Anyone Nervous?

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TBH Dan, I wouldn't say I'm nervous, but those figures today were quite surprising, I still see negative GDP, unemployment, tax hikes and of course inevitable IR rises in the future as stumbiling blocks to any real recovery.

We all know that the banks are being plied with QE money, this eventually will stop and there will still be a big funding gap, but I'm not too worried, if this was the bottom, the factors I have mentioned will certainly stop any HPI for 3-4 years even if it doesn't cause the bottom too fall any further.

mitchaa

Harry_Powell wrote: »

Have a look at trends in previous house price crashes, not one of them have a perfect V shape. We'll see more falls this year and next.

My vote is for 'Hold'.

Hold out for another 5-10% perhaps so good in terms of purchase value but gambling with interest rates whilst you are waiting, not so good;)

Now, or in the next 6 months anyway may be the perfect time to buy whilst IR's remain low. As soon as they start going up, any falls in the housing market will just be taken up with increased mortgage payments.

Harry_Powell

mitchaa wrote: »

Hold out for another 5-10% perhaps so good in terms of purchase value but gambling with interest rates whilst you are waiting, not so good;)

Now, or in the next 6 months anyway may be the perfect time to buy whilst IR's remain low. As soon as they start going up, any falls in the housing market will just be taken up with increased mortgage payments.

Someone else was saying this on a thread a couple of months ago when I first joined MSE and stumbled into this board. I remain to be convinced.

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mitchaa wrote: »

As soon as they start going up, any falls in the housing market will just be taken up with increased mortgage payments.

It is possible though that with people so over indebted with rates as low as they are now that any rise in interest rates will be countered with further falls in prices. For example a 5% rate on a 100k loan would cost £5k, 10% rate on 50k would cost the same.

I know it wouldn't work exactly like that but if/when rates go up, prices will fall back for sure, the only question is how much.

Dan:_4

ad9898 wrote: »

It is possible though that with people so over indebted with rates as low as they are now that any rise in interest rates will be countered with further falls in prices. For example a 5% rate on a 100k loan would cost £5k, 10% rate on 50k would cost the same.

I know it wouldn't work exactly like that but if/when rates go up, prices will fall back for sure, the only question is how much.

This seems the last hope for 'bears'. Interest rate increases = deafults = forced sales = cheaper houses.

Can't see it happening myself. A lot of people are taking advanage of the current base rate to pay off existing debt, so are likley to better off when rates go up.

the_ash_and_the_oak

Treadmill wrote: »

Watch the house prices go up even more sharply as STRs clamour to grab a bargain while the housing market is still at the bottom

Demand will soon overtake supply

you think there are many of these?

Dan:_4

the_ash_and_the_oak wrote: »

you think there are many of these?

There's certainly people with money waiting in the wings to snap up the bargains.

the_ash_and_the_oak

Dan: wrote: »

This seems the last hope for 'bears'. Interest rate increases = deafults = forced sales = cheaper houses.

Can't see it happening myself. A lot of people are taking advanage of the current base rate to pay off existing debt, so are likley to better off when rates go up.

don't agree w this tbh. think the driver of future falls won't be the fortunes of current owners, but the inability of future ftbs to support current prices

also no really sure about the word hope. I'm bearish* because I think prices will fall, not because I want them to fall.

*given that bulls have been characterized as 20% down and bears 70% down here - then prob don't really fit into either camp

Darth_Marty

Things seem to be stabilising definitely, if i were a buyer now though I wouldnt be rushing to buy, I still think the remainder of this year will see small reductions, tough borrowing criteria and vendors willing to negotiate dramatically so time is still on the buyers side. If however employment levels stabilise or increase then confidence will flood back into the market and 2010 could see gradual rises. Employment is as always the key.

Dan:_4

the_ash_and_the_oak wrote: »

don't agree w this tbh. think the driver of future falls won't be the fortunes of current owners, but the inability of future ftbs to support current prices

also no really sure about the word hope. I'm bearish* because I think prices will fall, not because I want them to fall.

*given that bulls have been characterized as 20% down and bears 70% down here - then prob don't really fit into either camp

Ftbers can support current prices, and they were in 2007.