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Debate House Prices
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The bear case
Comments
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a decent post
this bit is what most of the 'bear' community miss - the house price drops weren't brought on because of lack of affordability but due to to credit drying up.
the real affordability issue is way off and will only be apparent when it becomes cheaper to rent long term than buy. this is years, for now there is enough desire to buy. where there is a will there is a way...
Affordability and credit go hand in hand. Doesn't matter whether one can afford a loan if no one will give the credit. The market over the last year has been based on those with lots of cash allowing them to put down big deposits combined with people putting off selling in the hope the market would take off again.
Round my way it seems credit is drying up again. Agents are constantly ringing about properties and chasing up feed back on viewings. Something they did not need to do this time last year.
Things are going to be difficult going foward unless lax lending practises make a come back.0 -
not sure what point you're making that is different from mine... apart from stating the obvious that unless banks lend, people can't buy a house for outright cash. that's not exactly news is it...Affordability and credit go hand in hand. Doesn't matter whether one can afford a loan if no one will give the credit. The market over the last year has been based on those with lots of cash allowing them to put down big deposits combined with people putting off selling in the hope the market would take off again.
Round my way it seems credit is drying up again. Agents are constantly ringing about properties and chasing up feed back on viewings. Something they did not need to do this time last year.
Things are going to be difficult going foward unless lax lending practises make a come back.
credit enhances affordability - they are exclusive.
if you have a salary, you don't have the affordability to buy - finance provides that affordability.0 -
Graham_Devon wrote: »
What's the "way" now. What's going to give people the means now? Obviously, going to work, earning an average wage to buy an average house isn't going to work with prices as they are.
So what's the new system? Is there one?
Chucky?!
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i didn't realise that you wanted an answer.Graham_Devon wrote: »What's the "way" now. What's going to give people the means now? Obviously, going to work, earning an average wage to buy an average house isn't going to work with prices as they are.
So what's the new system? Is there one?
IMO the answer is a diluted version of what we had before until the credit markets pick up. only those that fit the criteria and can get the funding will be able to buy. the eventual answer is that these people will reduce in number - it will come to point where there are bigger issues than now, that's when UK property will have a lot of questions to answer unless liquidity returns to the credit market - when it won't really be an issue but hidden away for resolution in the future.
only a certain number of sales transactions needs to go through for there to be house price inflation as has been seen for the last 16 months. you won't agree with this but that's the demand and supply peice.0 -
not sure what point you're making that is different from mine... apart from stating the obvious that unless banks lend, people can't buy a house for outright cash. that's not exactly news is it...
credit enhances affordability - they are exclusive.
if you have a salary, you don't have the affordability to buy - finance provides that affordability.
Point I'm making is that regardless of whether one can pay the monthly repayments etc. The lack of available credit is going to cause a problem in the next 6-12 months if what I am seeing continues. Those driving the market with large deposits at lots of cash are drying up outside the main hot spots.
The reality is there are lots of people who want to buy and can afford the monthly payments but lack of deposit or not being credit worthy is the issue.0 -
that's the new reality, get a good deposit together then buy - the other option is going back to 95% mortgages for everyone who applied.The reality is there are lots of people who want to buy and can afford the monthly payments but lack of deposit or not being credit worthy is the issue.
it's ironic that the same people that complain about lax lending are the ones that are complaining now that deposit level are too high.0 -
i didn't know what it was either. just googled it. HMO = housing multiple occupants.
Like students?'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
that's the new reality, get a good deposit together then buy - the other option is going back to 95% mortgages for everyone who applied.
it's ironic that the same people that complain about lax lending are the ones that are complaining now that deposit level are too high.
No one was complaining.
Just stating something.
Loads of people stuck, while saving up, isn't going to help prices shoot up.0 -
that's not a bad thing and part of the irony. people complain about lax lending and it's resulting HPI but don't like the current lending with high deposits and lower HPI.Graham_Devon wrote: »No one was complaining.
Just stating something.
Loads of people stuck, while saving up, isn't going to help prices shoot up.
what people don't realise is that:
when house prices are low, finance is more expensive and difficult to get.
when house prices are rising is when finance is cheap and easier to get.0
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