50% drops by 2011

novazombie

brit1234 wrote: »

Oh , can't we change it to 50% drops by 2009. Please

Some places in London will be down by 50% by next year like that flat on the other thread already down from 300K to 150K. But it will take a bit longer for widespread 50% drops.

But all the talk of 70 or 80% Japanese style drops by 2011 just isn't going to happen, it will take years for that much of a drop. And then only in the city.

Everyone talks about how Japan dropped 80% but that was mainly in Tokyo, the rest of the country took longer.

Yes London has further to fall so obviously the main percentage falls will be there, but only certain areas.

But overall Id say we have to wait a long time. It wont all just happen in months it will be gradual every year and for longer than most people think.

It wont be all over by 2011, yes they will be down 50% by then but it will be a long time before any increase, only further falls.

Yoshua

RDB wrote: »

This thread is called 50% drops by 2011 so does this mean House price and rents?

I think rents will be slower to drop than house prices. But yes 50% down all the same.

There is an argument that says about all these sell to let people wanting to rent will keep the prices up. But think about it there are only the same number of people wanting to live somewhere and the same amount of places to live.

Unless someone sells a house and the new owners keep it empty all the time then yes this argument will be true rents will stay high. But what fool would by a house and leave it empty.

Sorry but the supply and demand facts show that rents will go down as well as property prices.

Also with the recession causing many to move back in with their parents or downsize to a smaller house and the bigger houses are being split into even more smaller buy to lets bedsits and studios. The supply is over flowing and the demand for anything not very cheap is getting less as all these companies lay off their workers.

Yes rents will drop 50% or more but it will follow property prices dropping the same amount.

RDB

I know it's a clich! and I know it'll get me accused of fear-mongering, but we really do seem to be teetering on the edge of some kind of financial meltdown. Every day, a new set of rumours flood the market about another bank facing collapse.
So it's little wonder that everyone is getting out of property, before they lose most of their money.
Mortgage rates are going to be very expensive and almost impossible to get in the first place.
Every year more and more fixed term mortgages will be coming to an end, people will be shocked to death when they find they cant get another mortgage or if they can it will cost so much they have to work all hours under the sun and still haven't got enough left to buy food.
Even for those that get reposessed they are still in debt for maybe the rest of their life because the banks will chase them for the difference between what they owe and the tiny amount their house was auctioned off for.
If you still have money in property cut your losses now before its too late.

brit1234

In the last crash prices fell 5% a year for 4 years, We are almost there in 6 months, so this is definately new terroritry.:eek:

dopester

RDB wrote: »

Do you really think that if prices fall by about 50% rents will stay the same or even go up as Steve Todd tries to say?

If you think that you dont understand the word recession.

brit1234 wrote: »

Every one knows rents are falling in London anyway and the recession hasn't really started. So with both falling rents as well as prices and higher minimum deposits (25%) its not looking like a bail out from landlords.

neverdespairgirl wrote: »

Here in WC1, rents are the same in £ terms, or slightly less, than a year ago. So down in real terms.

Even the Queen of Denial (not Cleopatra), has finally realised that renting is becoming the intelligent option, and how landlords are under pressure.

She suspects that a few neighbours see her as the street's Becky Sharp, living beyond her means in the way of the Vanity Fair heroine, but they do not know the size of the discount she negotiated on the rent. The chance to live above your station is increasingly secured by shopping around. Ingram reports that tenants are asking for reductions of 10 per cent or more.

Jo Eccles, of Sourcing Property, says that not so long ago 80 per cent of her clients were looking to buy. Now the same number are looking to rent, having done their sums. She says: “Renting is currently cheaper. The typical mortgage rate is 6.25 per cent; the typical rental yield - the rent as a percentage of the property value - is 4.5 per cent.”

There are now predictions that the British may aspire much less in future to become owner-occupiers.

Landlords now have another gripe to add to higher borrowing costs: tenants determined to use their new bargaining power, whether they are looking for a flat for £250 a week or £2,500. These difficult customers are turning up their noses if homes are not beautifully presented. The greater choice of properties for rent is putting pressure on London landlords to put on the Marigolds and clean, clean, clean - and redecorate. New data from Hamptons, the estate agent, suggest that landlords elsewhere will also have to familiarise themselves with the latest Dulux shades and the relative merits of Cif and Flash cleaning products.

Get a cleaning/scrubbing and updating your properties please steveyboy... with unemployment rising steeply each month and our incomes under pressure and such an increasing choice of property to choose from and falling rents and landlords in competition for tenants... people who can still afford to pay deserve top notch standards for the money.

