Recovery of the Housing Market will come Quickly

pickledpink

In the press today there was a very interesting article by the Chief Executive of the MLA............................



Peter Williams, chief executive of the intermediary Mortgage Lenders Association which represents lenders who sell mortgages via brokers, insisted we are not seeing a repeat of the early 1990s property crash.

He said: 'While arrears and possessions are clearly on the up - this is no mortgage meltdown akin to what we saw back in 1991.

'There's no doubt that with rising food and fuel prices, people have less spare cash. But the pain of this slowdow will be short and sharp.

'In the past house prices have been driven down by a lack of demand.

'But house prices have come down rapidly in the last year because mortgage finance has dried up - this is a very different type of adjustment for the UK economy.

'Normally a self-correction in the housing market feels like an elastoplast being peeled off very slowly. What we've seen over the last 12 months is a quick, sharp rip.

'That should mean recovery comes more quickly than it has in past slowdowns.'

:beer:

brit1234

However what he forgets is that housing is more overvalued than ever. Yes we are having big falls but there is as a ratio of price the falls are in line with less overvalued property crashes in the past.

He also doesn't take into count where all the funding is coming from, the banks are broke taking ever increasing loses.

It will take years to recover maybe longer than normal.:beer:

I seem to be reliving the same threads on other sections of this site.
http://forums.moneysavingexpert.com/showthread.html?t=1099757

pickledpink

So you know better than the chief executive do you??? And you don't think he hasn't thought of all those points??!

Why don't you apply for his job then maybe you'll be on £220k a year. :rolleyes:

WTF?_2

pickledpink wrote: »

So you know better than the chief executive do you??? And you don't think he hasn't thought of all those points??!

Why don't you apply for his job then maybe you'll be on £220k a year. :rolleyes:

I know better than to take a piece of propaganda from a chief mortgage lending poobah at face value.

You seem to believe him though, so why not go out and snap up a few bargains to add to your portfolio? :rotfl:

GracieP

!!!!!!? wrote: »

You seem to believe him though, so why not go out and snap up a few bargains to add to your portfolio? :rotfl:

Pickled Pink seems to have her own agenda as far as the housing market is concerned.

mewbie_2

It might be right. After all the man has quoted "arrears and possessions are clearly on the up", so he does know something about the market. I think he means RE possessions.

So maybe instead of ten years for recovery, maybe only five to seven. Long enough to see him out of a job I should think.

tomstickland

'In the past house prices have been driven down by a lack of demand.

So in 1992 loads of people decided that they didn't really want a house after all. Is that what caused the slump?

Gorgeous_George

mewbie wrote: »

...I think he means RE possessions.

As the lender never had possession before, I think he is right. They are taking possession from the borrower.

If it wasn't for the credit crunch, prices would be holding up DESPITE being hideously high. Because of the crunch, prices are falling very fast and most homeowners can live with these falls. With inflation factored in a 10% headline fall is really 15%.

By February 2009 falls will average 25% IMHO (inflation factored in). Whether that will be enough remains to be seen. With lenders raking in far more than is necessary they are making unprecedented profits from mortgage lending and we may see a return to 'normal' sooner than first thought. I think 25% by February 2009 and a further 10% by February 2010 will be enough to see us through the worst of the crunch.

GG

WTF?_2

Gorgeous_George wrote: »

As the lender never had possession before, I think he is right. They are taking possession from the borrower.

If it wasn't for the credit crunch, prices would be holding up DESPITE being hideously high. Because of the crunch, prices are falling very fast and most homeowners can live with these falls. With inflation factored in a 10% headline fall is really 15%.

By February 2009 falls will average 25% IMHO (inflation factored in). Whether that will be enough remains to be seen. With lenders raking in far more than is necessary they are making unprecedented profits from mortgage lending and we may see a return to 'normal' sooner than first thought. I think 25% by February 2009 and a further 10% by February 2010 will be enough to see us through the worst of the crunch.

GG

True - people seemed to be as moronic as ever when it came to taking on huge amounts of debt to buy a house, much as I would have liked the crash to have been about people developing commonsense, it was mostly about numpties not being given the money to buy stupidly overpriced property.

However, even if the crunch eases soon, recession will take over to drive the housing market down.

Plus, recession will squeeze banks' balance sheets even harder. They normally run into trouble as a recession rumbles on, due to debt defaults and increased risk of lending. However this time around they've hit the rocks before the recession has even started, in a time of economic plenty. That doesn't bear well for what's going to happen to their books as the economy goes down the tubes.

ultra10

The Housing "Recovery" will not start quickly .. I am suprised these people even waste there breath on this kind of Crap anymore ... only the dimwits believe them ..

neverdespairgirl

mewbie wrote: »

After all the man has quoted "arrears and possessions are clearly on the up", so he does know something about the market. I think he means RE possessions.

ISTR that the techincal term is in fact "possession action".