Can the housing market survive...

prowla

Of course the housing market will survive - people need to move around.

We're going through a correction at the moment, because prices and lending had got silly, and there was no brake on the borrowing because of low interest rates.

But there'll probably be another boom in the next decade or so.

freeoffers

ukcarper wrote: »

although my house is probably worth 60k less than it was in 2007 it doesn’t make that much difference to me as I will be living rent free in a house that would cost 1k a month to rent.

I like the attitude. A house is a home first an investment second.

roseland69

prowla wrote: »

Of course the housing market will survive - people need to move around.

We're going through a correction at the moment, because prices and lending had got silly, and there was no brake on the borrowing because of low interest rates.

But there'll probably be another boom in the next decade or so.

The boom we have just seen was fuelled by crazy lending (and perpetuated by the whole "frenzy" of house improvement shows and making cash on property greed).

What will the next one be fuelled by?

Genuinely curious. If Banks will never go back to the big multiple lending and self certification and lax checking of applications - than how will it kick off?

I have no doubt prices will carry on going down until things "level off" at a sensible level. I have no doubt there will be a rise again. I just can't see a rise like we've just had ever again unless there is something specific to make it happen.

Graham_Devon

roseland69 wrote: »

The boom we have just seen was fuelled by crazy lending (and perpetuated by the whole "frenzy" of house improvement shows and making cash on property greed).

What will the next one be fuelled by?

Genuinely curious. If Banks will never go back to the big multiple lending and self certification and lax checking of applications - than how will it kick off?

I have no doubt prices will carry on going down until things "level off" at a sensible level. I have no doubt there will be a rise again. I just can't see a rise like we've just had ever again unless there is something specific to make it happen.

They definately will, and will make all the same misakes again. If they can't do it the same way, they will find some other way. Greed rules here too.

Doubt this will be in the next decade though.

Really2

Graham_Devon wrote: »

Yes, thats fair enough. And pretty obvious.

But what about the rest of the original post? All the stumbling blocks that will hit at some point? Are you factoring them in?

You have lost me there your OP says about deposits and IR rates etc.

I am sure I answered all that. Saying when the market stablizes deposits reuired will fall and will rates will get closer to libor.

So the maket will not have to survive without FTBer's they will come back just like after every bust.

dopester

Graham_Devon wrote: »

They definately will, and will make all the same misakes again. If they can't do it the same way, they will find some other way. Greed rules here too.

Doubt this will be in the next decade though.

It has been too severe this time. The consequences are only just beginning to play out.

A New Taboo on Debt?

A more positive sign for the future and those who invest in it would be the emergence on a new taboo on debt. When people have suffered from overindulging in some practice, rules often change in the wake of a trauma to place it off limits.

The bitter experience of debt default and debt bondage by taxpayers could lead to at least a partial repudiation of the high-tax policies that encourage debt. That would be far more constructive for the future.

Graham_Devon

Really2 wrote: »

You have lost me there your OP says about deposits and IR rates etc.

I am sure I answered all that. Saying when the market stablizes deposits reuired will fall and will rates will get closer to libor.

So the maket will not have to survive without FTBer's they will come back just like after every bust.

I also mentioned stuff like tax hikes, unavailability of mortgages.

You are going down the route of "when the market stabalizes". I agree with everything you say there. But can the market do without the FTB's while is ISN'T stable, and can it be stable with all the stumbling blocks about to hit?

Remember, this is all bearing on the fact that bulls are posting up articles about 20-25% off peak being the bottom, which means stabilizing from there....which then goes back to everything else I said in my OP, the FTB still will not be able to afford.

I'm not sure why the OP is so confusing to some. But maybe I haven't worded it that well? But others seem to have got it?

1echidna

Graham_Devon wrote: »

I also mentioned stuff like tax hikes, unavailability of mortgages.

You are going down the route of "when the market stabalizes". I agree with everything you say there. But can the market do without the FTB's while is ISN'T stable, and can it be stable with all the stumbling blocks about to hit?

Remember, this is all bearing on the fact that bulls are posting up articles about 20-25% off peak being the bottom, which means stabilizing from there....which then goes back to everything else I said in my OP, the FTB still will not be able to afford.

I'm not sure why the OP is so confusing to some. But maybe I haven't worded it that well? But others seem to have got it?

The thing about the market at the moment seems to me that it is very low volume. People in financial problems are to some extent being protected by the courts, banks and gov't from having to sell. Can this last? I don't know. Those who have a choice perhaps don't want to sell at what maybe the low point in the market. If people, and there must be many given the propaganda, think that it is the low point they will pull out all the stops if they can to buy and if there are enough of them, given low market volumes, the prices will stabilise. We have seen this happen over the last few months and more people, if they have a choice, will be choosing not to sell. Can the market stay slack and prices relatively stable I don't know but I think that there will be lots of Vested Interests (including the gov't having a big stake in the banks) who will be trying to ensure that it does. The lack of affordability for first time buyers comes into play when there is more distressed selling or higher interest rates - may happen but I wouldn't like to call it.

Really2

Graham_Devon wrote: »

I also mentioned stuff like tax hikes, unavailability of mortgages.

You are going down the route of "when the market stabalizes". I agree with everything you say there. But can the market do without the FTB's while is ISN'T stable, and can it be stable with all the stumbling blocks about to hit?

Remember, this is all bearing on the fact that bulls are posting up articles about 20-25% off peak being the bottom, which means stabilizing from there....which then goes back to everything else I said in my OP, the FTB still will not be able to afford.

I'm not sure why the OP is so confusing to some. But maybe I haven't worded it that well? But others seem to have got it?

Taxes will go up for who will it be the FTB or the better off?
Will company taxes go up?

Lending is less contracted than this time last year!

I know what you are asking but for such hypothetical things like tax it is hard to answer.

Yes taxes will go up but it will pinch renters as much as FTBers. It depends if buying a house is only slightly more expensive than renting.

I can't see the future but I cant see FTBs leaving the market I can a subdued market for many years.

But I know you think high inflation. I don't I think we will see the next 10-20 years IR's will be well below recent historical norms.
Afordabilty comes in to the equation and I don;t know the answer to that and neither does anyone on here.

Graham_Devon

1echidna wrote: »

The thing about the market at the moment seems to me that it is very low volume. People in financial problems are to some extent being protected by the courts, banks and gov't from having to sell. Can this last? I don't know. Those who have a choice perhaps don't want to sell at what maybe the low point in the market. If people, and there must be many given the propaganda, think that it is the low point they will pull out all the stops if they can to buy and if there are enough of them, given low market volumes, the prices will stabilise. We have seen this happen over the last few months and more people, if they have a choice, will be choosing not to sell. Can the market stay slack and prices relatively stable I don't know but I think that there will be lots of Vested Interests (including the gov't having a big stake in the banks) who will be trying to ensure that it does. The lack of affordability for first time buyers comes into play when there is more distressed selling or higher interest rates - may happen but I wouldn't like to call it.

Does it though?

If FTB's cannot afford, and BTL investors are not buying up the FTB market, as we have seen since around 2002, the FTB market just stops.

Everyone seems to refer to "well FTB's could afford it before, its just they cant get funds now". This is totally untrue. BTL's could afford the FTB properties, and kept that segment of the market going by buying them up and upping the price as more and more investors came to the market.