House market final props could soon collapse

ess0two

Flight2quality wrote: »

yep, FT, Moneyweek, bloke down the pub. Everyone is talking about the props holding up house prices.

No i'm talking about you, and all the other logins that use the same terms.

Dan:_4

Flight2quality wrote: »

I said a few weeks ago that only two things were holding up UK house prices in the face of collapsing consumer incomes: forbearance on the part of the banks (changing the terms of mortgages and so on to prevent people ending up being in arrears) and ultra-low mortgage costs.

This week, the scale of the forbearance in the market became clear. According to the Financial Services Authority, 5-8% of all UK mortgages would be in arrears if the banks weren't scrabbling around looking for ways to prevent it happening. But I can't see that number being allowed to go much higher.

And what of mortgage rates? If forbearance is so huge at a time when rates are at their lowest for 300 years, what happens when the costs of a mortgage rise? If you were hoping that 2011 was the last year of falling house prices, I suspect you will find next year deeply disappointing.

http://www.moneyweek.com/investments/property/uk/merryn-somerset-webb-2012-housing-market-collapse-14900

Sir,

Having joined only 3 months ago, you are still very new here. If you had been around back in the good old days the you would know that it was widely predicted that the economy was in the worst state since the great depression and no matter what measures were put in place by the Government (low interest rates, printing money, rescue packages etc) it would be IMPOSSABLE to stop a house price crash.

When the house price crash was prevented, it was widely predicted that the Labour Government were currupt and the the election of the Tories would bring about a repeat of the early 90s crash and interest rates would sore to 15%.

Still nothing.

I struggle to believe that the what you say will ever happen, and that's not because your using MoneyWeek as a source, but because if we were in for a massive house price correction - it simply would have had happened by now.

mcc100

Dan: wrote: »

if we were in for a massive house price correction - it simply would have had happened by now.

Record low interest rates since early 2009 have so far prevented any massive house price correction ......

MrRee_2

It all hinges on Interest rates .....

House prices will never, ever, be as low as they were in 2009 - I know.

Prices in the South are up 20% since October, of that I have witnessed.

Plenty of people with plenty of money .... it's boom times people - it's just that some need it to be slapped around their faces before they see it!

marlonthemagnificent

MrRee wrote: »

It all hinges on Interest rates .....

House prices will never, ever, be as low as they were in 2009 - I know.

Prices in the South are up 20% since October, of that I have witnessed.

Plenty of people with plenty of money .... it's boom times people - it's just that some need it to be slapped around their faces before they see it!

so, so desperate.....

Dan:_4

mcc100 wrote: »

Record low interest rates since early 2009 have so far prevented any massive house price correction ......

Thank you. In 2008 when house prices were falling monthly, I shouted (on here) that 0% interest rates would solve it - my god, I was called all the names under the sun and was told that no measures, not even cutting interest rates to 0 could 'prevent' the pending correction.

4 years on and......

RenovationMan

mcc100 wrote: »

Record low interest rates since early 2009 have so far prevented any massive house price correction ......

Yes, and that was by design not accident. Do people really think that an elected government would not do everything it could to prop up house prices and secure the wealth of the vast majority of UK voters?

Flight2quality

Dan: wrote: »

When the house price crash was prevented,

When the house price crash was postponed,

Just correcting your obvious mistake. Prices were propped up, but easy to see the props are now becoming unstable.

mcc100

RenovationMan wrote: »

Yes, and that was by design not accident. Do people really think that an elected government would not do everything it could to prop up house prices and secure the wealth of the vast majority of UK voters?

Yes, I agree ...... however the government will have no control over interest rates charged by banks (as opposed to the base rate of 0.5%) as the fallout from the Eurozone crisis becomes apparent.

Flight2quality

RenovationMan wrote: »

Yes, and that was by design not accident. Do people really think that an elected government would not do everything it could to prop up house prices and secure the wealth of the vast majority of UK voters?

Ha the funny thing is with all the buyers from over seas soon a large portion of voters will be renters Then letting house prices come down will be a vote winner. Maybe that was the plan?