Telegraph: wages collapse at fastest rate in 60 years

StevieJ

Generali wrote: »

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.

But forced sales are likely to be contained by low interest rates and Govt support.

the_ash_and_the_oak

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.

agree w this btw. Think you can't really have price falls of any real consequence (or even have price discovery at all) with the current low levels of transactions. Don't really think we'll see any falls until the market actually moves again (imo we have stasis now - not falls in any meaningful sense of the word). Measures at the moment are aimed at preventing repossessions and trying to make sure people can stay in their houses. This will reduce forced sales - which is good imo - and prevent large scale falls happening quickly.

kinda feeling this is looking more and more like a slow burner now tbh

StevieJ

ukcarper wrote: »

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.

I should imagine that is fairly normal, I bought just before the peak last time and never really noticed prices dropping, although I did notice lack of actvity i.e. for sales signs up a long time, much worse than current situation.

the_ash_and_the_oak

Dan: wrote: »

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.

Those that had deposits in 2007 but were priced out by investors and now have another 18 months worth of savings plus a 20% fall in prices in a good position now compared to where they would have been in past - agree w this

Those coming behind them - thinking not so much the case. 18 months not really enough to save up the kind of deposit required imo. Feeling it takes longer than this to save up a deposit - esp for the buyers of 2010 and 2011 - banks might lend them less also if rates are going to be higher - could reduce the amount they are able to borrow imo.

agree that FTBs have it better than they did last year tho tbf

mp2

Dan: wrote: »

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

mortgage lending determines house prices. it always has done.

StevieJ

the_ash_and_the_oak wrote: »

kinda feeling this is looking more and more like a slow burner now tbh

Disagree, we have already had 20% falls, I don't think it will fall much further. The credit crunch has done the work of the recession, we will not get it twice.

Generali

StevieJ wrote: »

But forced sales are likely to be contained by low interest rates and Govt support.

Perfectly true. However given that unemployment is likely to continue to rise for 2 years at the very least (if the current recession/unemployment picture is similar to the last 3) then we can reasonable expect problems for the housing market for the next 3 or 4 years at the very least.

Do you think that interest rates and high levels of borrowing can be sustained for that time? I have serious doubts which you must have too, surely.

the_ash_and_the_oak

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.

Totally agree w this - for all talk of weak sentiment, feeling brits love for houses pretty undiminished - don't think sentiment has taken a hit at all imo. For most its always the right time - think this isn't a bad thing - keeps some activity in the market and enables people to move. Is also reason why it will take a long time to bottom out - w gradual declines for long time to come imo w a certain level of buyers supporting and cushioning it all the way down

the_ash_and_the_oak

StevieJ wrote: »

Disagree, we have already had 20% falls, I don't think it will fall much further. The credit crunch has done the work of the recession, we will not get it twice.

Not sure about this tbh - feel a lot of the falls have been concentrated in city centre flats with v large falls - don't think its really spilled over into the regular market so much yet. Most regular houses for sale not really that much difference to 2006 or 2007 prices (I know its only asking and not selling prices). Don't really feel much has actually happened w transactions being so low

StevieJ

Generali wrote: »

Perfectly true. However given that unemployment is likely to continue to rise for 2 years at the very least (if the current recession/unemployment picture is similar to the last 3) then we can reasonable expect problems for the housing market for the next 3 or 4 years at the very least.

Do you think that interest rates and high levels of borrowing can be sustained for that time? I have serious doubts which you must have too, surely.

borrowing (I presume you mean govt) Interest rates will stay low for the forseeable IMHO.