Another 50% to fall off property - Robin Griffiths (Expert Economist)

the_ash_and_the_oak

Also if interest rates ever go up again i'm kinda feeling this will limit the amount FTBs at that time will be able to borrow. have a feeling that might have negative impact on prices a little right there

ukcarper

the_ash_and_the_oak wrote: »

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for me its only when people start having to move, whether it be upsizing, downsizing, divorce, death, new job, and start needing to sell in a larger number that we will see continued price drops imo. for me people aren't going to be kicked out of their houses by banks in any great number. but people will sell for other reasons over time (unless we are all now in our dream homes and never want to move again)

But surely those people are selling now apart from maybe downsizing why bother upsizing might as well wait till prices have dropped further.

the_ash_and_the_oak

ukcarper wrote: »

But surely those people are selling now apart from maybe downsizing why bother upsizing might as well wait till prices have dropped further.

tbh think owners are worried about selling at bottom. don't really feel sentiment has taken much of a hit to this point yet - and now there's been enough of a fall that people worry about selling too late imo

ad9898_3

My, it's busy in here today, and just think, we have the Halifax data tomorrow, back to your trenches to rest everyone............... tomorrow is going to a hard day on the frontline.:D

Lunar_Eclipse

penguine wrote: »

Do you think that your comment in your original post "be very careful what you wish for" might be a wee bit condescending?

I suppose it could be, although it was a general comment not directed in reply at one person.

It's a phrase that crops up on this board with tedious regularity, and can usually be translated to mean that anyone who discusses the possibility of house prices falling further is: wishing for that to happen / praying for it to happen / wishing bad things on other people / responsible for any further property price falls / responsible for the economic collapse of civilisation as a whole.

I don't hang out on this board so I have no experience that this is the case, although most people hoping for house price falls are not being altruistic. All the boards have elements of tedious regularity.:D

But to return to your original post, can you explain why house prices of 50% (peak to trough) would spell economic devastation for the UK?

I mentioned a further fall of 50% in line with the OP, nothing to do with peak-trough, which is quite possible since we're already half way there.

I was trying to be helpful in my post with some figures of historical house prices and their affordability. I also believe that a further fall of 50% is unlikely. But I don't have a crystal ball just like everyone else.

dopester

michaels wrote: »

(eg cars down 30%) but even in these sectors I think there will be a small bounce (cars need replacing etc) and for the majority of producers (eg food, services) demand is holding up ok.

A member of the family is handing over a car back to the dealer this week. Had it on a 3 year PCP deal (Personal Contract Purchase), where you put down a deposit, pay a monthly sum, then either pay the £8K at the end of the contract or hand it back.

Cars may need replacing but this person can't afford or risk buying a new car again, nor to pay off the deposit. Is very reluctant to take on a new credit deal for an expensive new car (even a basic one) when there may be changes of employment circumstances for them in the future

In summary, if something needs replacing, it doesn't mean people can afford or get the credit to replace it. In this instance I am sorting them out with an old runabout-car which has been cheaply but expertly DIY maintained in good-working-order for a while.

So I'm not convinced about your bounce coming from replacing non-essentials, when the money, savings, credit, or willingness to take on debt are reduced. Even if a car is viewed as an essential, more people will have to make compromises.

dopester

Dithering_Dad wrote: »

We've had a drop that is about 25% from peak. In that time we saw the banks practically go bust - HBOS was rescued by Lloyds (who in turn was rescued by the government), Northern Rock was taken over by the government, Leyman went bust, I could go on but I'm sure we all remember what's gone on....

My question would be, if it took all of that (practically a financial meltdown) to drop us 25%, what is it going to take to drop us a further 25%?

The financial world moves quicker. As Merryn Somerset Webb said, the stock-market can crash in a day or week, but house price crash takes 5 to 6 years to play out.

You can't really believe the carnage in the markets and banks collapsing or being supported has already fed through to just being 25%. A lot more lag involved.

For the second part of your post, with banks making profit, on a securer footing, ftse up - we shall see. For me it is all about the levels of banks/building society lending to the house market.

Graham_Devon

Damn dan, this seems to have upset you!!

dopester

Some interesting and amusing points of discussion in this thread. I'll re-read it after the match.

Thanks for that ad9898. I missed the mix of characters and discussions on this forum too, including the ones I don't always agree with.

DD, I wouldn't throw a glass bottle at Dan's head. Not even a shoe for him to duck like George Bush.

mewbie_2

Graham_Devon wrote: »

Damn dan, this seems to have upset you!!

Well 50% off is the roof and most of the first floor gone.