House prices cannot "recover", simple common sense!

Austin_Allegro

The French eat and drink superbly, the Italians dress with impeccable elegance, the Germans drive fast cars and take over foreign holiday resorts, while the British...well our national pastime is getting into vast amounts of debt in order to 'own' tiny properties. It's just what we do and what gives us a sense of achievement and pride.

As Declan Curry once said incredulously when it was suggested house prices might fall, 'but this is the British property market we're talking about' in the same way someone in the fifth century might have said 'But this is the Roman Empire we're talking about' when told the Barbarians were at the gates.

The worst recession since the 1930s and a global economic collapse isn't going to stop that attitude overnight! So it's no wonder the hype and nonsense continue - what really matters is whether the economic fundamentals are there to support it.

Max_Headroom_3

Idiophreak wrote: »

Lol, I love that people suddenly have faith in the banks that they're not going to make the same mistakes again...Once buyers' confidence is back up, lending confidence will return, the multipliers will shoot up, the LTV will rise and banks will start remembering where they put their blind eyes. No, it won't be sustainable - but I don't think anyone really thought it was the first time round... Coupled with the continuing effects of BTL, immigration, shared equity and the rest...House prices will be higher than ever before we know it...

I think you're quite right about the banks in all but one tiny detail.

They don't have the money, or access to the money, to lend!

I am quite genuinely staggered by this bit though, do you really think so or are you just trying to get a rise?

Coupled with the continuing effects of BTL, immigration, shared equity and the rest...House prices will be higher than ever before we know it..

Max_Headroom_3

Austin_Allegro wrote: »

The French eat and drink superbly, the Italians dress with impeccable elegance, the Germans drive fast cars and take over foreign holiday resorts, while the British...well our national pastime is getting into vast amounts of debt in order to 'own' tiny properties. It's just what we do and what gives us a sense of achievement and pride.

As Declan Curry once said incredulously when it was suggested house prices might fall, 'but this is the British property market we're talking about' in the same way someone in the fifth century might have said 'But this is the Roman Empire we're talking about' when told the Barbarians were at the gates.

The worst recession since the 1930s and a global economic collapse isn't going to stop that attitude overnight! So it's no wonder the hype and nonsense continue - what really matters is whether the economic fundamentals are there to support it.

Spot on with that last bit (not sure I totally agree with the first bit, too many people nursing badly burned fingers). And they physically can't be, look at what happened last time they tried.

Idiophreak

Max_Headroom wrote: »

They don't have the money, or access to the money, to lend!

I am quite genuinely staggered by this bit though, do you really think so or are you just trying to get a rise?

Coupled with the continuing effects of BTL, immigration, shared equity and the rest...House prices will be higher than ever before we know it..

"having" money is somewhat an abstract notion in banking though, isn't it. From a homeowner's point of view, it's fair to assume that if a bank's still operating they "have" the money to lend you, the real variation is in their willingness to lend it to you.

"do you really think so" is a bit of an interesting question - to be honest, I know little about these things, but to my untrained eye, certain key groups of homebuyers have historically been blamed with driving up property prices - and these groups haven't significantly diminished in these times. I might be wrong, but I'd be surprised if 2007 is still the peak come 2020.

Max_Headroom_3

Idiophreak wrote: »

"having" money is somewhat an abstract notion in banking though, isn't it. From a homeowner's point of view, it's fair to assume that if a bank's still operating they "have" the money to lend you, the real variation is in their willingness to lend it to you.

It's certainly not abstract when the bank has to pay it back and can't, and fails (starting with Northern Rock and then rippling outward in a wave of economic catastrophe). Think the originators of those funds will be quite so keen to trust the AAA ratings and lend the same again? I don't.

"do you really think so" is a bit of an interesting question - to be honest, I know little about these things, but to my untrained eye, certain key groups of homebuyers have historically been blamed with driving up property prices - and these groups haven't significantly diminished in these times. I might be wrong, but I'd be surprised if 2007 is still the peak come 2020.

You may be right about certain key groups. Thing is, to push house prices up to the extent that happened last time you don't need certain key groups doing it, you need everyone doing it, and you need virtually cast iron "prices only rise, it's a one way totally secure bet" mentality. I don't think we have that anymore. I also (as above) don't think we have the finance to support it even if everyone did wake up tomorrow with the last 18 months erased from their collective memory.

ad9898_3

ILW wrote: »

Location, Location, Location.

Talking of the above, those couple of ramping tw@ts are back on the screen this week, and for the next 13.:rolleyes:

the_ash_and_the_oak

carolt wrote: »

But are there are enough of them with jobs, good credit records and deposits?

Transaction levels say no

Thrugelmir

Idiophreak wrote: »

Lol, I love that people suddenly have faith in the banks that they're not going to make the same mistakes again...Once buyers' confidence is back up, lending confidence will return, the multipliers will shoot up, the LTV will rise and banks will start remembering where they put their blind eyes. No, it won't be sustainable - but I don't think anyone really thought it was the first time round... Coupled with the continuing effects of BTL, immigration, shared equity and the rest...House prices will be higher than ever before we know it...

You are refering to banks that have gone..........

Northern Rock, B&B, Abbey, A&L, GMAC, Halifax, BOS, Lehmans, plus all the other sundry sub prime lenders.

Between NR, B&B and HBOS you've got the main culprits for unsustainable lending. Around 40% market share in the peak years.

The landscape is now somewhat changed. So no chance of a repeat.

The banks that survived did so for a good reason. So don't expect them to advance cheap credit.

mizzbiz

I'm really curious about the 'snapping up bargains' viewpoint.

How can a house that sold for £25k in 1999, sold for £92k in 2007 and now worth £85k be a 'bargain'?

It would possibly stretch to be a bargain if it was around £30k, but not at more than treble it's price 10 years ago. I agree with PN that SH*t houses cost more now than very, very nice ones did not an awful long time ago.
My father earned £35k in 1999, he's certainly not earning £105k in 2009, so again I agree with Max - somethings got to give or laons are getting bigger and bigger. We only live so long so after they've doubled the mortgage term from 35 to 70 years, what other ways are there to lend people more money to ensure house prices go UPUPUP?

Cleaver

mizzbiz wrote: »

I'm really curious about the 'snapping up bargains' viewpoint.

How can a house that sold for £25k in 1999, sold for £92k in 2007 and now worth £85k be a 'bargain'?

Okay, well for us late twenty somethings who have maybe have a vague interest in property ten years ago, then a desire to buy maybe 6 to 8 years ago, all we've seen is rise, rise, rise. For the first time ever in our buying life, we've seen a drop. And a considerable one.

The media and public sentiment of "they'll never drop" suddenly isn't the case now. So maybe 'bargain' isn't the word, but seeing something suddenly a lot cheaper than you maybe ever thought it would be is quite a strong lever to buy, I imagine.