Can the housing market survive...

Really2

Graham_Devon wrote: »

Isnt this a two edged sword though?

Say they stabalized at 20%. Very close to what we are now. Lenders start lending 90% again.

Were back to stage one. FTB's can't buy, like the 5 years of boom. We know the BTL market was buying up the FTB houses and we know FTB';s could not buy. So we will have achived, nothing. Only thing that might achieve is BTL's come back to the market and prop up the FTBachieved market again.

Affordability is not just nominal drops. Look at the 80's.

I think 30% and stagnation that what was touted before all this happened.
Yes your lower paid may not be able to buy but that as always been the case there are not 60M properties in the uk.(well accept when you could buy a house on benifits:))

Thrugelmir

Graham_Devon wrote: »

So they would have to fall if FTB's couldnt afford them (and they couldnt, we have that evidence) and BTL's were not buying?

Unless of course, the market can do without FTB's?

Without FTB's no market. Downward pressure will remain on prices.

Really2

Graham_Devon wrote: »

What?

I'm simply asking a question and giving my reasons. I'm chilled, so don't get this?

It's just a dicussion up for debate

Graham read my quote I am saying you are expecting deposits to be 5% in a falling market.

it aint going to happen.

From your post you seem to think morgages will be 6X 3 month libor and 25% deposits for the next generation.

Really2

Thrugelmir wrote: »

Why just FTB's? The housing market is a pyramid. Knock 25% off a £500k house for some one with a £250k interest only mortgage. Thats a capital loss of £125k.

Still got £250k to repay on higher interest rates? Only left with £125k equity. So couldn't buy an average house outright for that at current prices.

Not only that but it was their pension retirement fund. Frightening thought. But for many reality.

I think most could retire now on £125K

Graham_Devon

Thrugelmir wrote: »

Without FTB's no market. Downward pressure will remain on prices.

That's my thinking.

I'm trying to figure out where we go from here, as I believe all the previous predictions have been wiped out completely by changes to policy.

All we can do is guess, obviously. But I think we can make a more educated guess if we look at all the factors ahead. That at the predicted 25% bottom out, FTB's still would not be able to afford properties (in general), and the interest rates, tax burden, and the current problems with their savings pots only compounds the problems.....IMO anyway.

Therefore I can't believe the predictions of 25% bottom out. We'd still have all the problems we did.

Really2

OK but just one question anrt there more FTB than last year?

As prices fall more will come back when they stabilize the "uncertain" will buy.

not everyone is profiteering.

Thrugelmir

Really2 wrote: »

I think most could retire now on £125K

I was inferring that their home is their pension fund, not that they intend to retire now.

Thrugelmir

Really2 wrote: »

OK but just one question anrt there more FTB than last year?

As prices fall more will come back when they stabilize the "uncertain" will buy.

not everyone is profiteering.

In April 2009 the most since 2004. So shows how investment related the market had become in the intervening period.

Really2

Thrugelmir wrote: »

I was inferring that their home is their pension fund, not that they intend to retire now.

But in 25+ years time they will be rent free and could still sell the house.

I think we have to accept there will be some HPI from todays prices in 25 year + time.

Even it there is not and they live to an average age what have they lost seeing they wont be paying rent?

Really2

Thrugelmir wrote: »

In April 2009 the most since 2004. So shows how investment related the market had become in the intervening period.

So they are coming back even when prices are higher and require massive deposits.

Like I said once they stabilize and deposits drop you will have a hell of a lot more FTBers in the market

FTBers are not out of the market they are waiting the same as any other market when they hit value the market will start to recover and transactions will increase.

This is not PRO HPI by the way i am just thinking through the prosses logicaly and FTB will come back to the market if falls ar nominal or in real terms when they can afford to buy.