Mortgages scarcer than ever

baileysbattlebus

Teabelly is right the land registry don't publish repos in their stats.

Where we are there are less houses coming onto the market - some appear to be selling and others don't.

The one thing I did notice around here, is that quite a few people are having work done to their houses - to me, in our area it seems as if, where last year people would have sold their house and moved to a bigger one now they are doing extensions, having new drives, windows etc. There is lot more activity on that front than I have ever seen around here, I've been here 15 years. There doesn't seem to be any problem releasing equity from your house.

We are also in the position of being able to take early retirement late next year, (got to do it on OH's anniversary - so it's a full year) and had planned on selling the house and downsizing. I was getting quite excited about it all, and was spending a fair bit of time looking at housing and prices in the areas we would like to move to. But I have stopped looking at the moment - it's too depressing. We don't need to move, aren't in any sort of financial difficulty, infact have a lot of equity in the house, more than enough to buy what we want for cash - even if prices fall 50%. Why just be one more house in stagnant market?

So we are one household who has chosen not to put the house on the market right now. My sister (mortgage free) is in a similar position and is not selling her's either.
We went through it all the last time - it's no joy marketing your house when there is hardly anyone buying.

dopester

Realy wrote: »

Sorry must have missed the bit where I said there will be no forced sellers.:rolleyes:
In this market people will not sell if they don't need too.

Realy... I'm not sure if anyone has already explained this, but the sellers, motivated or forced, go on to set the values of similar houses in the road / street / village / area.

People can sit it out if they can or want to, but that won't stop their property crashing in price.

dopester

teabelly wrote: »

There are also plenty of rumours that interest rates are going to come down quite a lot - towards 3 or even 2.5%. With interest rates that low landlords will be filling their boots while everyone else has to look on in dismay as they won't have had time to save up the suddenly necessary 25% deposit.

Western Government are trying to escape the vortex of deflation. Of course there will be interest rate cuts. That doesn't mean it will translate in to lower borrowing costs.

This crash has barely even started. I'm expecting to get my future property at near zero purchase cost with some negotiating to creditors with much distressed property on their books - from a position of financial strength - not from a debt/borrowing position which will be hopeless come a few years time.

baby_boomer

When I started on this board I thought that house prices might go down a bit.

But now the reasons for an ongoing fall are multiplying fast.

Chief among them the cost and availability of loans - which has been a key determinant of house prices.

And then we're definitely going to get unemployment - which wasn't quite so clear six months or more ago.

manhattan

The HPI cheerleaders need to open their eyes and wake up and smell the coffee!

Take your big heads out of the sand, lift your fingers out of your ears and look around at what is happening all around the world!


Prices have already dropped approx 15% in the Uk. Accept that if house prices can increase 300% they can drop again quite easily!

There is no confidence in the housing/financial markets and wont be for a long time. What would happen if there was a major incident like a devastating terrorist attack on top of what is happening at the minute?

People could sell at a loss as the step up the ladder would be cheaper as that property would have also dropped! You can just sit tight but when a house in your street sells at a low price the value of yours drops. And when the next one sells at an even lower price yours DROPS AGAIN!

Realy

dopester wrote: »

Realy... I'm not sure if anyone has already explained this, but the sellers, motivated or forced, go on to set the values of similar houses in the road / street / village / area.

People can sit it out if they can or want to, but that won't stop their property crashing in price.

But no property will realise a value untill it is sold. If they don't put it on the market for 10 years can you say for sure their property will have crashed in price.

Some people will sit it out and sell when they feel their property is back to a value they feel it is worth that could be 5, 10, 20 years time but a house as not crashed untill someone sells it.
The losses are just paper losses, like gains on houses are paper gains untill sold!

Ps that is not true we sold our house in July 08 for £30K more than an identical house (except ours had a conservatory and better presented) that was sold in 07 on the same road.
The lowest price does not set the price, it may for some but more factors are taken in to account, presentation, spec, parking, garden etc.

dopester

Realy wrote: »

But no property will realise a value untill it is sold. If they don't put it on the market for 10 years can you say for sure their property will have crashed in price.

Some people will sit it out and sell when they feel their property is back to a value they feel it is worth that could be 5, 10, 20 years time but a house as not crashed untill someone sells it.
The losses are just paper losses, like gains on houses are paper gains untill sold!

Rofl.

- True. Yes I can be sure. A realistic market value can be placed on property 1, if near identical property 2 across the street has sold for 40% less. I'd call that a significant correction/crash. Are you telling me you think it more logical to believe property 1 still is valued at peak 2007?

- In the meantime the market value will not remain at 2007 peak. It is a crash... just by waiting 20 years for prices to return to 2007 values, doesn't mean in the meantime price haven't crashed !!!

