House prices could fall for several years

globalds

Just a quick question :
If house prices were to fall by say for example 25%
How would that effect the banks
So I suppose it is 2 questions .
If they fell fast ...How would that affect banks ?
If they fell slow .. How would that effect banks ?

HAMISH_MCTAVISH

Joeskeppi wrote: »

Haha, which mod?

Jason.:D

I rather suspect one or two more have as well, but don't want to admit it.

HAMISH_MCTAVISH

globalds wrote: »

Just a quick question :
If house prices were to fall by say for example 25%
How would that effect the banks
So I suppose it is 2 questions .
If they fell fast ...How would that affect banks ?
If they fell slow .. How would that effect banks ?

They did fall by almost 25%, and we saw exactly what happened to the banks.

Another 25% fall would be utterly destructive to the banks and the wider economy.

Which is why, as we have seen, governments will do whatever is required to avoid such a scenario.

Emy1501

HAMISH_MCTAVISH wrote: »

They did fall by almost 25%, and we saw exactly what happened to the banks.

Another 25% fall would be utterly destructive to the banks and the wider economy.

Which is why, as we have seen, governments will do whatever is required to avoid such a scenario.

The problems with RBS and HBOS had nothing to do with prices falling here by 25%

Emy1501

Nobody knows

1) What effect ending the stamp duty holiday will have on the market
2) Whether the cash rich, bank of Mum and Dad will be about to support the FTB market for the year ahead
3) Where the economy will go over the next year.
4) where interest rates will be in the next 6 months
5) who will win the election and what effect this will have on the market.

I'm sure theres more. There are too many ifs, buts and maybes to really predict what going to happen this year and thats why many have gone for the safe bet of saying it will be flat.

ukcarper

Emy1501 wrote: »

Nobody knows


2) Whether the cash rich, bank of Mum and Dad will be about to support the FTB market for the year ahead

Is it a fact that more parents are helping their children with deposits now?

phil_b_2

House prices will be flat or thereabouts for a long while now, until everything else catches up. They wont crash, the powers that be will see to that. There are far too many powerful and wealthy people about to let the average joe house-buyer wannabe get their way.

Emy1501

ukcarper wrote: »

Is it a fact that more parents are helping their children with deposits now?

The CML have said that the First time buyers market is pretty much exclusive to the Rich, those with the bank for Mum and dad for help, STR's and those who have divorced.

The days where genuine FTB's used their own money to buy their first home is pretty much over now mainly due to few being able to find the deposit to get on the market. Before 125%, 100%, 95% mortgaes were available etc.

carolt

phil_b wrote: »

House prices will be flat or thereabouts for a long while now, until everything else catches up. They wont crash, the powers that be will see to that. There are far too many powerful and wealthy people about to let the average joe house-buyer wannabe get their way.

Is that so?

So in previous crashes, where did all the powerful and wealthy people go?

It's not much of an argument, is it Phil.

Gorgeous_George

Falling prices are disastrous for the banks. All those lovely secured loans that won't be errrm.... secured. People would choose to be repossessed rather than being stuck paying most of their wages for something that is losing value faster than they can earn it.

On the whole, I'd settle for prices remaining constant and inflation curing teh affordability problem. However, this is unlikely - prices are more likley to fluctuate up and down depending on the season/feel good factor but the trend is likley to be downwards.

Here's hoping anyway.

GG