Why prices wont stop falling any time soon

pandamonia

http://www.thisismoney.co.uk/mortgages/mortgages/article.html?in_article_id=474591&in_page_id=58

This is the reason why house prices will continue to fall regardless of how much "buyer interest" there is.

The banks only have so much money and they arent lending it to people with much less than 40% deposit.

without FTB's entering into the market prices will continue to fall until banks see the risk of falls begin to flatten out, a combination of rising unemployment, falling prices and lack of affordable credit will see prices fall to within 3x the average first time buyers salary.

alot of buyers are now waiting to get onto the market but i doubt many will jump in with these conditions.

you would need to be desperate for your own home to want to take out the crap mortgages that are available

Sir_Humphrey

It has been pointed out elsewhere that with the current lack of funding for mortgages, if demand increased, mortgage rates would be pushed upwards.

This helps to explain why mortgage interest rates (for low risk borrowers) are low when there is a greater scarcity of mortgages. Supply is down, but demand is down even more.

ad44downey

They've got at least 20-25% more to fall before levelling off for a few years.

pandamonia

i agree, im just looking through rightmove now and people have been on the market for over a year and not moved the price lol. they dont understand they are making the market worse

ad9898_3

pandamonia wrote: »

i agree, im just looking through rightmove now and people have been on the market for over a year and not moved the price lol. they dont understand they are making the market worse

You know, I thought this. Some people though have absolutely no choice but to wait for a mug to come along, there are a hell of a lot of people out there who's loans are approaching what the house is worth. It shouldn't be underestimated how much MEW has been going on over the past few years.

Here is an example, an extreme one, but an example non-the less. I have a friend who bought his house in '88 for 24k, he added and extension to it 10 years ago, which he built himself, it cost him 10k. His wife told me the other day that because he's been out of work for a few weeks she is getting worried, I said 'why, you have bought your house 21 years ago for 24k ?, she says 'yes but we now owe 90k, our house is worth 110k and the mortgage is with NR'

Needless to say I was shocked.

pandamonia

ad9898 wrote: »

You know, I thought this. Some people though have absolutely no choice but to wait for a mug to come along, there are a hell of a lot of people out there who's loans are approaching what the house is worth. It shouldn't be underestimated how much MEW has been going on over the past few years.

Here is an example, an extreme one, but an example non-the less. I have a friend who bought his house in '88 for 24k, he added and extension to it 10 years ago, which he built himself, it cost him 10k. His wife told me the other day that because he's been out of work for a few weeks she is getting worried, I said 'why, you have bought your house 21 years ago for 24k ?, she says 'yes but we now owe 90k, our house is worth 110k and the mortgage is with NR'

Needless to say I was shocked.

so they released all their equity?

what fools

Mini_Bear

Totally agree and i know a couple who have mewed all the way to the very top. They have a mortagage outstanding of 285k on a house similar to ours which in a firesale will go for 175k. We are very worried for them as they still seem in denial.

pandamonia

Mini_Bear wrote: »

Totally agree and i know a couple who have mewed all the way to the very top. They have a mortagage outstanding of 285k on a house similar to ours which in a firesale will go for 175k. We are very worried for them as they still seem in denial.

lol they are screwed

dopester

ad9898 wrote: »

You know, I thought this. Some people though have absolutely no choice but to wait for a mug to come along, there are a hell of a lot of people out there who's loans are approaching what the house is worth. It shouldn't be underestimated how much MEW has been going on over the past few years.

Here is an example, an extreme one, but an example non-the less. I have a friend who bought his house in '88 for 24k, he added and extension to it 10 years ago, which he built himself, it cost him 10k. His wife told me the other day that because he's been out of work for a few weeks she is getting worried, I said 'why, you have bought your house 21 years ago for 24k ?, she says 'yes but we now owe 90k, our house is worth 110k and the mortgage is with NR'

Needless to say I was shocked.

Twonk. No sympathy. It was like that guy in The One Show the other night... built his cottage 30 years ago, and then the show gave it sympathetic edge as the bailiffs arrived, to put an end to him squatting in "his own" property.

Where did all the equity go?

http://www.bbc.co.uk/blogs/theoneshow/consumer/2009/02/06/do-squatters-ever-deserve-our.html

dopester

pandamonia wrote: »

Why prices wont stop falling any time soon

Of course they won't. Eventually those holding out for old-world prices, be it houses or brand new cars.. will have to get in to the real world and cut their prices, as there is a lot less money around to buy with.

Not that you would have ever expected it from the hardliners on this forum... :rolleyes:

As we've learnt since, this could hardly have been more wrong, with hundreds of thousands of employees accepting pay cuts in an attempt to hang onto their jobs.

http://blogs.telegraph.co.uk/edmund_conway/blog/2009/02/11/my_mauling_at_the_hands_of_mervyn_king

StevieJ

pandamonia wrote: »

lol they are screwed

Charming :eek: