'50% drops'

Dithering_Dad

Max_Headroom wrote: »

DD, you're spot on, however there is an argument that ALL house prices have been double what they should be recently, driven there by loose lending, masses of credit and sentiment (buy regardless of price, it'll be more next month).

Hi Max, you may be right; certain sectors of the housing market in certain locations within the UK could see 50% losses within the trough of the crash but we're certainly not there yet.

Max_Headroom wrote: »

All those things have now gone so house prices will return to their "real" value, based on genuine affordibility.

I hope so. I also hope that the government and UK public will have learned from this debacle, but I doubt it. They didn't learn last time, nor the time before .

GDB2222

StevieJ wrote: »

So you are saying that the lenders want to reduce the value of the security on their current loan book by 70% Mmmm.

I don't see that the lenders have much say in that.

Heyman_2

macaque wrote: »

You assess reality from where you stand. If someone had told you in 1990 that a 2 up 2 down in a dull midland town would fetch £200k in 2007, you would have called for an ambulance.

BTLs would only go through the roof if rents stay at current levels. I don't see how current rents can be sustained.

I disagree with you on both counts.

You first point just ignores 17 years worth of inflation and economic evolution. I could make the same example about a loaf of bread or a weekly shop. Hell - we could go back even further and say that no-one in 1960 would believe that a house such as the one you mentioned would go for 200K (more like 2K!).

Rents will be sustained whilst there are people willing to pay them and there are landlords (or ladies) who have big enough mortgages to service. Given the hysteria on here about nobody buying etc, I'd say the rental market is in for a bit of boom of its own.

dopester

Heyman wrote: »

Given the hysteria on here about nobody buying etc, I'd say the rental market is in for a bit of boom of its own.

Yes, with unemployment shooting up, firms going under nearly every day, adults moving back to their parents' (boomerangs), lenders on life-support all over, deflation setting in, and even the king and queen of BTL beginning to sell with quite some worry on their minds.

Boom boom dead for your rents.

howler_2

Dithering_Dad wrote: »

Hi Max, you may be right; certain sectors of the housing market in certain locations within the UK could see 50% losses within the trough of the crash but we're certainly not there yet.
quote]

Here we go again. We are there, certain locations have already seen 50% losses - in fact more than 50%. Specifically flats in Manchester city centre - look at sale prices at auctions compared to sale prices a few years ago.

Losses are already over 50%

Heyman_2

dopester wrote: »

Yes, with unemployment shooting up, firms going under nearly every day, adults moving back to their parents' (boomerangs), lenders on life-support all over, deflation setting in, and even the king and queen of BTL beginning to sell with quite some worry on their minds.

Boom boom dead for your rents.

Easy to paint such a bleak picture from that set of vague sentiments.

From the US - Builder returns to growing rental market
From the UK - Reports of Buy to Let demise untrue

Heyman_2

howler wrote: »

Here we go again. We are there, certain locations have already seen 50% losses - in fact more than 50%. Specifically flats in Manchester city centre - look at sale prices at auctions compared to sale prices a few years ago.

Losses are already over 50%

Personally, I don't disagree with you - city centre new-build repo flats at auction were always going to take a sizeable hit, being ridiculously overpriced as they were when bought from new.

The question is more if we will see that level of drop on a national scale on the open market, which is an altogether different kettle of fish.

StevieJ

macaque wrote: »

Yup. And you don't need to be Einstein to work out why.

Go on explain.

Dithering_Dad

Heyman wrote: »

Personally, I don't disagree with you - city centre new-build repo flats at auction were always going to take a sizeable hit, being ridiculously overpriced as they were when bought from new.

The question is more if we will see that level of drop on a national scale on the open market, which is an altogether different kettle of fish.

Couldn't have said it better.

Max_Headroom_3

Dithering_Dad wrote: »

Hi Max, you may be right; certain sectors of the housing market in certain locations within the UK could see 50% losses within the trough of the crash but we're certainly not there yet.

Agree with that. Long way to go yet, we're just scratching the surface at the moment and will be until sellers are forced to re-calibrate their expectations. That will take a while, no one wants to aknowledge that their "£200K" house will achieve no where near that in reality.

I hope so. I also hope that the government and UK public will have learned from this debacle, but I doubt it. They didn't learn last time, nor the time before .

Agree with that too I'm afraid!