can someone please answer this for me...

The_White_Horse

I am not a bear or a bull when it comes to houses. I think they are likely to just stagnate for a while.

anyway, i note that some think they are going up, and it is true that some people are asking higher prices than a year ago. some say we are back to 2007 peak prices. my friend who bought in Aug 07 for 380k had his home revalued at 325k two weeks ago. Its all up in the air.

anyway, if in 2007 lending was go go go, 100% mortgages available, credit freely available etc and now, it isn't and you need 25%, 30% even 40% deposits for top rates and no 100% loans, how can prices still be going up and up?

how can people still be being lent vast sums? it doesn't make sense to me.

please can someone please explain how house prices are still going up when lending is down, salaries generally are down and the mood is just down?

thanks

Really2

The_White_Horse wrote: »

I am not a bear or a bull when it comes to houses. I think they are likely to just stagnate for a while.

anyway, i note that some think they are going up, and it is true that some people are asking higher prices than a year ago. some say we are back to 2007 peak prices. my friend who bought in Aug 07 for 380k had his home revalued at 325k two weeks ago. Its all up in the air.

anyway, if in 2007 lending was go go go, 100% mortgages available, credit freely available etc and now, it isn't and you need 25%, 30% even 40% deposits for top rates and no 100% loans, how can prices still be going up and up?

how can people still be being lent vast sums? it doesn't make sense to me.

please can someone please explain how house prices are still going up when lending is down, salaries generally are down and the mood is just down?

thanks

Because it is done on like for like sales. not like for like no sales.

Some will have gone up some will have gone down it is done on averages not on valuations.

Is your friend remortaging or selling? If it is a remortgage it is not unusual for that to come out around 10% lower than a "sale figure".

My house was valued in the middle of the crash more than I purchased for (verbally by surveyor they would have approved more than my valuation by £50K).
But my house was never worth that just that the like for likes were so much more than my purchase price.

carolt

Because far less properties changing hands; they're now only going to the few with huge deposits and great credit ratings.

You couldn't keep prices at that level in a larger market, unless more and easier credit became available - or if we started seeing huge wage rises.

The_White_Horse

all i know is, there are family sized detached houses near me on the market for 900k-1m. Just bog standard family sized detached homes. Should be about 500k if you ask me.

I mean, what young family could move into these homes? They would need deposits of 200-300k at least and mortgages of 700k-800k.

These should be houses affordable to people earning say, 80-100k per annum. but they are not. you need to be earning 300k a year. its insanity. (and these are people whose previous equity is about 200-300k).

the whole thing is madness.

that said, i have been looking at houses in the 1,2 and 3m ranges and they are far better value for money. You can buy one of the detached 4 bedroom houses on a normal street for 1m or for 1.8m (5 minutes away in a nicer area) you can get what most would regard as a mansion, with 5 or 6 bedrooms, swimming pool, gated front, 2/3 acre grounds etc etc.

funny world.

kabayiri

The_White_Horse wrote: »

how can people still be being lent vast sums? it doesn't make sense to me.

please can someone please explain how house prices are still going up when lending is down, salaries generally are down and the mood is just down?

You don't really believe you can hide 20 billion freshly printed minty mint tenners down the back of the sofa do you?

Without someone noticing?

The outfits who work out the idea of printing those tenners, they are due a bonus for the idea (paid in tenners of course).

Then the idea needs selling to the press. Pay those nice PR people. What with? Here's a few thousand tenners.

Hang on, let's run the idea by the Rothschild clan, they know a thing or two about money. Send them a decorative basket of tenners for their troubles.

I bet if you ask any shop in London "got change for a tenner guv?" they'd laugh and shrug.

Really2

The_White_Horse wrote: »

all i know is, there are family sized detached houses near me on the market for 900k-1m. Just bog standard family sized detached homes. Should be about 500k if you ask me.

I mean, what young family could move into these homes? They would need deposits of 200-300k at least and mortgages of 700k-800k.

I would say the value of those means that perhaps your average person is not buying them.

You can buy a 3 bed semi nearly me for £120K ish.

But equally the £1M houses still need you to be on a massive wage so are not for your typical earner.;)

The_White_Horse

don't get me wrong, these 900k-1m houses are lovely. I just think they are asking too much, and wonder who is actually buying them - to be fair not many sales in the last few years. i think if you live there, you have peaked - unless you can get the 6 bedroom double fronted mansion with pool.

Really2

The_White_Horse wrote: »

don't get me wrong, these 900k-1m houses are lovely. I just think they are asking too much, and wonder who is actually buying them - to be fair not many sales in the last few years. i think if you live there, you have peaked - unless you can get the 6 bedroom double fronted mansion with pool.

People who can afford them, I presume to someone who can afford them they are at a price they are prepaired to pay.

I could not afford a £1m house so I think they are over priced for me but if someone buys one that certainly does not mean they are overvalued for everyone.

chucky

The_White_Horse wrote: »

please can someone please explain how house prices are still going up when lending is down

very easily - you only need a % number of people to be able to buy to keep house prices rising. it's probably only about 35%.

2008 lending did not support 2008 house prices
2009 lending supported 2009 house prices
2010 lending is supporting 2010 house prices

The_White_Horse

so basically, if no one in the country buys a house except for one person, who buys one house, then if he pays more for that house than it previously sold for, house prices will be rising. Is that correct?

Really2

The_White_Horse wrote: »

so basically, if no one in the country buys a house except for one person, who buys one house, then if he pays more for that house than it previously sold for, house prices will be rising. Is that correct?

Providing it is over inflation for that period also yes.

But you would argue 1 sale would not represent the UK as a whole for property prices.