MSE News: Nationwide: house prices continue to drop

rickbonar

hey where's my post gone?

baby_boomer

As a teacher I am "looking forward" to three years of no pay increases.

Two years of no rise, and the third year of a rise that will be wiped out by an extra 3% pension contribution. Tax bands are not going to rise as in previous years.

In the meantime fellow teachers will face the following extra demands:-

Food price inflation
Extra 2.5% VAT from January
Extra National Insurance
Inflation busting rail fare increases from 2012
Saving for offspring going to university so that they don't end up £60K in debt
Rising mortgage rates once interest rates move up from 0.5%

And we're the lucky ones because we've got jobs!

Anyone fancy a hike in the price of oil in the meantime?

No wonder house prices are wobbling.

DervProf

baby_boomer wrote: »

As a teacher I am "looking forward" to three years of no pay increases.

Two years of no rise, and the third year of a rise that will be wiped out by an extra 3% pension contribution. Tax bands are not going to rise as in previous years.

In the meantime fellow teachers will face the following extra demands:-

Food price inflation
Extra 2.5% VAT from January
Extra National Insurance
Inflation busting rail fare increases from 2012
Saving for offspring going to university so that they don't end up £60K in debt
Rising mortgage rates once interest rates move up from 0.5%

And we're the lucky ones because we've got jobs!

Anyone fancy a hike in the price of oil in the meantime?

No wonder house prices are wobbling.

If teachers are so good at their jobs (and therefore worth a better pay increase in the current economic environment), I`d have more qualifications, and be earning more than I do.

A recent venture into further education, has educated me that teachers are not all they are cracked up to be. Are exams getting easier ? Probably not, but those who mark the exams are.

Kenny4315

I see a bit of a short term downturn maybe around 10% to 12% down, but no gloom and doom crash, by the end of 2011 I reckon we'll be around the same as now maybe slightly down say 5% or so but nothing significant, in absolute terms, so in real terms the boom is being eroded away with time. Nothing really to worry about if your a homeowner, or a BTLer, potentially with good timing a good price maybe obtained to move up the ladder, get on the ladder, or expand the BTL portfolio.

London may have a bit of a rougher time than the market as a whole, as it is substantially/ridiculously more expensive than elsewhere.

davester

The house prices are too high thanks to the Labour government and letting the banks give out stupid morgages on houses. The banks thought a great way to get money was to loan people more money than they could afford, and offered 5+ times peoples annual salary, this meant that more people had more money to blow on a house and so the price of houses shot up because of the amount of money being given. Before this the morgage you could get was 3 times 1 persons salary, which in todays average wage would be £72k for a house price, but instead they threw 100+% morgages at people so now we have houses at almost £100k more than they should be. Banks didn't care cause they would take your house when you couldn't repay sell it at whatever and then say you still owe them X amount outstanding.

Banks are now being careful about how much they give out AGAIN, and so people don't have the money to buy a house. Thus house prices are dropping. They will drop down to the level at which Banks will offer as a morgage as people will have very little in savings to use as a deposit.

Davesnave

DervProf wrote: »

If teachers are so good at their jobs (and therefore worth a better pay increase in the current economic environment), I`d have more qualifications, and be earning more than I do.

A recent venture into further education, has educated me that teachers are not all they are cracked up to be. Are exams getting easier ? Probably not, but those who mark the exams are.

If teachers had been better, I might have written 'A Brief History of Time.'

And there again.....

Be careful where you point that thing; the grammar police are never far away.

des_cartes

baby_boomer wrote: »

As a teacher I am "looking forward" to three years of no pay increases.

Two years of no rise, and the third year of a rise that will be wiped out by an extra 3% pension contribution. Tax bands are not going to rise as in previous years.

In the meantime fellow teachers will face the following extra demands:-

Food price inflation
Extra 2.5% VAT from January
Extra National Insurance
Inflation busting rail fare increases from 2012
Saving for offspring going to university so that they don't end up £60K in debt
Rising mortgage rates once interest rates move up from 0.5%

And we're the lucky ones because we've got jobs!

Anyone fancy a hike in the price of oil in the meantime?

No wonder house prices are wobbling.

Apparantly 'you will have got over it' by spring 2011 and you will be rushing to buy a new house before prices go up due to everyone else having 'got over it' by then.

rickbonar

Looking at the Halifax monthly price drop recently it doesn't really to tie in with what Nationwide have come up with this time.
Why is this? I suspect that too much emphasis is given to monthly variations especially when sales are way down across the board. I do see a number of estate agents premises empty though.
Clearly Halifax and Nationwide have to talk up the market and both have their own slightly different way of compiling figures.

As said previously the only true guide is the land registry figure which records actual sales but lags by some months.

Property as an investment has been a great one for many unexpectedly makings tens of thousands of £s but looking at overseas markets where there are more regulations to stop bank/lenders/estate agents controlling the market for their own ends the prices are much more modest.

Housing benefit is to be cut (at last) which at the moment landlords can exploit to become rich very quickly. At one time the HB used to pay whatever the landlord asked. So you could have a scenerio of someone on the dole getting £65 a week to live but have his housing paid to a landlord for £350 per week rent no questions asked. Spot the scrounger?

I think this will have an impact on the house price situation as well as redundancies and bankruptcies.

MiserlyMartin

LauraW10 wrote: »

Useless Tories - they should have supported the housing market

What are you talking about? They already are - unfortunately - by maintaining these stupidly low interest rates.

Rates need to rise I wish they would see sense (MPC members) and put them up. They are trying to save the housing market by keeping rates so low but inflation is way above target so with little payrises everyone can't afford to buy the overpriced houses anyway.

rickbonar

RenovationMan wrote: »

How will putting up interest rates control inflation?

I think the theory goes that the higher the interest rates the less spare cash people have to spend on goods. So spend less in shops and services.
If interest rates are low then that is supposed make people spend more and if it goes too much then a market driven situation the more demand the higher the prices go... inflation..

I know prices are rising anyhow but that's possibly an effect of quantative easing in relation to import and exports and the slow de-valuation of the £. I know Brown and co were seeking parity with the Euro to persuade us to join. Thankfully we didn't.

We are in an economic slump at this time so that's why the interest rates are low. If spending increases then they'll put the rates up but I think it's telling the true story of the economy now.