Nationwide Chief: House prices to fall through 2009 into 2010

StevieJ

Paul_N wrote: »

Yep. Just as recession tightens its grip and unemployment climbs, house prices will start going up.

Beale said "house prices to continue falling into next year and possibly 2010". That would suggest falling house prices right up to the end of next year at least, not springtime. Still, not a bad report considering Nationwide are quite biased in the property game.

!!!!!! do you get at least from out of that statement?

WTF?_2

HammersFan wrote: »

Yep, I agree. Some really fantastically low mortgage rate deals coming over the next few months. That will be the time to buy on a long-term fix under 5% (perhaps quite a long way under that). Happy days

Time to buy will be when rates are low and prices have bottomed.

Always better to simply borrow less if you can - this is a loan that will typically run over 20 years incurring interest all that time.

Should also be interesting to see how longer term fix pricing goes. Anything under 5% fixed for 10 years would be a gift. But will the banks offer it if inflation is likely down the line?

wolfman

HammersFan wrote: »

Yep, I agree. Some really fantastically low mortgage rate deals coming over the next few months. That will be the time to buy on a long-term fix under 5% (perhaps quite a long way under that). Happy days

I agree, that went through my mind. But still I'm not going to pay for something, more than I think it's worth despite the great mortgage rates. Especially as it looks likely that interest rates will fall again anyway.

Plus with recession kicking in, I think I'm gonna hold on to my money for now, play it safe.

For £180k I still can't buy much at all, even in areas of South London that are less desirable. For £200k, I'd like a reasonable 2 bed flat. If prices don't drop that low, I'll just keep renting and look abroad sometime in the future.

HammersFan

!!!!!!? wrote: »

Time to buy will be when rates are low and prices have bottomed.

Always better to simply borrow less if you can - this is a loan that will typically run over 20 years incurring interest all that time.

Should also be interesting to see how longer term fix pricing goes. Anything under 5% fixed for 10 years would be a gift. But will the banks offer it if inflation is likely down the line?

Getting both right would be down to luck as much as anything else. A lot depends on length and depth of recession. Fixes at below 5% look very possible don't you think? Imagine in 10 years time how cheap that £500 interest / month for every £120k borrowed is going to look!!

WTF?_2

HammersFan wrote: »

Getting both right would be down to luck as much as anything else. A lot depends on length and depth of recession. Fixes at below 5% look very possible don't you think? Imagine in 10 years time how cheap that £500 interest / month for every £120k borrowed is going to look!!

Not too much skill required in getting a house near the bottom of the market - unless there's a sudden inflationary spurt in the economy of course. Houses will take a long time to recover value once they hit the trough so just buy once the prices have stopped dropping and are scraping along for a few months. The biggest danger is getting caught in a 'bull trap' and buying and then watching it fall considerably further IMO.

On the IR front, anything below 5% fixed is good, so no need to worry about the absolute lowest there either. However - longer term fixes are dependent on swap rates not whatever figure politicians want to set base rates at and this time around I think the markets will be a little more savvy about longer term inflation prospects and price accordingly.

StevieJ

!!!!!!? wrote: »

Time to buy will be when rates are low and prices have bottomed.

Always better to simply borrow less if you can - this is a loan that will typically run over 20 years incurring interest all that time.

Should also be interesting to see how longer term fix pricing goes. Anything under 5% fixed for 10 years would be a gift. But will the banks offer it if inflation is likely down the line?

To be fair !!!!!! you try to talk sense.

HammersFan

!!!!!!? wrote: »

Not too much skill required in getting a house near the bottom of the market - unless there's a sudden inflationary spurt in the economy of course. Houses will take a long time to recover value once they hit the trough so just buy once the prices have stopped dropping and are scraping along for a few months. The biggest danger is getting caught in a 'bull trap' and buying and then watching it fall considerably further IMO.

quote]

In theory. Getting 'a house' is a lot different to getting 'the house that you want'. Don't know if you have bought before, but its harder than it looks - can take months, years even to find the right place (especially if loads of sellers are holding out for prices to rise). The other psychological difficulty many bears will face is that to secure a house you almost always have to pay more for it than anybody else is willing and able to.

WTF?_2

HammersFan wrote: »

In theory. Getting 'a house' is a lot different to getting 'the house that you want'. Don't know if you have bought before, but its harder than it looks - can take months, years even to find the right place (especially if loads of sellers are holding out for prices to rise). The other psychological difficulty many bears will face is that to secure a house you almost always have to pay more for it than anybody else is willing and able to.

Yes, because everyone is like the wallies you see on Location x3 searching for their 'dream home' etc. etc. blah blah.

And by definition, when someone who is currently a bear decides to buy, they'll be bullish on the market. If they were still bearish about the market they wouldn't be buying at all.

You seem to have missed the point that bull/bear is just a reflection of how you see the market going, not some kind of religion or philosophy of life.

Cannon_Fodder

StevieJ wrote: »

!!!!!! do you get at least from out of that statement?

Sometimes the journalists paraphrase...the actual comments seem to come from here...

http://www.nationwide.co.uk/pdf/about_nationwide/halfyearlyaccounts2008.pdf

"Outlook

As a result of the unprecedented turmoil in global financial markets and increases in inflation, we expect that the
UK economy will remain under significant pressure. Economic output has begun to contract in the second half of
2008, and we expect tough conditions to continue for some time to come. It is difficult to know precisely when
conditions will improve materially, but we believe the coordinated
actions of Governments around the world have
helped to lay the foundations for a future sustainable recovery of financial markets.
We expect the housing market to remain subdued, with market prices likely to continue to fall in 2009/10. Rate cuts
will help to minimise payment difficulties and alleviate payment shock as borrowers reach the end of their existing
deals. Reducing prices will improve affordability, which should bring about a recovery in the first time buyers’
market.
In light of this economic background, conditions in Nationwide's main markets will remain challenging for the
foreseeable future. However, the Society has always adopted a prudent and responsible approach to its business,
recognising the possibility of a more adverse economic environment. As a result we are well positioned with a
strong balance sheet that will enable us to support our members during difficult times and take advantage of
opportunities that may arise.

Graham Beale
Chief Executive
7 November 2008"

abaxas

My betting is property will either go up in value or drop by 25% in the timeframe stated above.

Why? Nationwide have been one of the worst offenders in getting the market wrong. I'm sure they will again.