House prices could fall for several years

Thrugelmir

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 ?

The actual issue is whether people can afford to maintain the repayments.

As long as they can. Then it is homeowners that are affected by house prices and not the banks.

If house prices fell 25%, then there would a buying and investment opportunity for many.

Thrugelmir

Emy1501 wrote: »

You have been able to get 95% mortgages since the mid 90's and 1005 etc later on. The need for the young to save has not been necessary and it will take time for them to learn this.

It was possible to get 90 -95% mortgages in the early 80's.

Back then a MIG premium was payable on any borrowing over 75%.

However lending at this level was restricted to 2.5 to 3 times joint, or 3.5 higher plus 1 times lower.

Thrugelmir

HAMISH_MCTAVISH wrote: »

:rotfl:

I would normally ignore such blatant trolling by a disgruntled HPC-er....

But I can't resist point out that Capital Economics are even more of a laughing stock of the house price prediction world than HPC..... And that takes real work.

Only a dolt would cite CE as a credible source on house price predictions. So that tells us everything we need to know about your complete lack of any economic/financial understanding.

For reference purposes.........

One more time with the Capital Economics house price forecast history.....

The evidence says they have consistently been as wrong as it's possible to get.

BBC December 2002 - Capital Economics warned that the UK property market was severely overvalued, and that prices could fall by up to 30% over the next few years.

BBC October 2003 - House prices are set to fall by 20% in the next 18 months, a leading economics firm predicts. - Capital Economics argues that central banks in both the US and UK have fuelled the housing bubble by keeping interest rates deliberately low, and house prices are now at "dangerously high levels." It predicts that average house prices will fall from £135,000 in 2004 to below £110,000 in 2007, before beginning a more gradual recovery.

BBC September 2004 - Capital Economics is not predicting a sudden drop in prices, but a slow 20% grind lower over the next 2-3 years.

BBC May 2005 - Economic forecast group Capital Economics, which has predicted that house prices could fall, reiterated that the market had reached an "impasse", with buyers and sellers unable to agree on prices. "We expect the pace of the slowdown to pick up as the year progresses, in line with more gloomy reports from surveyors and housebuilders," Capital Economics said.

Independant Nov 2006 - Capital Economics Giving up on House Price Crash - Ed Stansfield, property economist at Capital Economics, said: "I cannot see 2006/2007 being the time we look back on and say 'yes, that was the start of the housing market crash'."

BBC April 2007 - Capital Economics Turns Bullish - Capital Economics, which in 2003 famously predicted that the UK was headed for house price falls of up to 20%, broadly agrees with Mr Boulger's upbeat analysis. "It gets to a stage when you can't keep saying a crash will happen while prices keep on rising," Ed Stansfield, analyst at Capital Economics, admits.

Gaurdian November 2007 - So, what are the experts saying about 2008? The bleakest assessment (if you are a homeowner, that is) comes from Capital Economics, which says it expects house prices across the country to fall by 3% during both 2008 and 2009.

(3% ? Is that all ? After years of forecasting 20 to 30% drops now Capital Economics is down to a absymally poor forecast of 3% per year for 2008 and 2009, AFTER house prices had already peaked and fallen ! )

Telegraph- November 2008 - "This housing market correction has already overtaken the 1990s crash and, with the economic slump deepening, it is set to get worse. Interest rate cuts will not be enough to stop the correction, nor slow the pace of house price declines. We expect house prices to fall a further 20pc in 2009," said Seema Shah, property economist at Capital Economics.

(and as we now know, prices rose in 2009 by a whopping 10% in the last 12 months)

Capital Economics are without a doubt the WORST forecasters in UK housing history.

So if they are predicting a 10% fall, it's safe to say prices will be rising.

The difference now is that the reasons for the unsustainable growth in credit are fully understood. The problem in the future is how to deflate the credit bubble.

Remember the fable of the hare and the tortoise......... Capital Economics may well be proved right.

HAMISH_MCTAVISH

carolt wrote: »

Given that Hamish bought at bot the previous peaks, by his own admission, I'm not quite clear why he thinks he's going to be right this time either.

Carol, my record, both of prediction and of buying houses, is demonstrably better than yours.

Where I live rent is more expensive than a full repayment mortgage.
Buying is an absolute no-brainer. The concept of "peak" is of no relevance, as renting is just a pure waste of money.

