2009...More price falls and less lending !

1echidna

The chief problem is the lack of availability of finance for potential buyers plus a rapidly deteriorating economic situation both of which imho are likely to continue for at least 18 months. Sellers understandably take some time to realise that to sell they must lower their asking prices. There could be a fundamental shift in the psychology of the market as sellers start to realise that in a falling market the price they get now will be better than that they would get if they wait. Plus many more forced sales due to the deteriorating economy. In all probability we are looking at sinusoidal type curve in which the rate of price fall gradually increases. Reductions of about thirty percent in 2009.

whathavewedone

It depends if you're comparing like with like.

Are you saying a 2 bed ex council flat costs as much as a 3 bed ex council flat? If so that does seem bonkers.

Or are you comparing a 2 bedroomed period flat in a sought after location with a 3 bed ex council flat in a dodgy area?

If it's the latter then it seems pretty fair enough to me.

Mary_Hartnell

At he end of the 1989 recession, prices had dropped far enough for the FTB to jump over the small "shoebox" flat and get perhaps a small terraced house (no ground rent, no enforced management and renovation charges).
This meant that the FTB's of five years earlier (young couples) were still stuck in their one bed flat because nobody wanted to buy it, so its price kept them in negative equity the longest.

You have been warned !

[Deleted User]

Ideally id like to buy a 2 bed terraced freehold property as a FTB.

At the moment, the few that are actually on the market are on at £170k. there are still 2 bed flats round here being marketed at £190k!!:eek:

Would anyone care to predict how much they will drop for in 2009? Should i be looking at 2003 prices or earlier?

I live right by Gatwick airport (outside London) and if it wasnt for my job, i would definately consider moving up north somewhere where, by my understanding i could get the same sort of house or bigger for £100k less and have a nice £40k mortgage, then in a few years i could start a BTL empire:rotfl:

dopester

Mary_Hartnell wrote: »

You have been warned !

:cool:

Supercharge_Me wrote: »

then in a few years i could start a BTL empire:rotfl:

Wouldn't you have preferred to have begun your "hoovering" on the BTL wagon just after the last crash? Even in 1999 your BTL heroes were going at full speed in buying property, at half the current price, that could only go up and up and up in price forever.

Assuming many of them have MEW-ed along the way over the next 9 to 10 years, continued buying more properties, or released equity to do some hard spending for cars and holidays and whatever else with free HPI.. don't you want to spend a little time waiting to see how the power of leverage on the way down works out?

http://news.bbc.co.uk/1/hi/business/your_money/372697.stm

Saturday, 19 June, 1999

Bust like the old days?

Over the past year, house prices have climbed by 5.7%, with the national average house price reaching £75,576, compared with £71,480 in May 1998. The strongest rises were in the south of England, particularly the highly-populated Greater London area, where prices rose by 10% year-on-year.

As interest rates have sunk lower, "hoovering" - buying to let - has swallowed up substantial proportions of property, another factor in the vicious circle of demand-outstripping-supply.

Last week, solicitors were working on the conveyancing of a small three-room house in central London, after the sale had been agreed at £550,000. But within hours, the agent took a call from someone who had earlier rejected it and put in an offer £15,000 higher. As contracts had not been exchanged, the new offer went to the vendor - and was accepted.

These are typical symptoms of an overheated market.

Thirty years ago, an average UK house cost just £4,600. Now, it costs fifteen times as much. Average prices in the South East over that time have jumped from £5,700 to £102,600.

"They are coming for all sorts of reasons - mainly business. There's a backlash against trying to make Frankfurt the banking centre of Europe and big banks such as Credit Suisse are sending people here. People also come for high standards of medical treatment and education."

Fast forward to 2009...

Businesses and households across the UK are in dire straits and a high incidence of bad debt is certain next year. Ratings agency Standard & Poor's predicts credit quality will continue to deteriorate on the back of rising unemployment, particularly credit card loans, and that commercial loan default is also worsening.

According to Credit Suisse analysts, impairment charges at Barclays, Royal Bank of Scotland and the combined Lloyds Banking Group could hit £60bn next year. UK banks have been recapitalised, but investment bankers are said to be preparing for a second round of capital raising on top of the £65bn already declared.

halight

Hi all,
I read in todays news paper that house prices are now at 2004 leavels!
And droping £100 a day.