Rents are now starting to fall in the Home Counties - even in locations within an easy commute from London - and Hamptons suspects that these patterns of activity will “ripple out”, rapidly turning into a nationwide trend.

http://property.timesonline.co.uk/tol/life_and_style/property/investment/article4954616.ece

IveSeenTheLight

ad9898 wrote: »

Tee Hee, you think a house bought in May 2005 at 165k is now worth 200k :rotfl:, is Fergus Wilson a relative of yours by any chance.

The land of the cuckoo.

Ok, the £200,000 I quoted was a rough estimate, however.......

Try looking at facts.
I specifically mentioned that the property was in Aberdeen
If you look at the following link, you can work out the HPI each quarter and in fact it theoretically would be worth far more than that.
http://www.hbosplc.com/economy/includes/25_07_08CountyHistoricData.xls

Checking nethouseprices, I see a similar house, 2 doors down from the one for rent that sold in Aug 2007 for £260,000

Going back to HBOS link, between June 2007 and June 2008, the prices rose 6.5%, although nationwide report a 6.99% drop YoY for Aberdeen. Regardless a 7% drop from £260,000 is still higher than my £200,000 estimate.

So definately not cuckoo. It seems I under estimated

manchestermike_2

RDB wrote: »

I know it's a clich! and I know it'll get me accused of fear-mongering, but we really do seem to be teetering on the edge of some kind of financial meltdown. Every day, a new set of rumours flood the market about another bank facing collapse.
So it's little wonder that everyone is getting out of property, before they lose most of their money.
Mortgage rates are going to be very expensive and almost impossible to get in the first place.
Every year more and more fixed term mortgages will be coming to an end, people will be shocked to death when they find they cant get another mortgage or if they can it will cost so much they have to work all hours under the sun and still haven't got enough left to buy food.
Even for those that get reposessed they are still in debt for maybe the rest of their life because the banks will chase them for the difference between what they owe and the tiny amount their house was auctioned off for.
If you still have money in property cut your losses now before its too late.

Jesus Christ... run for the hills.

I've not been on this forum long, but let me guess. You're in the 20-30 age range looking to buy your first property?

All the doom/fear/scaremongering seems to be coming from the direction of this demographic.

50% falls, 70% falls... maybe in certain areas where they have been over-run with high (read over) priced "designer" apartments... but overall, not a chance. Of course the average price will fall, but even in the most overpriced areas expect no more than 35%

Dithering_Dad

manchestermike wrote: »

Jesus Christ... run for the hills.

I've not been on this forum long, but let me guess. You're in the 20-30 age range looking to buy your first property?

All the doom/fear/scaremongering seems to be coming from the direction of this demographic.

50% falls, 70% falls... maybe in certain areas where they have been over-run with high (read over) priced "designer" apartments... but overall, not a chance. Of course the average price will fall, but even in the most overpriced areas expect no more than 35%

Quite. The older demographic have been through these down turns before. They hurt but it's not armageddon. They'll learn

I still wish someone would tell me why when my house was tripling in value, it wasn't 'real money' but how it's going to half in value (:rolleyes:) it is suddenly 'real money' and I should sell before I lose it all?

chucky

Yoshua wrote: »

You would probably call where I live in London less desirable, because its got one of the biggest council estates - Burnt Oak.

As far as I can see most of it has been bought on a subsidy by the council tenants. If they had been renting for years they all bought their house off the council very cheap even in the peak years.

Also everyone who lives here is used to paying council rent also very cheap and expect a lot for their rent (repairs, maintenance etc).

So why would someone rent one of these ex council houses off someone privately unless its comparable to what council tenants are paying?

Its the same for all the council estates all over and its affecting rents and house price in surrounding areas as well (N,London) no doubt about it rents are in a downward trend. Maybe rents dropping will not be as drastic as house prices dropping for the reasons that all these repo`s familys will need somewhere to live, but thats what all these new Government housing associations are for.

when i said less desirable, i don't want it to sound that one area was better than another in a human way, more in the sense of closer to the centre of town and amenities. - this is what people really are paying for.

as rents drop in the outer areas of London, this will filter closer to town as people don't mind living that extra 10 minutes away for X amount less of rent. landlords will have to drop.

in saying that the central areas of London will always have more demand that will maintain these rental prices a bit more.

lostinrates

Dithering_Dad wrote: »

Quite. The older demographic have been through these down turns before. They hurt but it's not armageddon. They'll learn

as regards HPs maybe, but otherwise this view is not right IMO. Was being the good wifey last night at a do. DD's last boss from Italy was there and, he and I feeling like old chums now, shuffled off for a chat. He's not old-but older than me, may be about 50, and he's highly respected by his peers (He's in the top 500 US lawyers) and was in a different corporate role before law. He told me he'd NEVER seen anything like this. On a broader scale the thing that surprised me is older, experienced people directly related to the economy and/or coporate law who were openly saying or agreeing thing were pretty darn bad.