House price falls may well accelerate in 2009

neverdespairgirl

The heading of this post is my opinion. The BBC has an article today which states:

Mortgage rationing is set to become more severe in 2009 without government action, according to a lenders' group.

Michael Coogan, director general of the Council of Mortgage Lenders (CML), said there were fewer active lenders - and with less money.

He suggested that mirroring 2008 lending levels next year would be "a real challenge".

Small institutions are set to spend up to a third of their profits covering the bail-out of bigger banks, he added.

Mr Coogan was speaking at the CML's annual conference on Tuesday at the end of what he described as a "momentous" year for the mortgage industry.



my interpretation of this is that, if funding is lower next year than this year, prices will zoom down.


http://news.bbc.co.uk/1/hi/business/7761338.stm

kennyboy66_2

I doubt if lending will fall below that from August 08 - Dec 2008, but trying to match the first half of 2008 will a different matter altogether.

Its a bit of a puzzle why prices haven't fallen more sharply considering how few transactions there have been in the last 4 months.

hearts

Yawn......Prices may go down prices may do many things. Banks may lend banks may not. Thats my opinion ;-)

zcacmxi

Credit Suisse added another 650 job cuts to the increasing number already lost so far. With job security issues for the remainder of staff in the City, I think London will be hit particularly severely.

The fact there may be no mortgages probably makes little difference. I think the confidence to apply for them is also at an all time low.

domcastro

I think the government will force them to lend.

Dithering_Dad

My interpretation is that if people cannot get mortgages, home owners and renters will stay put and the housing market will remain static.

How can prices fall if no one can buy them?

besonders1

Dithering_Dad wrote: »

My interpretation is that if people cannot get mortgages, home owners and renters will stay put and the housing market will remain static.
How can prices fall if no one can buy them?

The banks do it for them when they get reprocessed

StevieJ

A guy from the FSA on Bloomberg stated that (after the govt injections) the banks have enough resources to support both business and the housing market.
I have to say, it is sad but with every announcement you have to ask why they have announced this at the current time?

Dithering_Dad

besonders1 wrote: »

The banks do it for them when they get reprocessed

Why would they get reprosessed?

FoxtonsRIP

Dithering_Dad wrote: »

How can prices fall if no one can buy them?

Basic Economics. The house prices keep failing until a point at which people can afford to buy them.

WTF?_2

kennyboy66 wrote: »

I doubt if lending will fall below that from August 08 - Dec 2008, but trying to match the first half of 2008 will a different matter altogether.

Its a bit of a puzzle why prices haven't fallen more sharply considering how few transactions there have been in the last 4 months.

The housing market turns like a supertanker - there's plenty of stickiness from people who immediately accepted a 100% increase in their house price over a few years as being valid but can't accept that the market dictates it is falling back from that price level rapidly. Petrol station owners don't look for £1.30 a litre any more, house sellers need to catch themselves on to the market as well.

Prices of assets (houses in this context) must correct to sensible levels again before we can get out of this mess.

The stickier prices remain in the face of the falling market, the longer we will be in this crisis.

The government isn't exactly helping by stupidly trying to underpin a fast falling market with taxpayer cash either. But then (a) Brown is a control freak and (b) they have an election to face within two years.