Britons agree property is overvalued.

Graham_Devon

Like this article.

Sums up the last few arguments on here lovely!!

Average values have dropped by more than £35,000 from almost £200,000 at the beginning of the credit crisis almost four years ago, but prices remain too high, they say.

Home buyers blame a lack of affordable mortgages as figures show the percentage who think it has become more difficult to secure a deal has doubled in the past three months.

Banks have continued to tighten their lending criteria amid fears that high unemployment will lead to more home owners defaulting on their loans.

The latest price forecast index from property website Rightmove found 23 per cent of buyers are struggling to find a mortgage compared to 12 per cent during the previous quarter.

Only 15 per cent of the 26,000 people surveyed said house prices are too low. A total of 61 per cent of people in London said local prices are overvalued, 52 per cent in the South East and 53 per cent in the South West.

So what does Miles Shipside from Rightmove say?

Well, he states the absolute and downright obvious inconvinient truth. Sellers are simply deluded.

Mr Shipside warned: “There is the prospect of a market stand-off and rising unsold stock levels if sellers don’t wise up to the house price views of their target market.

“It’s not exciting for those owner occupiers hoping for their bricks and mortar investment to grow, but a sign of a sense of realism that the roof over your head is a home rather than a wealth play.”

Good article. http://www.telegraph.co.uk/finance/personalfinance/8473789/House-prices-overvalued-Britons-agree.html

julieq

Selective quoting strikes again. From the article:

"However, the same data found three quarters of respondents expect prices to either stay the same or increase during the next year, suggesting a mismatch between sellers’ expectations and what buyers are willing to spend."

These are the same respondents remember. So the thread could be titled "Britons agree property is overvalued, but don't believe prices will drop".

This is actually a complaint about mortgage rationing, not prices. People can afford repayments but can't get mortgages. Must be intensely frustrating if you expect prices to rise.

Really2

Glad to See Britain as now been defined as around 50% of people surveyed in London, South East and South West.

What country do I live in?

Graham_Devon

julieq wrote: »

Selective quoting strikes again. From the article:

"However, the same data found three quarters of respondents expect prices to either stay the same or increase during the next year, suggesting a mismatch between sellers’ expectations and what buyers are willing to spend."

These are the same respondents remember. So the thread could be titled "Britons agree property is overvalued, but don't believe prices will drop".

This is actually a complaint about mortgage rationing, not prices. People can afford repayments but can't get mortgages. Must be intensely frustrating if you expect prices to rise.

Would that suit Julie better then?

And now your telling people they are not actually atating houses are overpriced, they are actually complaining about mortgage "rationining"? That's not what they have said. But thank god julie is there to tell them they are wrong, and tell them what they are actually thinking and actually complaining about. What would we do without you Jules.

wotsthat

Graham_Devon wrote: »

It basically states "homeowners think low mortgage lending is to blame"....and basically goes on to state "most people thinks it's prices".

It actually states that home buyers think mortgage lending is to blame. Also most respondents thought that house prices would stagnate or rise.

Graham_Devon

wotsthat wrote: »

It actually states that home buyers think mortgage lending is to blame. Also most respondents thought that house prices would stagnate or rise.

That's very true. Made an error there.

Not for the first time, and won't be the last.

Loopgames

All this shows is that it was the bankers handing out too many mortgage deals that pushed prices up. Once banks have tightened this the prices have stagnated what a surprise.

So the house price inflation was due to too much 'free' money (by that I mean easy credit). What we are seeing is a slow down in increases at best or stagnation. Its momentum has run out of steam and may go down in price eventually. Especially if the banks continue tightening up their lending.

Further the interest rates are still very low - this will not last either and when these start to rise even slightly I do expect the momentum to start again for house prices - in the other direction.

geneer

Average values have dropped by more than £35,000 from almost £200,000 at the beginning of the credit crisis almost four years ago, but prices remain too high, they say.

But they only dropped £35000, so the bulls win. Obviously.

ess0two

Try the same survey up North.

LisbonLaura

Loopgames wrote: »

So the house price inflation was due to too much 'free' money (by that I mean easy credit).

Oh no!! - You can't say that! - Julie doesn't go there, & I believe you need her express permission before daring to mention it at all!

- It's a site seniority thing. At least she doesn't have her handle in caps, so we should be grateful for that at least.

It's shame we can no longer walk into B&B & grab £1,500,000 to buy half a block of flats, with free legal fees & a 5% cash back. Don't we all miss those 'good' times?

Really2

Loopgames wrote: »

So the house price inflation was due to too much 'free' money (by that I mean easy credit).

I would say it helped the bottom end of aspiring owners. But supply & demand is a factor also.

It amazes me how far houses haven't fallen, if it was just easy credit it would mean they would be far lower now.
Credit is tight yet houses seem oddly resilient, so the picture of easy credit being the only driver of HPI is a flawed one IMHO.

I suppose the other end of the argument is how far does lending criteria (average deposit etc) to come down before prices start to increase again when nutrallity seems to happen in the face of constricted lending and low transactions?
Would a average 10% -15% deposit put us back to above inflation HPI?