The first house I bought at "peak" has appreciated by 400% since. The second house I bought at "peak" (actually almost a year before peak) is already worth more than it was then. And it's saved me wasting over £40,000 in rent since.

Not buying at "peak" would have cost me an absolute fortune.....

Hamish? We'd be interested to know why you do think that.

I've been pretty consistently right about calling the direction of the market, the government interventions, the shortage of housing's impact on prices, etc, so far.

You've been pretty spectacularly wrong about the direction of prices throughout this event. Not to mention being wrong about buying for a couple of decades now. Neglecting to buy a house when they were cheap, and then moaning you can't afford one when they inevitably do go up in price. Missing out on the once in a lifetime buying opportunity of the 90's with house prices. And then missing out again on the once in a lifetime financing prices of the 2000's.

It is safe to say you will never see as advantageous a time to buy as you could have had, not once, but twice. In two different decades.

I took advantage of both those windows, and profited immensely by doing so. What's your excuse?

Graham_Devon

HAMISH_MCTAVISH wrote: »

I've been pretty consistently right about calling the direction of the market, the government interventions, the shortage of housing's impact on prices, etc, so far.

Sorry, that calls for this... :rotfl::rotfl::rotfl:

Since when did you tell us that prices would fall in Feb, and probably March.

You were just as surprised as the rest of us that houses were still rising in value in nov, dec and jan.

Feb came and you seemed to ignore every thread on the matter, apart from one post I think that I saw, claiming you were right.

carolt

HAMISH_MCTAVISH wrote: »

Carol, my record, both of prediction and of buying houses, is demonstrably better than yours.

Where I live rent is more expensive than a full repayment mortgage.
Buying is an absolute no-brainer. The concept of "peak" is of no relevance, as renting is just a pure waste of money.

The first house I bought at "peak" has appreciated by 400% since. The second house I bought at "peak" (actually almost a year before peak) is already worth more than it was then. And it's saved me wasting over £40,000 in rent since.

Not buying at "peak" would have cost me an absolute fortune.....



I've been pretty consistently right about calling the direction of the market, the government interventions, the shortage of housing's impact on prices, etc, so far.

You've been pretty spectacularly wrong about the direction of prices throughout this event.

No. I knew prices were going up in the early 2000's but couldn't afford to buy.

I then correctly predicted prices were going to fall in 2007, so decided not to buy - to stop actively looking - and prices did fall.

Not to mention being wrong about buying for a couple of decades now.

A couple of decades!! How old do you think I am?!!!

I was hardly going to buy whilst still in my teens or before leaving university. I then worked abroad.

Neglecting to buy a house when they were cheap, and then moaning you can't afford one when they inevitably do go up in price. Missing out on the once in a lifetime buying opportunity of the 90's with house prices.

Ha ha ha!! You are funny, Hamish. :rotfl:

And then missing out again on the once in a lifetime financing prices of the 2000's.

It is safe to say you will never see as advantageous a time to buy as you could have had, not once, but twice. In two different decades.

I don't think much of your crystal ball, Hamish. I prefer to use common sense.

I took advantage of both those windows, and profited immensely by doing so. What's your excuse?

See above.

nearlynew

All of McTittish's "predictions" are nothing more than repeating what is reported in the mainstream media.

He hasn't got a clue.

And is a very silly boy.

Mr.Brown_4

HAMISH_MCTAVISH wrote: »

Carol, my record, both of prediction and of buying houses, is demonstrably better than yours.

..and so on...

... for a while...

I thanked your post by accident - I was so enraged by it my finger was shaking on the mouse button.

So now I have to comment on it instead.

Hamish. How can someone who will put 20 hard earned in the pocket of someone they have never met, and who occasionally shows a chink of being a nice, funny, and basically decent person - spend their time spouting this sort of stuff.

It would be like me constantly having a go at the bulls and hoping their houses crash around their ears.

Er. Point made. I think.

StevieJ

Thrugelmir wrote: »

The difference now is that the reasons for the unsustainable growth in credit are fully understood. The problem in the future is how to deflate the credit bubble.

Remember the fable of the hare and the tortoise......... Capital Economics may well be proved right.

Probably, as they they keep changing their mind