House price slump is already upon us

hallmark

Typically excellent article from Alistair Heath, easily the best financial journalist around (highly recommend checking out his archive, he doesn't often post on housing but all his stuff is top-quality):

http://www.cityam.com/news-and-analysis/allister-heath/house-price-slump-already-upon-us

Pimperne1

hallmark wrote: »

Typically excellent article from Alistair Heath, easily the best financial journalist around (highly recommend checking out his archive, he doesn't often post on housing but all his stuff is top-quality):

http://www.cityam.com/news-and-analysis/allister-heath/house-price-slump-already-upon-us

"Given that prices are bound to drop further, lenders will continue to insist on large deposits to protect themselves in case borrowers default – and of course it is these down-payments, combined with smaller loan to value ratios, which have put home-ownership out of reach for millions of people who could actually afford mortgage payments at current rates. But while having to pay exorbitant rents isn’t fun, the younger generation could yet have the last laugh: on current trends, they could end up paying significantly less for their first home when they finally manage to cobble a deposit together".

According to the three main indices Nationwide, Halifax and LR house prices are the same or more than they were in January (give or take a few pounds), how does that fit in with highlighted bit above. Had a look at some of this guy's previous work - he's pretty down on the housing market isn't he!

hallmark

Pimperne1 wrote: »

According to the three main indices Nationwide, Halifax and LR house prices are the same or more than they were in January (give or take a few pounds), how does that fit in with highlighted bit above.

If house prices are currently the same as in January then in "real terms" they are maybe 2% lower, a fall of £3k-£4K off the average house in just six months. I presume that's what he's getting at (plus he clearly expects some falls in actual prices too.

Pimperne1

hallmark wrote: »

If house prices are currently the same as in January then in "real terms" they are maybe 2% lower, a fall of £3k-£4K off the average house in just six months. I presume that's what he's getting at (plus he clearly expects some falls in actual prices too.

Yeah I thought he was deploying the "real" prices argument - that's going to be precious little good to the average FTB for a very considerable period. You're right, he clearly expects some falls in actual prices too but I don't see him giving any more justification than all those that have been wrong so far.

Sibley

Is it April fools day?
The article is rubbish. House prices are rising. All the crash talk is junk now. It's over. No more. We've heard enough.

You can't back it up. You lost.

Homeowners won the war.

abaxas

Sibley wrote: »

Is it April fools day?
The article is rubbish. House prices are rising. All the crash talk is junk now. It's over. No more. We've heard enough.

You can't back it up. You lost.

Homeowners won the war.

Great news, every index in own and finally your prove your madness.

You are Hamish's gay !!!!!! fluffer and I claim my right not never see any of the films.

hallmark

Sibley wrote: »

Is it April fools day?
The article is rubbish. House prices are rising. All the crash talk is junk now. It's over. No more. We've heard enough.

You can't back it up. You lost.

Homeowners won the war.

Why do so many people assume that anyone bearish on property doesn't own a house? Expand your mind a bit, & embrace the possibility that some people have an opionion that doesn't stem entirely from what they want/need to happen because they have/haven't bought a house.

abaxas

hallmark wrote: »

Why do so many people assume that anyone bearish on property doesn't own a house? Expand your mind a bit, & embrace the possibility that some people have an opionion that doesn't stem entirely from what they want/need to happen because they have/haven't bought a house.

Small correction for you.


"embrace the possibility that some people have an opinion that doesn't stem entirely from greed"

StevieJ

Is there something wrong with this part paragraph?

The UK housing market peaked four years ago, with the average property going for a record £199,612 in August 2007, before tumbling all the way down to £154,663 by April 2009, according to the Halifax. The average price is now £163,981, and has been fluctuating around that level for the past 11 months. In cash terms, the average UK house is back to where it was in June 2005 – the gains of the last six years have been entirely wiped away.

the_flying_pig

The interesting thing is what he says about the house price to average income ratio.

Argues that it won't go back down as low as the 3.1 of the 1990s due to insufficient homebuilding.

But that the current 4.5 is unsustainable.

Obviously on here the Hamishes of this world [at least implicitly] argue that a ratio of 5 to 6 is perfectly sustainable [and indeed inevitable].

Lots of guesswork all round.

black_taxi_2

daily express lives in a diff world