Cmon Realy.. if I bought RBOS shares at £4 in 2007 and they went to £4.50... but now are 76p (approx)..... can I really say the value of my shares haven't crashed if I just wait 5, 10, 15, or 20 years for them to return to £4.50 ???????? Your logic defies all reason.

Realy

dopester wrote: »

Rofl.

- True. Yes I can be sure. A realistic market value can be placed on property 1, if near identical property 2 across the street has sold for 40% less. I'd call that a significant correction/crash. Are you telling me you think it more logical to believe property 1 still is valued at peak 2007?

- In the meantime the market value will not remain at 2007 peak. It is a crash... just by waiting 20 years for prices to return to 2007 values, doesn't mean in the meantime price haven't crashed !!!

Cmon Realy.. if I bought RBOS shares at £4 in 2007 and they went to £4.50... but now are 76p (approx)..... can I really say the value of my shares haven't crashed if I just wait 5, 10, 15, or 20 years for them to return to £4.50 ???????? Your logic defies all reason.

Come off it somone who purchased a house 10 years ago has there property crashed?
Yes if they sold it this year not last year it would sell for less. As it crashed? no!
People can't argue gains are only paper gains then falls are not paper falls when it suits them.
A property as only fallen in price in nominal terms if it sells for less than it was purchased for the same for rises!
Why is that such a bad point for you? Prices are falling but for most who do not sell or have to sell prices crashing will not effect them is that offensive?
It is the logic of buying and selling.
If you buy a house at the bottom of the market and sale prices increase by 50% over 5 years has your house increased by 50% or as it only increased when you sell it?
Houses and shares are compleatly different things for one you would buy shares as an investment not shelter, you would not offload a house just because prices are droping or rising to realise a loss or a gain.

dopester

Realy wrote: »

Houses and shares are compleatly different things for one you would buy shares as an investment not shelter, you would not offload a house just because prices are droping or rising to realise a loss or a gain.

Some people did just that. The STRs who could see that house prices had become hugely over-valued in to big bubble territory.

And some people are trying to sell now as the indicators are telling them prices and values have much further to fall. So in effect, they are treating houses/property like some form of investment. Then rent, then buy when they feel it is right to, preferably at a low-point that made it significantly worthwhile to them.

You do make some fair points though. Yes; if their property has -12%+ crash in 1 year I would say it is a crash from a 2007 peak.

That is not to say they may still have equity gain from buying 10 years ago - providing they've not MEW-ed or leveraged themselves in to BTL.

And there is opportunity costs. Even selling now at -30% might see you release a higher price than in 3 to 4 years. And then buy in again at new lows.

Although you are right - if you are treating a property solely as a home, and make your repayments, or have paid it off.... it is neither here nor there, although some who bought more recently may have erosion of earned deposit/capital and negative equity that could have been avoided if they didn't buy near peaks.

Yet I'd rather buy low though (at least at some level of historic affordability measure) , because stumping up loads of hard-earned capital, or taking a giant mortgage, does have a real world effect on a person's finances when prices continue to fall. A £250,000 mortgage or a £75,000 mortgage..... hmmmm difficult to decide.

Realy

dopester wrote: »

Some people did just that. The STRs who could see that house prices had become hugely over-valued in to big bubble territory.

And some people are trying to sell now as the indicators are telling them prices and values have much further to fall. So in effect, they are treating houses/property like some form of investment. Then rent, then buy when they feel it is right to, preferably at a low-point that made it significantly worthwhile to them.

You do make some fair points though. Yes; if their property has -12%+ crash in 1 year I would say it is a crash from a 2007 peak.

That is not to say they may still have equity gain from buying 10 years ago - providing they've not MEW-ed or leveraged themselves in to BTL.

And there is opportunity costs. Even selling now at -30% might see you release a higher price than in 3 to 4 years. And then buy in again at new lows.

Although you are right - if you are treating a property solely as a home, and make your repayments, or have paid it off.... it is neither here nor there, although some who bought more recently may have erosion of earned deposit/capital and negative equity that could have been avoided if they didn't buy near peaks.

Yet I'd rather buy low though (at least at some level of historic affordability measure) , because stumping up loads of hard-earned capital, or taking a giant mortgage, does have a real world effect on a person's finances when prices continue to fall. A £250,000 mortgage or a £75,000 mortgage..... hmmmm difficult to decide.

Cheers and I don't blame you.
But I think a lot on here do not look as home owners as home owners more as a poor investers (a lot of owners are not trying to realise a value just paying for and living in a house).
I am sure when you find your house and in 20Y time you like your house, you will not be selling it in the next crash unless you need to.;)
PS and you won't care what it is going down by either unless you are in NE and your job was looking dodgy.