Why arent HP falling fast enough thread

Yoshua

Only a fool would buy any property now even for heavily discounted bargin prices.

Everyone knows next year will see further bigger drops and eveyone also knows that it will be a long time before we see any stability.

The only surprise is why they still havent fallen more than they have?

penguine

It's Christmas, typically slow time of the year. I expect some of the properties that have been languishing on my local EAs' books for the past 6-8 months, dropping price only by £10k or so, to have a much lower asking price in Jan-Feb.

besonders1

People will be reducing them in January as no one really buys in December. Plus, there is going to be pretty bad times of the recession to face next year so people will need the cash and there will be more repossessions.

Raffles99

I was thinking exactly the same thing over the weekend. Even in your wildest dreams it was hard to imagine a worse combination than a) a virtual drying up of mortgage lending to those with no deposits, b) substantial increases in unemployment with worse to come and c) an sharp fall in LTV ratios.

There are claims that people are holding off from selling, but even this looks like a mistake. A friend of mine recently moved to the country and tried to rent his house because he thought it was a bad time to sell. The best offer was well below the price the agent said he would get, and he had to agree to a 3-year unbreakable rental contract where the tenant can leave at any point without penalty. He should have sold and been done with it.

Rental prices are down sharply in London. Rents ARE realistic in terms of value, as owners as more likely to drop prices to meet the market. A house near us is up for rent at £1,900 per week or for sale at £3.9m. This means the rental yield is just 2.5%! Realistically, the sale price should be closer to £2.5m (4% yield) if £1,900 is a fair rental price.

Look also at auction prices, which are 'honest' valuations in that they represent the most someone was prepared to pay. You are looking at prices sharply below estate agent asking prices as far as I can tell.

Prices will catch up with reality in the end. People are simply too cautious in taking a knife to the price of their major asset, even when it has sat on the market with no offers for 6 months ....

Marc1978

That makes me a fool then.

In the process of selling existing house and buying a new house.

We've taken a big reduction in our existing house and have negotiated a decent reduction on the house we are buying (not as low as I wanted but low enough). Thought about going into rented for a year but the figures didn't seem to stack up because I can port my existing BoE base rate tracker.

We are buying a house that we will stay in for the rest of our lives - not a financial investment but a lifestyle investment.

skap7309

I think give it a few weeks until after Christmas. It will be a case of 'new year - new start' for alot of people and i think we will see big slashes to asking prices for the people who really want to move.

RDB

Yes it seems all are in agreement that next year we will see prices catch up with reality, or should that be down.......

Its a good question though why has it been taking so long to see the really huge crash prices?

Some are saying its only recently that people have been talking about HPC, but Ive been saying it for 18mnths or more. Even 2 yrs ago we were saying this crash is coming on this very forum it was called something different then.

So yes it is taking a long time to filter down to asking prices.

besonders1

Seems like they went up faster than what they have been going down - but in reality that is not true as many people have reduced then by 15% in just 3 months. It would be interesting to see what happens if a seller reduced a house to 50% , would it be snapped up like hot cake?

amcluesent

OT, but the stock market has found support now for weeks at around 4,200 after coming back from 3800 when no-one knew if the banks would survive.

Fair enough over-leveraged, distressed sellers are letting rubbish flats go at 50%+ discount to 2007 prices. Quality houses in good locations unlikely to come off more than 25%.

illzlee

reckon theres an element of false hope in house prices at present. Many of the houses round by me (derby) have dropped by 15% but still aren't selling. Sellers must be clinging to any 'money' they have made by the house price fall, when in reality those of us already with a house can move upwards more easily as the gap in price reduces. Think it's only repo's or ex BTL properties that are heaveily reduced as yet.

Austin_Allegro

I think the 'denial' stage is over. I think now it's not that people won't drop their prices, it's that they can't, because they will go into negative equity.

I think we're in the final months of the stalemate before forced repossessions begin; though I suspect the government may have some bailout up its sleeve to prevent that happening.