Why House Prices Aren't Going to Rise - From The Fool

Generali

StevieJ wrote: »

What about people who move house with same lender, is that a mortgage approval? bearing in mind that the new house price is unlikely to be the same as the old. In addition funds are freed up by people paying down their mortgage ( esp at the current time) and mortgages coming to the end of their life.

No idea. The CML could probably help you there. The phone number is 0845 373 6771.

Anyway, time's getting on and I have to take the Generalissimos swimming in the morning.

Toodle pip! Nice chatting to you.

StevieJ

Generali wrote: »

No idea. The CML could probably help you there. The phone number is 0845 373 6771.

Anyway, time's getting on and I have to take the Generalissimos swimming in the morning.

Toodle pip! Nice chatting to you.

Good night, and have a nice day tomorrow.

Gorgeous_George

People deciding the time is right to move up or down the housing ladder do not bring properties to the market. They are selling one and buying one so there is no net effect.

Supply. Houses are brought to the market by death or by housebuilders. People are not dying any sooner and housebuilders are not building. In essence, the net effect is no additional supply. If anything, less supply than normal.

Demand. People split up more during recessions. Of course, most will meet new partners so no real effect on demand. Prices are falling and interest rates are historically low. More people could afford to repay a mortgage. However, sentiment is negative but, as people grow up, they seek a home of their own - be it rented or owned. Pent-up demand must be increasing even if demand itself is not.

Finally, prices will never be allowed to rise to the hideous levels of recent years. A requirement to provide a deposit is a long way from providing 125% mortgages/loans. Many people will never save 10% of the price of a house and a new age of tenants is likely to follow.

GG

sabretoothtigger

Heres a hedge fund manager investing in mortgage backed securities - Paulson

http://www.youtube.com/watch?v=6Qjn5ANgcsw


Also Barclays setup a property fund in February - IUKP.l

http://uk.finance.yahoo.com/echarts?s=IUKP.L#chart7:symbol=iukp.l;range=20090202,20090612;compare=gbpusd=x;indicator=macd+rsi+volumema;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

mitchaa

Generali wrote: »

I'm not, I'm saying (pretty clearly I thought although obviously not) that the occasional up month has been seized upon and extrapolated by others.

My take on house price stats is pretty clear I hope: MoM is basically noise; YoY or 3month on 3 month will tell you a story. Given the confusion over earlier point perhaps I haven't made myself clear enough either way.

Perhaps you can direct me to any post that depicts any notion of HPI starting all over againWhat the bulls are getting at from what i was reading, is that they can see clear stagnation.

5 Months worth of figures being the same is more than just noise?

Recession is over next month in its definition, im sure you and many other bears were all in the 2012/2013 camp but yet Gordon Brown has pulled it out of the bag in just 3-6mths:rotfl:

We will see house prices drop in June that is a certaintly due to the 2% rise in May. The bears will get hope that things have returned to normal and July figures will be released and will show an increase. Just like now, instead of 5mths worth of stagnation, it will be 7 in 2 months time. Either that or things really will settle down at +/- 0.5% monthly up and down.

To be a winner in this, you clearly need to be buying into the stagnation market at the right time, as we all know where interest rates are going;) A £150k mortgage may cost me £1000pm now but the same £150k may cost me £1250pm this time next year.

Its not about missing the boat on purchase price as much now, its more so with missing the boat at the right time to buy due to interest rates.

The market may well fall another 10% but would there be any difference to your monthly mortgage payment?

£150k now in June 09 with IR @ 4% = £800pm
£135k in June 10 after 10% drop but with IR @ 6% = £880pm

http://www.thisismoney.co.uk/interest-rate-rise-calculator

Think about it

skap7309

mitchaa wrote: »

£150k now in June 09 with IR @ 4% = £800pm
£135k in June 10 after 10% drop but with IR @ 6% = £880pm

http://www.thisismoney.co.uk/interest-rate-rise-calculator

Think about it

Certainly something to think about.

Thrugelmir

mitchaa wrote: »

Recession is over next month in its definition, im sure you and many other bears were all in the 2012/2013 camp but yet Gordon Brown has pulled it out of the bag in just 3-6mths:rotfl:

Could you enlighten me as to what Gordan Brown has pulled out of the bag some 4 years earlier than expected ? :rolleyes:

Thrugelmir

skap7309 wrote: »

Certainly something to think about.

In a further year a FTB could have saved another 10k. Thereby reducing their mortgage and even getting a better rate.

So not so simplistic.

mitchaa

Thrugelmir wrote: »

In a further year a FTB could have saved another 10k. Thereby reducing their mortgage and even getting a better rate.

So not so simplistic.

How does he save £10k?

Are you assuming 1 is paying a mortgage and the other is living rent free?

mitchaa

Thrugelmir wrote: »

Could you enlighten me as to what Gordan Brown has pulled out of the bag some 4 years earlier than expected ? :rolleyes:

The end of the recession, i.e growth in a single 1/4. If you are unaware, both April and May have shown positive growth and if June posts anything better than a -0.29% then recession is officially over.

Something experts didn't think would happen for another 3yrs or so.

Gordon will be hailed as a hero and Labour may get some votes back. (We all know he's a buffoon though )