Lack of supply boosting prices...

smeagold

Sibley wrote: »

Found this accurate article:

Really is getting silly now. Do any of the bears really think prices will drop 70%?:rotfl:

http://www.bloomberg.com/news/2011-01-17/u-k-home-asking-prices-rise-as-property-supply-shortage-props-up-values.html

In real terms, in real money, it already did:





:rotfl:

IveSeenTheLight

smeagold wrote: »

Affordability. People can demand all they want but if they can't afford they can't buy.

Demand equals deisire and abbility.

Demand is not only desire

WHITEVANMAN

Sibley wrote: »

Over the last few years I've seen every graph and heard every reason why house prices are going to drop next month etc.

They never have. Houses in SE especially Kent and South London have risen. Homeowners refuse to drop prices and there are no decent homes in EA's cheap.

That's fact.

Of course the SE is a premium area, but isnt representitive of the whole market.
Certain areas of south London, have been notoriously cheap in the past, and slow to maintain pace with other areas, recent regeneration programs have begun to make these areas a little better to live in and more attractive prospects and the prices have been steadily increasing as buyers continue to seek good value.

Kent is another example of this regeneration, and therefore value is being realised, where it wasnt before.

Homeowners arent reducing their prices, because they have large mortgages, if they want to move today, with much more restraint being applied by lenders, homeowners need bigger deposits in addition to cover for their current mortgages and new mortgages require much smaller LTV's to get good rates, and with surveyor valuations being less optimistic this can keep many out of the market.
The market is slow and there are few good properties going cheap because those that cannot afford to move are waiting and waiting and those that can take what they can.

Asking prices in some of those areas have slumped in the last 3 years, some have ticked up again a little but are not anywhere close to where they were at peak.

In the last three years ive sold a 3 bed semi in SE london at a 15% discount after being on the market for a year, when in 2007 I had an offer 17% higher than it went on the market for in 2008.

In 2010 I sold a 2 bed semi in Greenhithe North kent at its 2007 price after a bidding war which took it over asking price by 10%, yet in 2008 its value had dipped to 20% lower than its 2007 peak.
It was one of the only two bed semi's of its size and quality on in the area at the time and the smaller 2 beds were in my opinion overpriced in comparison.
I witnessed similar properties in the area sold in 2009 going at much less than premium and less than asking, in general asking prices there are still behind peak, and actual sale prices lower still as the area has now seen a rise of properties on sale at speculative prices, yet in reality the number of buyers is flat and more properties are on and for long periods, many later withdrawn.

I also bought a good 2 bed EOT in Esher for £75k under ask in 2010, and a 3 bed terrace in lewisham SE london is still about 50k short of its 300k peak, again this is was lower and has ticked up a little, but has remained flat over the last year.

In my dealings in the south east Ive experienced many sellers clearly holding out in hope, rather than reality, many are still on over a year later.

My 3 bed family home in the NW however is 30% lower in value than peak, and is fairly representitive of the market here.

Im not saying a crash is immeninent, but am definately not expecting any significant rises in the next 18 months.
Lenders are holding on to funds tightly, keeping the flow of purchases at a low level which is to some extent is helping keep prices flat and not declining, when interest rates increase, im sure these lenders will be lending a little more freely which may increase prices gradually, but that will likely be curbed by those who will find it increasingly difficult to meet payments, especialy as further government cuts come into effect and public sector workers begin to lose there jobs.

These effects will be felt less in the SE and have greater effect on other areas as that is the nature of the beast, to expect any significant market increase for the foreseable future would be foolish, the current lack of supply of affordable property is IMO only keeping prices flat at best in all but premium areas.
Inflation, job losses, austerity measures and interest rate hikes arent likely to have much positive effect on Prices, and likely have a greater increase on supply in future as well as constricting an increase in growth of buyers, especially those who will pay premium.

Percy1983

i can see how demand will reduce as prices lower, but at what ever point it starts to rise sais sellers who didn't want to sell at a price below X will find there house is now worth X and try and sell.

In short lower prices may restrict supply, but higher prices will feed supply, so its just where the 2 meet.

bendix

HAMISH_MCTAVISH wrote: »

Short supply is a result of a decade of underbuilding, leading to a million house shortage getting worse by 150000 houses a year.

Population is growing by 400000 a year, we add 250000 households but build only around 100000 houses.

That's why we have a shortage, and that's why prices here held up so well and are now just 10% below peak despite artificial leading restrictions cutting 70% of mortgage funding.

No McTavish. The short supply referred to in the article refers to the short supply of houses being offered on the market, largely - one suspects - because most punters don't want to sell when prices are falling.

People are moving less. They are moving only when they have to, not - as in previous years - to lock in on a rising price.

bingobob777

Asking prices?

oooooohhhhhhhhh!

geneer

What Simpley and Spamish just don't get is that is lack of sales also boost prices (in a meaningless way).

I'll leave it to these two einstein to figure our of nothing selling and no one buying is super dooper for homeowners who want to move.

nembot

The number of properties for sale has risen over 35% in the last 8 months, this is a fact.

Perhaps you should post your wishful thinking somewhere else Sibley, avoid the ridicule?

Bears 1 - 0 Sibley

Sibley

No way.

It's not wishful thinking. Nobody can say prices have dropped until every property in an EA window is down. There has always been the odd cheap place here and there.
Sellers won't drop the price and when credit becomes available again FTB will pile in. You wait and see.

abaxas

Sibley wrote: »

No way.

It's not wishful thinking. Nobody can say prices have dropped until every property in an EA window is down. There has always been the odd cheap place here and there.
Sellers won't drop the price and when credit becomes available again FTB will pile in. You wait and see.

The 'I shag ladyboy's bottoms' defence, never ends well.