me are just being withdrawn from the market, sellers who dont need to sell wont drop their prices

They will eventually. They just have to realise how long this downturn will last, its not a short term blip and its only just got started.

People also have to realise that the more property comes down it makes it cheaper for people to move to bigger houses.

So in reality property falls are good for most.

Perhaps the thought of an impending recession is forcing sellers to rethink their plans to go up the ladder. Usually in times of economic strife people 'batten down the hatches' and reduce their non-essential spending, house buying being one of them.

With all the talk of redundancies, it wouldn't surprise me if people think that the combination of costs from estate agents, solicitors, removal companies, stamp duty, mortage redemption, increased mortgage mortgage costs, increased council tax, increased bills are probably not going to be economically viable.

I'd imagine this would be the case on all rungs of the ladder, even down to FTB properties, where householders are too fearful of losing their jobs to risk increasing their outgoings, even if the next rung up is tantelisingly close.

Ironic that a house price crash means that houses are cheaper, but fewer are available, especially as the builders stop building. Once the economy picks up perhaps this will change and people will start moving again?

Paul_N_4

Dithering_Dad wrote: »

Perhaps the thought of an impending recession is forcing sellers to rethink their plans to go up the ladder. Usually in times of economic strife people 'batten down the hatches' and reduce their non-essential spending, house buying being one of them.

With all the talk of redundancies, it wouldn't surprise me if people think that the combination of costs from estate agents, solicitors, removal companies, stamp duty, mortage redemption, increased mortgage mortgage costs, increased council tax, increased bills are probably not going to be economically viable.

I'd imagine this would be the case on all rungs of the ladder, even down to FTB properties, where householders are too fearful of losing their jobs to risk increasing their outgoings, even if the next rung up is tantelisingly close.

Ironic that a house price crash means that houses are cheaper, but fewer are available, especially as the builders stop building. Once the economy picks up perhaps this will change and people will start moving again?

Alternatively the number of sellers to buyers has been increasing and now stands at 15 sellers for every buyer as opposed to the average of 7 sellers to every buyer:
http://www.rightmove.co.uk/pdf/p/hpi/HousePriceIndex23rdJune2008.pdf

So for those that can afford to buy, and can get finance, there is in fact more properties available.

trulysaintly

Dithering_Dad wrote: »

Perhaps the thought of an impending recession is forcing sellers to rethink their plans to go up the ladder. Usually in times of economic strife people 'batten down the hatches' and reduce their non-essential spending, house buying being one of them.

With all the talk of redundancies, it wouldn't surprise me if people think that the combination of costs from estate agents, solicitors, removal companies, stamp duty, mortage redemption, increased mortgage mortgage costs, increased council tax, increased bills are probably not going to be economically viable.

I'd imagine this would be the case on all rungs of the ladder, even down to FTB properties, where householders are too fearful of losing their jobs to risk increasing their outgoings, even if the next rung up is tantelisingly close.

Ironic that a house price crash means that houses are cheaper, but fewer are available, especially as the builders stop building. Once the economy picks up perhaps this will change and people will start moving again?

The funniest thing is (in my own warped sense of humour) now is the ideal time to buy - because you have hit the nail on the head.

Most Property Cycles are 5 years or so. We have just been experiencing the downturn, and as you may have seen, 25% rises in property prices have been predicted come 2012.

So, it's just a natural downturn, not a crash - market correction is the correct term.

Sorry that doesn't fit into the view of some on here that think it's some 'wishywashy' realisation for potential buyers out there.

A lot of people will be making good money over the next 3 years over this situation - the people who miss out will be the ones waiting for prices to drop further - WAKE UP CALL - even Barclays (Jon Varley) has stated that the economic situation has reached a plateau......

The ideal way to deal with it is to go with your gut instinct, as Caroline Flint proved on GMTV this morning, you don't have to know what you are talking about if you know the right people.....

trulysaintly

Paul_N wrote: »

Unless you're a mortgage broker

Completely agree with you. It amazes me people blame the press for falling prices and the lack of confidence. Perhaps the same people were saying the same thing when the press encouraged over-confidence in the market, or not!

Aw, thanks.....

So the Panorama and Tonight weekly specials on the housing market don't have an impact on consumer confidence?

Or the daily 'Thousands can't get a Mortgage' headlines that keep Daily Mail readers in their self-imposed darkened room?

Bad news sells papers, prosperity doesn't.

THAT'S why confidence in the market is key.

sympatex

trulysaintly wrote: »

The funniest thing is (in my own warped sense of humour) now is the ideal time to buy - because you have hit the nail on the head.

Most Property Cycles are 5 years or so. We have just been experiencing the downturn, and as you may have seen, 25% rises in property prices have been predicted come 2012.

I'm not convinced TS. There are a great number of houses still at the same asking prices now that they were selling for last summer, the "recognised peak". So it's no better to buy now than it was last summer in that respect.( i know there is a difference between asking and selling price!)

Are property cycles 5 years? The recent boom has been over 10years. the last fall was happening over at least 3 years, 89-92? whatever it may be the process rise and falls historically have taken longer than 5 years. from peak, fall back to original peak.

Anything could happen we're all speculating but there is nothing to suggest affordability will return any time soon (say 12months) as lending to people with blemished/no credit history has been removed.

Paul_N_4

trulysaintly wrote: »

The funniest thing is (in my own warped sense of humour) now is the ideal time to buy - because you have hit the nail on the head.

Most Property Cycles are 5 years or so. We have just been experiencing the downturn,

Can you enlighten us to this 5 year cycle? Would appreciate some graphs or links. I've heard of the 18 year cycle (house prices rise, fall, and then rise back to where they started again over 18 years. But I've never heard of the 5 year cycle. Must be a new one invented especially for this crash.

and as you may have seen, 25% rises in property prices have been predicted come 2012.

The shower that made that prediction also made a prediction of +40% by 2012 in August 2007. They couldn't even predict what was happening within a year let alone 5 years from now. Funny that they also stand quite alone with their over optimistic prediction.

So, it's just a natural downturn, not a crash - market correction is the correct term.

The 90s was called a crash and this is faster. But I don't think many people really care what it's called.

Sorry that doesn't fit into the view of some on here that think it's some 'wishywashy' realisation for potential buyers out there.

A lot of people will be making good money over the next 3 years over this situation - the people who miss out will be the ones waiting for prices to drop further - WAKE UP CALL - even Barclays (Jon Varley) has stated that the economic situation has reached a plateau......

And again, he is at odds with his peers. You think Varley might have an interest in keeping his share prices high? Funny what times have become when we believe what bank managers tell us.

The ideal way to deal with it is to go with your gut instinct, as Caroline Flint proved on GMTV this morning, you don't have to know what you are talking about if you know the right people.....