The only problem with the housing market – houses cost too much

Generali

PasturesNew wrote: »

If house prices were lower, people'd more easily be able to borrow the money and save the deposit. Simples.

There's no mortgage shortage - just a shortage of people that can meet the criteria to get one for the huge amount they want to be able to pay the high house prices being asked.

There are 2 things IMO:

- New bank regs mean that it's uneconomic for lenders to offer high LTV mortgages as they have to hold so much more in their reserves for this kind of lending ('risk capital' in the jargon)
&
- Banks are severely constrained in the actual amount of cash available to lend. That is a function of 3 things in turn: new bank regs requiring higher reserves, Govts borrowing so much that they are 'crowding out' private borrowers and disfunctional interbank lending markets (banks that have spare capital don't trust banks that could profitably use more enough to lend to them unsecured)

MrRee_2

EchoLocation:-

You didn't answer me ...... what level's should house prices be at?

Not the ones to suit you personally, the ones they should be at in your opinion.

My opinion is, as houses are selling, they are at the levels they need to be at ...... please explain yourself.

Generali

MrRee wrote: »

EchoLocation:-

You didn't answer me ...... what level's should house prices be at?

Not the ones to suit you personally, the ones they should be at in your opinion.

My opinion is, as houses are selling, they are at the levels they need to be at ...... please explain yourself.

The market (supply and demand) is the only thing that can set house prices in the UK as, broadly speaking, there is a free market in house prices.

The complicating factor is finance. There isn't a free market in mortgages and banking in general and most houses are bought using a mortgage of some sort.

EchoLocation

MrRee wrote: »

EchoLocation:-

You didn't answer me ...... what level's should house prices be at?

Not the ones to suit you personally, the ones they should be at in your opinion.

You'll find the answer in my first post before you asked the question, but of course you choose to miss the point and then dismiss the rest of the post. Free Market? Please. We have an over-inflated, propped up, manipulated housing market. We all know it.

MrRee wrote: »

My opinion is, as houses are selling, they are at the levels they need to be at ...... please explain yourself.

So it follows then that the houses that aren't selling, aren't at the levels they need to be?

Joe_Bloggs

The seller can't sell if the offered price would leave the seller in significant negative equity. This is a consequence of not having enough equity in the first place and local falling house prices.

The only solution for the seller is to wait for a higher price, hoping that future offered prices match or exceed the equity. This is the 'free' market but it is also a form of house sale gridlock.
J_B.

MrRee_2

But ALL sensible people accept that it is a free market ..... the only thing that manipulates it is the acceptance of selling and buying prices by both buyers and sellers.

EchoLocation - if you are renting and wasting money then I can see why you want falling prices, you are like a gambler who 'just needs another go to win back loses' .................... you need to accept that your levels of house prices are not the free market levels and, in truth, never will be.

So, month on month on month you throw away good money which could be used to buy and, as each month goes by, you get more and more bitter ...... I'm sorry you are where you are, but it's not the free markets fault, is it now?

PasturesNew

I don't want to own or rent - at these high prices.
There's nothing left over to live on, to fix things on, to save for emergencies.... so neither is really an option for many.

EchoLocation

MrRee wrote: »

But ALL sensible people accept that it is a free market ..... the only thing that manipulates it is the acceptance of selling and buying prices by both buyers and sellers.

You really can't bring yourself to say it can you? Let's try it another way; forget buyers and sellers, do you deny that the housing market was manipulated for huge HPI?, and do you deny that the current interest rate policy was not put in place to prop up a ('Free' according to you) falling market?

MrRee wrote: »

EchoLocation - if you are renting and wasting money then I can see why you want falling prices, you are like a gambler who 'just needs another go to win back loses' .................... you need to accept that your levels of house prices are not the free market levels and, in truth, never will be.

Blah blah blah, that's right, keep up the covering fire so you don't have to admit the obvious and answer the questions.

Speaking of which, you didn't answer me ......

EchoLocation wrote: »

MrRee wrote: »

My opinion is, as houses are selling, they are at the levels they need to be at ...... please explain yourself.

So it follows then that the houses that aren't selling, aren't at the levels they need to be?

Flight2quality

Joe_Bloggs wrote: »

The seller can't sell if the offered price would leave the seller in significant negative equity. This is a consequence of not having enough equity in the first place and local falling house prices.

The only solution for the seller is to wait for a higher price, hoping that future offered prices match or exceed the equity. This is the 'free' market but it is also a form of house sale gridlock.
J_B.

Its a dangerous game waiting for higher prices what if higher interest rates come first and wages are still going down in real terms. Unemployment is still going up, also, could we see large numbers of repossessions?

Jimmy_31

MrRee wrote: »

Houses too expensive?

Compared to WHAT?

It's not the House Price which is stopping FTB's from buying - not in the slightest - it is simply the lack of finance to purchase.

The demand to buy is there, and being played out in the South with everything selling extremely fast, just the finance is tight.

But, since 2008, FTB's have had a chance to save - if they saved £1,000 a month (not at all remarkable), then they will now have around £36,000 ...... which, amazingly, is the about amount needed for a 20% deposit on the average house price.

This is why we are seeing movement in the market, the finances are now catching up.

House prices are where they have to be, I would suggest.

House prices are to high compared to wages people earn.

If the banks started giving 100% mortgages tomorrow around here, i really dont think it would make much difference to the house prices in the area.

You cant buy much without a job never mind a house.

Why do you want people to hate you so much, what have you done that makes you feel you deserve to be hated ?.