A big house price correction appears to have started.

paulmapp8306

the lack of high LTV mortgages are not the only things keeping house prices down. The ammount of income isnt rising much and the cost of living is going up much much faster. Ultimately you could have 100% LTV mortgatges but unless you earn enough to service that mortgage after you food, utilities etc are taken care of then your either not going to get that mortgage or your going to default once you have it.

People are more aware of this now than in the last decade or two. Anyone who thinks availability of 95% LTV mortgages is going to have much affect is deluded - including the government. Thety will drive prices up a little as some who CAN afford to the paymetns can now get on the ladder, but for most its not the deposit thats the problem, its affordability.

reweird

nollag2006 wrote: »

My favourite HPC bit still has to be the 2003 clip, still on HPC.com, showing a couple of the illustrious founding fathers of that website on London Tonight proudly boasting how they had STR’d in 2002 and were going on a round the world trip planning to return to London in 2005 “when house prices had fallen back to a reasonable level”. Even at the bottom of the crash in early 2009, I don’t think London house prices fell back to the 2004 level.

Lovely to see them lose their shirt on that bet.

Their greed was suitably punished. Top one.

Running_Horse

A correction suggests there is some kind of correct level where prices should be. History suggests otherwise. I would love prices to be a their correct mid 90s level, but with so much pent up demand they are just as likely to reach their correct 2007 peak.

nollag2006

Running_Horse wrote: »

...with so much pent up demand they are just as likely to reach their correct 2007 peak.

True indeed

nembot

Pent up demand what exactly?

Transactions down to a third of peak, even with historically low interest rates... The mortgage money giveaway, has gone away.

Pent up demand... I know what Jim Royle would say

StevieJ

nembot wrote: »

Pent up demand what exactly?

Transactions down to a third of peak, even with historically low interest rates... The mortgage money giveaway, has gone away.

Pent up demand... I know what Jim Royle would say

I think that is what they are talking about.

Running_Horse

nembot wrote: »

Pent up demand what exactly?

All those people who were suddenly told to save up deposits? The following generation who will jump on government schemes to avoid deposits? The generation after who may find lending requirements not quite so stringent? Those waiting for prices to drop? Those renting from BTL landlords? Those young graduates who will have home owning aspirations? The skilled non-graduates who will have home owning expectations. Those with inheritances who want to invest in a place of their own? Those with parents who have done well out of property and now want to help their children? Those hardworking immigrants who have done well in this country?

Like it or not, most people want to own their own property. That pent up demand.

nembot

I'm sure there's the same demand right now, not really making much of a difference is it though to be fair?

IveSeenTheLight

nembot wrote: »

I'm sure there's the same demand right now, not really making much of a difference is it though to be fair?

Demand being desire and ability.

I wonder if desire is steadily increasing and only being limited by the ability to get a mortgage.

ukcarper

I agree that lack of high LTV mortgages are not the only thing holding prices down but contrary to what people will tell you it’s lack of deposit not salary multiples that is stopping people buying. I’m not sure the governments plan will make much difference as it seems like it will only apply to new build and as the banks have limited funds to lend they will find another way of limiting lending.