A big house price correction appears to have started.

RenovationMan

shortchanged wrote: »

I don't think many of them think there is no demand or desire as such but the lack of ability to buy a house in the current circumstances.

As you well know the rocketing prices a few years ago were fueled by loose lending practices, self certs, 6x+ income multiples, IO mortgages handed out to any Tom, !!!!!! or Harry.

Obviously if there is the fuel for the fire the fire will sustain and grow if you add more fuel.

Now unfortunately Mr Credit Crunch (the fire extinguisher) has come along and dampened the fire down and cut off the fuel supply.

Now with house prices staying still relatively too high, the desire cannot turn into ability because there is a lack of adequate fuel to put back on the fire. Hence the reason for the woefully low number of first time buyers; http://www.bbc.co.uk/news/business-15887612.

So this is the problem RenoMan in that desire, demand and ability are very different things.

What we do have is probably a still high level of desire to buy but the demand is stiffled because there is no ability to fuel the demand.

From what I have seen on this board and from what has been reported on HPC, all the bears have large deposits, some large enough to buy houses outright, and so arranging funding shouldn't be too arduous. As the members of both of these sites represent an extremely small population compared with the wider UK, you could extrapolate that out and see a huge cross section of people with large deposits who could buy at a moments notice but who are holding out until the economy stablises.

Well, unless the following two scenarios are true:

1. The only people in the UK with large deposits and able to buy a house right now are members of property forums. No one else.

2. No one in the UK has a large deposit and no one is waiting to buy, it's all a fantasy.

Flight2quality

RenovationMan wrote: »

From what I have seen on this board and from what has been reported on HPC, all the bears have large deposits, some large enough to buy houses outright, and so arranging funding shouldn't be too arduous. As the members of both of these sites represent an extremely small population compared with the wider UK, you could extrapolate that out and see a huge cross section of people with large deposits who could buy at a moments notice but who are holding out until the economy stablises.

Well, unless the following two scenarios are true:

1. The only people in the UK with large deposits and able to buy a house right now are members of property forums. No one else.

2. No one in the UK has a large deposit and no one is waiting to buy, it's all a fantasy.

I would estimate the number of people with large enough deposits to buy now but holding on are few and far between. I think most have already bought and are going to be disappointed as values fall and they get into neg equity.

There are millions and millions in this country who would love to buy but can not raise the deposit or get the mortgage approved. Not just those on low incomes but even average incomes with a little savings try applying for a mortgage and the computers just says no!

This is while we still have relatively cheap and easy to get credit compared to how things will be as the GFC takes the next step down. Then credit will cost a lot more and be considerably harder to get even if you have got a big deposit.

Repapsiyenom

Credit will be cheap but totally unavailable to everyone when the GFC end.

andybenw

As the next general election will be 2015, does anyone feel that we will start to see rising prices in 2014 in the run up. I say this as if a large crash and bounce were required to get this then the Tories would not be worrying about people being repossessed in order to achieve it. Therefore I wonder if their thinking is 3 more years of slow deflation of house prices to bottom out and start rising in 2014.

SecondLegDownIsTheBigOne

In 2012 the crash kicks off in earnest.

IveSeenTheLight

andybenw wrote: »

Therefore I wonder if their thinking is 3 more years of slow deflation of house prices to bottom out and start rising in 2014.

That would only be 2 more years

andybenw

IveSeenTheLight wrote: »

That would only be 2 more years

end of 2014.

picky beggar.

IveSeenTheLight

andybenw wrote: »

end of 2014.

picky beggar.

Probably a tad late to start rising at the end of 2014 then if the election is in 2015.

System

Another THREE silver sockies, seems a bit excessive.