House prices fall as first-time buyer numbers plummet

HAMISH_MCTAVISH

doire wrote: »

And the problem for FTB is not mortgage "rationing" but that prices are way too high for the average FTB.
.

And yet in 2007, when prices were higher than today, and interest rates were higher than today, several hundred thousand more FTB's could buy than can today.

Blindingly obvious that price isn't the issue, other than for a few extremist nutjobs on here and hpc.

wherediditallgothen

HAMISH_MCTAVISH wrote: »

And yet in 2007, when prices were higher than today, and interest rates were higher than today, several hundred thousand more FTB's could buy than can today.

Blindingly obvious that price isn't the issue, other than for a few extremist nutjobs on here and hpc.

Not sure how you work that one out? The way I see it, BOTH price and the ability to obtain finance are at fault. You could argue that if prices were lower it would be easier to get the finance.

But to just make a blanket argument that price isn't anything to do with the issue is ludicrous.

Sibley

I had a look on HPC today.
It's even more mental than before.

Now they start big drop stories and have no bulls commenting. They were all saying ' Do you remember when the bulls would have said this and that. Now they are quiet' :rotfl:

Err... anyone who didn't agree that prices would drop 90% was banned mate. Let a few bulls back on there if you want a right hammering.

shortchanged_2

HAMISH_MCTAVISH wrote: »

And yet in 2007, when prices were higher than today, and interest rates were higher than today, several hundred thousand more FTB's could buy than can today.

Blindingly obvious that price isn't the issue, other than for a few extremist nutjobs on here and hpc.

It was called lax lending HAMISH if you hadn't heard of it and it's sort of what got us into this mess in the first place.

It will be the first time buyers that bought then that are most likely going to be the ones who will be in the sh** when interest rates rise, as they find themselves in negative equity combined with interest rate rises and austerity measures.

baby_boomer

Why wouldn't house prices fall?

Yes there are too few homes for our growing population BUT:

1) Taxes, national insurance and pension contributions are rising over the next three years
2) Food and fuel prices are going up
3) Wages are not going up as fast as either 1) or 2)
4) Graduates - the next generation of first time buyers - are going to have an extra £18K of debt from 2015.
5) Banks and BSs are much more cautious about lending
6) Unemployment is rising

FTBFun

krazykidskate wrote: »

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.

?

I can tell you my firm definitely doesn't do fixed term contracts for most of the staff. It might just be in your sector(s).

Linton

baby_boomer wrote: »

Why wouldn't house prices fall?

Yes there are too few homes for our growing population BUT:

1) Taxes, national insurance and pension contributions are rising over the next three years
2) Food and fuel prices are going up
3) Wages are not going up as fast as either 1) or 2)
4) Graduates - the next generation of first time buyers - are going to have an extra £18K of debt from 2015.
5) Banks and BSs are much more cautious about lending
6) Unemployment is rising

On the other hand...

1) At the moment prices are constrained by the absence of buyers who are constrained by the decrease in mortgage availability. When the mortage availability is improved there will be an upward pressure on prices.

2) It is quite possible that wages and employment will improve in the medium term future.

3) Many sellers have an option to delay selling, thus reducing housing availability.

4) Decrease in FTBers means increase in renting. This leads to increase in rents and increase in BtL.


So there are pressures in both directions which is why many of us are predicting a stagnant market.

baby_boomer

Linton wrote: »

On the other hand...

1) When the mortage availability is improved there will be an upward pressure on prices.

That'd happen at the same time as the point we somehow both omitted.

7) Interest rates will rise (at the same time that banks & bss keep their margins at high levels in order to rebuild capital to meet new regulatory requirements.

DervProf

HAMISH_MCTAVISH wrote: »

And yet in 2007, when prices were higher than today, and interest rates were higher than today, several hundred thousand more FTB's could buy than can today.

Blindingly obvious that price isn't the issue, other than for a few extremist nutjobs on here and hpc.

Price isn't the issue if the lending taps are turned on. Blindingly obvious if 2003-2007 was anything to go by.

So what if IRs were higher in 2007 (although I suspect that actual borrowing rates were not too far different than they are today) - when base rate was 3.5%( or was it 4%), weren't FTBs able to get ~4% deals ? What deals are on offer to FTBs today ?

2007 - you've got a pulse ? you've got a job ? you've got a 5% deposit ? Here's your mortgage ! (Even if you haven't got a deposit, I'm sure we can help).

Today - You've got a job ? You've got a 12% (£15K) deposit ? Here's your mortgage !

In fact, I reckon FTBs were paying LOWER rates in 2007 than they are today.

HAMISH_MCTAVISH

DervProf wrote: »

So what if IRs were higher in 2007 (although I suspect that actual borrowing rates were not too far different than they are today) - when base rate was 3.5%( or was it 4%), weren't FTBs able to get ~4% deals ? What deals are on offer to FTBs today ?
.

Base rates reached 5.75% in 2007.

The best widely available deals for FTB's were more like 6.5%.