Telegraph: wages collapse at fastest rate in 60 years

Alan_M_2

Dan: wrote: »

Also, this is where Dithering Dad's arguement comes in. If you wait for another 5-10ish% drop, it could quickly be wiped out with higher mortgage payments when interest rates increase.

The problem with this...and it is by far the largest problem is, the vast majority of the general house buying public simply do not understand this so it doesn't enter their calculations. Despite it being quite possibly correct.

StevieJ

mp2 wrote: »

theres nothing to support it dan. unless mortgage lending goes up significantly, it will keep falling until it does, or prices will reach the equlibrium based on current lending which is far far lower than where we are now.

theres just not enough money in the market at the moment.

Then again there are not enough houses for sale, potential sellers are just not bothering maintaining a sort if equilibrium. I have to say that there are not many houses for sale near me, in fact the number of houses for sale is smaller than when the market was at the peak.

lostinrates

Dan: wrote: »

It would be significant to the average person and the media, but a lot of the FTBers on this baord are still expecting (hoping?) for a lot, lot more, which simply will not happen.

Also, this is where Dithering Dad's arguement comes in. If you wait for another 5-10ish% drop, it could quickly be wiped out with higher mortgage payments when interest rates increase.

I'm in the group DD was aiming at. We have a large deposit, and if things get much worse we might simply feel forced to not buy in such a way as to allow us to start my land based business. we have different borrowing figures for different types of property/options. In the short term fixes would be incredibly useful, but one of the bonuses for us, is that we are fairly certain our income willrise in the future to allow future rises. In our partivcular scenario DH's income should double next year: our borrowability then is obviously significantly greater and it might be more prudent to go with that and sacifice the financial benefits of the interest rate fix now: but only makes sense if we really do hold out for the ''right property''. The types of property we are looking at show really irratic pricing. Many have dropped significantly more than average over a large geographical area in the south of England. If these prices hold at this sort of level for the next year and DH remains in a job and gets his pay increase we personally for our individual situation: a complicated mix of finance and future ambition, be better placed to wait. However, we remain open to a good comprimise now (we are looking at one today for example) or scrapping the idea entirely. Other opportunities also keep appearing, which financially would make sense, but emotionally is a big comprimise. I believe its too unclear a forecast to call it for us yet.

ukcarper

Nylontokyo wrote: »

Its all just part of everything going down together.

Rents House prices wages Employment the pound, its all going down.

You are right this is not a bad thing we need to get back down to start going up again.

The sooner house prices get back to 3x earnings the soon recovery can begin.

The last crash took up to 6 years from start to finish, we are now what 2 years in?

I am thinking things will carry on going down for another few years yet then maybe some things will never go back up.

The only thing going up is unemplyment.

As people have pointed out not everything is going down in fact I would guess most people are suffering from inflation not deflation I can tell you my outgoings are a lot more this year than last. The small decrease in my Mortgage easily being off set by food price increases.

Try telling someone whose has been put on a 3 or 4 week let alone lost their job it’s a good thing.

Dan:_4

the_ash_and_the_oak wrote: »

(side question: when do you think these higher rates are going to come into effect?)

That's the real question isn't it, and everyone will have their own opinion. In my view the Government will want to keep them low for as long as possible to to ensure the economy (and HPs) along - even if inflation takes off.

Maybe around this time next year we might start seeing small increases in the bank rate.

the_ash_and_the_oak wrote: »

Also not really feeling that its so much that FTBs are waiting primarily - is more I think they don't have enough savings. Still think the main problem isn't whether people can afford to keep what they already have but whether there's enough new people with money saved to keep the prices so high

I would argue that FTBers have never had it better. Those who put off buying in 2007 have had 18 months to incraese their savings, couple that with the already 20% fall - and things are looking attractive. And prices have now come down enough for some who were priced out of the market in 2007.

Dan:_4

mp2 wrote: »

theres nothing to support it dan. unless mortgage lending goes up significantly, it will keep falling until it does, or prices will reach the equlibrium based on current lending which is far far lower than where we are now.

theres just not enough money in the market at the moment.

There are a lot of other factors to consider then just mortgage lending, to move the market up as well as down.

Dan:_4

Alan_M wrote: »

The problem with this...and it is by far the largest problem is, the vast majority of the general house buying public simply do not understand this so it doesn't enter their calculations. Despite it being quite possibly correct.

Couldn't agree more. The general public could not care less about house prices, interest rates, time to buy, mortgage products etc.

They will buy when the time is right in their life, end of.

Generali

StevieJ wrote: »

Then again there are not enough houses for sale, potential sellers are just not bothering maintaining a sort if equilibrium. I have to say that there are not many houses for sale near me, in fact the number of houses for sale is smaller than when the market was at the peak.

It's what economists (yeah I know) would predict - as prices fall, the number of sellers in the market fall.

One of the things that is unusual about housing markets is that because such a large proportion of purchases is by secured lending that you get forced sales of second hand items at prices that the 'owner' has no control over. The worse things get, the higher supply could become.

ukcarper

Dan: wrote: »

Couldn't agree more. The general public could not care less about house prices, interest rates, time to buy, mortgage products etc.

They will buy when the time is right in their life, end of.

Couldn’t agree more my daughter bought just before peak not because she wanted to make money but because she wanted a bigger house she has no intention of moving can afford the mortgage and I don’t think she even thinks about what she’s lost on paper let alone worry about it.

System

Alan_M wrote: »

They will start creeping back up in summer and towards the end of the year.

Really? What's your source for this fact you've stated?