The big price falls are over.

skap7309

ad9898 wrote: »

It's a bit like Wylie coyote in Roadrunner when he runs off the cliff, he should obviously fall straight away, yet miraculously and against all logic, he keeps running on thin air until he realises hes fooked, then he plunges to his doom.

Like it! Good analogy

ruggedtoast

As a regular I'm really shocked at your stance on this Ad.

Really2

Does this mean the 70% club have handed in their weapons for decommissioning or are they putting them in the bottom draw for later:)

Thrugelmir

Really2 wrote: »

I think personaly if I was looking to buy I would wait until fixed IR rates are near 3 month libor. That will be some indication that lending is somewere near normal.(basicaly the end of the financial mess)

That's an interesting comment. Could you expand on it.

LIBOR is being held down ( in fact propped by QE ) currently. Wholesale money market funding rates are moving upwards indepently of LIBOR. As institutions and companies other than banks park their fixed term deposits.

Really2

Thrugelmir wrote: »

That's an interesting comment. Could you expand on it.

LIBOR is being held down ( in fact propped by QE ) currently. Wholesale money market funding rates are moving upwards indepently of LIBOR. As institutions and companies other than banks park their fixed term deposits.

In normal times most decent 2Y-3y fixes were within 1% of three month LIBOR.

Basicaly at the moment they don't want to lend you money. But if you do want to borrow you are paying through the nose for it. (if you are in the belif prices will fall until lending is better now would not be the time)

But I think 5Y and 10Y are not that bad because in reality you should get to 5% within 10 years but I dear say a 10Y fix would not be cheapest over the life of the loan at the moment.

IveSeenTheLight

The_White_Horse wrote: »

With a 2 bedroom flat at 250k, that means it would only be able to be bought by someone on 62.5k a year. someone on that salary should be able to buy more than a 2 bedroom flat!!!!!

Things have to change.

£62.5 should be able to buy more than a 2 bed flat.
Maybe not in London though

The_White_Horse wrote: »

People are only managing because of 0.5% base rate. as soon as it goes up, there will be a collapse.

and you don't need any fancy graphs to know that. what goes up must come down. it is common sense.

People managed before in 2007 when the base rate was circa 5.75%
I believe there was less arrears and reposessions then.

since then house prices have come down along with interest rates.

I dont understand the theory thay people cannot afford house prices at £150k at 5-6% but they did when it was £180k at 5-6%

StevieJ

ad9898 wrote: »

It's a bit like Wylie coyote in Roadrunner when he runs off the cliff, he should obviously fall straight away, yet miraculously and against all logic, he keeps running on thin air until he realises hes fooked, then he plunges to his doom.

In this analogy, The 'cliff ' is the economy, and Wylie is the 'housing market'.

Don't know if you noticed but it is a cartoon Tom often gets a flat face after being hit with a frying pan :eek:

StevieJ

Really2 wrote: »

Does this mean the 70% club have handed in their weapons for decommissioning or are they putting them in the bottom draw for later:)

I think the defining moment was when Devon removed my forecast of -20% from his footer, hoping I would do the same ( he didn't admit that of course )

lemonjelly

I still think house prices are likely to reduce. I do doubt that they will plummet again though.

There are only 2 things I anticipate could cause plummeting. The advent of a buyers market (which to my mind, we still haven't had) and/or/combined with rising interest rates.

With all the forthcoming school/college/university leavers, there is going to be ever more competition for the limited jobs available out there.

FTB's will continue to be priced out of the market for quite some time.

The only moves/sales which will occur in the short term are forced ones - jobs, redundancy, death, divorce, etc.

In my mind, it ain't over until we get beyond the buyers market.

Thrugelmir

Really2 wrote: »

In normal times most decent 2Y-3y fixes were within 1% of three month LIBOR.

Basicaly at the moment they don't want to lend you money. But if you do want to borrow you are paying through the nose for it. (if you are in the belif prices will fall until lending is better now would not be the time)

But I think 5Y and 10Y are not that bad because in reality you should get to 5% within 10 years but I dear say a 10Y fix would not be cheapest over the life of the loan at the moment.

Which lenders still offer LIBOR loans?

The cost of money reflects the growing cost to the banks. Wholesale rates are rising. Fixed term deposit rates are rising. First direct now offer 5% on a regular savings plan.

Lending is not going to improve for a long long time. Unless we miracarously repay what we've already borrowed in record time.