House prices fall as first-time buyer numbers plummet

de1amo

wasnt it a guardian article--i tend to think there is a lot of non mortgage based purchases.

StevieJ

AD9898 wrote: »

It's certainly possible for a lot of households. Let's not forget this is based on your hypothetical base rate of 3-3.5% which you claim could be the norm. Based on the last few decades, I'd be surprised if that was the case.

What is clear I believe is costs are certainly going to rise, when wages are falling in real terms. This can only be bad news for the housing market.

I bet you were surprised by 0.5% that was different to interest rates over the past 30 decades BTW the rates of the 1970-90's certainly weren't normal.

de1amo

if the bank rate is 0,50pc and i pay 2pc that is a mark up of,,,,,,,,, someone before was indignant of 3pc being 7pc

relaxtwotribes

All the banks and building societies are having to shore up their balance sheets with extra capital. That's extra capital that will need servicing with profits, which will come from increased lending margins and fees.
Higher mortgage rates translate into lower affordability and, therefore, lower demand from FTBs. Ipso facto, lower demand leads to lower prices.

geneer

AD9898 wrote: »

It clear there has been no collapse in prices

erm sure about that?

krazykidskate

The current trend of jobs all being fixed term contracts rather than permanent must be having an impact on FTB's - even if you can afford to borrow then your job isn't secure enough to get a mortgage. I haven't seen this mentioned anywhere but me and partner are both in this position.

Sibley

Without many forced sellers prices won't collapse, however it's clear to all that IR's are the 'finger in the dam' and as long as they stay low the market will hold steady on the back of atrocious approvals.

I don't think you understand so I'll explain.
We paid our mortgage easily at 6%. Never even thought of missing a payment.

Now it's dropped to 0.5%.
We are loaded with dough. it's put hundreds of extra £££££ in our bank every month.

Now rates will not rise to that level for years. Why on earth do you think there will be mass reposessions?

Thrugelmir

relaxtwotribes wrote: »

All the banks and building societies are having to shore up their balance sheets with extra capital. That's extra capital that will need servicing with profits, which will come from increased lending margins and fees.
Higher mortgage rates translate into lower affordability and, therefore, lower demand from FTBs. Ipso facto, lower demand leads to lower prices.

Extra capital will be generated by lending less at a sensible margin.

Banks will not be able to increase Tier 1 Capital ratios sufficently merely from profit retained after payment of both tax and dividends.

Demand will absorb the available credit.

The increased cost of borrowing will result in the average amount borrowed falling.

Resulting ultimately in affordable house prices again.

Logan002

[FONT=&quot]That’s really a great news to hear, especially for first time home buyers. Buying a house is the most common dreams in everyone’s life; it’s good that the prices in real estate have come down in a great way. It is a bad news for landlords, but good news for buyers. [/FONT]

Generali

StevieJ wrote: »

They were binned by the Sunday Times though.

Financial Times I thought....? Not that it makes a difference of course, they were binned by a national newspaper.