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MSE News: Halifax: house prices dive in record plunge
Comments
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Gillsman7 - why will people not sell their homes when prices are falling,
Exactly this has already been seen in London as people are reluctant to sell their property unless they absolutely have to as they don't want to take a loss. I spent a year looking for a property in the 250k mark and the market was woeful in that price range, there simply wasn't anything decent available. Demand far far exceeds supply here, you could argue that people should be happy to move to a property of equal or similar value even if those values are less than in the past but London has shown that it just isn't happening that way.
In my home country of Ireland where property prices have taken a massive hit, even more so than here, absolutely NOBODY is selling. Coupled with fears of losing a job, higher taxes etc, people in Ireland have battened down the hatches and won't be moving any place in the next few years, they're just riding it out. The market in home improvement has gone up though as people spend the bit of money they have on making the most of their home, but very few want to risk moving.0 -
breaking news............
base rate to rise to 2%
............................................
only joking ........ but imagine if they did!:rotfl:0 -
I am SO glad we managed to sell our flat when we did (May)! DH and I are living with his parents at the moment, which isn't easy, but news like this makes me feel better about it all!
I'm SO glad too, that we have just completed on the sale of my mother's house. We dropped the price a lot to sell it and upset the neighbours, but her money is now safe.
We have only just completed, so that sale price may factor in next months figures.RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
Read the sticky on the House Buying, Renting & Selling board.0 -
Reality check: Many people do not NEED to sell their houses and will rent it out or stay in their house to avoid selling at rock bottom prices. This means that fewer people put their houses on the market and demand starts to outstrip supply. This can, in theory, push prices back up.
So people thinking there is going to be a free-for-all on bargain basement houses are living in a dream land I'm afraid.
Spoken like a property speculator... or someone who isn't good at maths... or both.
I'll give you an illustrated example of why falling house prices can help sellers/buyers (in this example a growing family moving up the property ladder).
2-bed starter home current value £100k (mortgage paid off to make life easy)
4-bed semi-detached current value £200k
Mortgage required: £100k (total repayment £134k 20years @ 3%)
House prices 'crash' by 20% (arbitrary figure chosen to make the maths easy)
2-bed starter home new value £80k
4-bed semi-detached new value £160k
Mortgage required: £80k (total repayment £107k 20years @ 3%)
That 20% fall in prices has saved the family moving up the ladder £27k. Over £1k a year, enough to pay for the annual family holiday!:T
You are right that some people just won't sell, but you're wrong to assume they'll be able to move and rent their homes (it looks like banks will be required to have larger reserves, this means that lending will be tightened).
Falling house prices and low interest rates are good for FTBs and home owners (just so long as they aren't trapped by negative equity)."One thing that is different, and has changed here, is the self-absorption, not just greed. Everybody is in a hurry now and there is a 'the rules don't apply to me' sort of thing." - Bill Bryson0 -
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mustrum_ridcully wrote: »You are right that some people just won't sell, but you're wrong to assume they'll be able to move and rent their homes (it looks like banks will be required to have larger reserves, this means that lending will be tightened).
Don't forget that rents will be falling too, as the government is reducing the rent payments (LHA) in April. Falling rents and rising interest rates are a lethal combination for those who have little equity in their rented house. Plus the government are bringing in caps on the amount of rent they will pay and caps on the total amount of benefits they will pay. It's all very well people thinking that they won't let to DSS tenants, but that might be the only choice they have if they need the rent to pay the mortgage.
Don't forget also that the benefit, Support for Mortgage Interest (SMI) was cut in half this month, although welfare pays 4 weeks in arrears so it will be next month when this is felt. Plus the first of those who were only allowed SMI for 2 years, will have their SMI stopped from this January.RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
Read the sticky on the House Buying, Renting & Selling board.0 -
Aberdeenangarse wrote: »You don't even want to go there love. There's an awful lot of 'handbags at dawn' over on that forum. :eek:
More like straight jackets!"One thing that is different, and has changed here, is the self-absorption, not just greed. Everybody is in a hurry now and there is a 'the rules don't apply to me' sort of thing." - Bill Bryson0 -
mustrum_ridcully wrote: »Spoken like a property speculator... or someone who isn't good at maths... or both.
I'll give you an illustrated example of why falling house prices can help sellers/buyers (in this example a growing family moving up the property ladder).
2-bed starter home current value £100k (mortgage paid off to make life easy)
4-bed semi-detached current value £200k
Mortgage required: £100k (total repayment £134k 20years @ 3%)
House prices 'crash' by 20% (arbitrary figure chosen to make the maths easy)
2-bed starter home new value £80k
4-bed semi-detached new value £160k
Mortgage required: £80k (total repayment £107k 20years @ 3%)
That 20% fall in prices has saved the family moving up the ladder £27k. Over £1k a year, enough to pay for the annual family holiday!:T
You are right that some people just won't sell, but you're wrong to assume they'll be able to move and rent their homes (it looks like banks will be required to have larger reserves, this means that lending will be tightened).
Falling house prices and low interest rates are good for FTBs and home owners (just so long as they aren't trapped by negative equity).
Absolutely true. The majority of people will benefit from lower house prices. The ones to lose out would be those who want to downsize and the buy to letters who have bought several or even numerous properties as an investment.0 -
I think it's fairly obvious that the house price boom went too far and we're all paying a price indirectly right now.
The problem I think stemmed from the fact that there were little legal restrictions in place like some other countries have. With banks & building who loaned mortgages and were estate agents at the same time could tell you the house prices were anything they thought they could get away with charging and the envelope was pushed to the limit.... and it went just a little too far.
I mean some little semi worth half a million nicker??? ..... Several times what an average earner would make in his life!
The bankers and financial institutions made millions though.
I remember just before the financial crisis started back when Northern Rock were crumbling the bankers were waffling on about mortgages that would last 2 or 3 generations.... your children to complete them and so on.. :- yes they did come up with one as they realised that the house prices just could not keep on going up and up at the rate it was. ...
Projecting it just a few years ahead you could have a one bed flat selling at £2 million and only be earning £20,000 a year... that was a potential scenario ... £23,000 apparently is the median wage now isn't it? I think I read that somewhere recently but can't find the reference on the internet.
Quantitative easing is still eroding the true value of your money - you've only got to look at foreign currencies like the Aus $, Swiss franc, euro, gold to see that Brown & co with the Banks measures were like a pickpocket masquerading as a charity donor.
Yes house owners are all holding on to the top price their house was valued at and not dropping the price. But who is going to buy it?
When more people start losing their jobs with the cuts and the interest rates go up, more people will struggle to pay and repossessions will happen. This in turn will send prices down further.
So people with houses will just say well we’ll rent it out but again … who to?
The benefits office is capping the amount they will pay too as at the moment we all know will pay up to £2000 a week. This is set to be a max of £400 a week and I believe even this is too much.
So I think the rents will fall too.0 -
Im in the process of buying a house, havent got to the exchange part yet (formal mortgage offer agreed and everything), any one offer me some advice given todays news on the 3.6 fall in price? should I look to negotiate the whole 3.6 off. any advice appreaciated!!!
if prices had rose by 3.6% would be be running back to increase your offer!!!Saying Thank You doesn't cost anything :beer:0
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