Looks like my prediction of a tougher 2012 is becoming mainstream

Rochdale_Pioneers

Up here in the North East we still have minimal house transactions - if you cash you can pick up amazing bargains, but for everyone else it has stopped. Guy down the street needed to move for whatever reason, tried for a year and eventually part-exed to Barrats who scalped him. Or so they thought because they can't shift it either, and they've dropped another £20k off the price.

Unless the whole of Teesside has suddenly become unable to keep up with mortgage repayments then the banks have essentially shut the market down. When we asked Halifax what options we had other than our current deal they said that with so few sales to assess current prices on they'd assume we were in negative equity and price accordingly. If the lender doesn't know how much its worth - because they won't lend so noone can buy - then therein lies the problem!

julieq

doire wrote: »

Why do you think mortgage availability will relax?

For two reasons. Firstly I think there will be increasing political pressure to increase lending to first time buyers, and secondly because it makes commercial sense that lenders start lending. Hardly going to be an opening of the floodgates, but we're talking about small incremental improvements combining.

shortchanged_2

julieq wrote: »

For two reasons. Firstly I think there will be increasing political pressure to increase lending to first time buyers, and secondly because it makes commercial sense that lenders start lending. Hardly going to be an opening of the floodgates, but we're talking about small incremental improvements combining.

But the housing market doesn't need first time buyers to function julieq.

doire_2

julieq wrote: »

For two reasons. Firstly I think there will be increasing political pressure to increase lending to first time buyers, and secondly because it makes commercial sense that lenders start lending. Hardly going to be an opening of the floodgates, but we're talking about small incremental improvements combining.

The government already had a 'housing summit' and demanded the banks lend. Only one problem. Not one back even turned up. The government cant demand that banks lend money. They are a business not a charity.

If the government could force them to lend then they would have done so a long time ago instead of coming up with silly ideas to try and keep the bubble inflated.

wotsthat

doire wrote: »

The government already had a 'housing summit' and demanded the banks lend. Only one problem. Not one back even turned up. The government cant demand that banks lend money. They are a business not a charity.

If the government could force them to lend then they would have done so a long time ago instead of coming up with silly ideas to try and keep the bubble inflated.

Things ARE going to improve - surely the only disagreement can be when?

When they do get better you'd have to be a bulls bull to think that overnight we'll move into a land of milk and honey. I really can't see anyone saying that though.

Just about every European bank is filling their boots with cash borrowed at 1% from the ECB this week. Some, not as much as the government would like, will find it's way into the hands of FTB's and businesses.

julieq

shortchanged wrote: »

But the housing market doesn't need first time buyers to function julieq.

No, it doesn't, and you can see that by the way it's functioned perfectly well in the last year or two without significant quantities of first time buyers. But what do you think happens when you introduce first time buyers into the market?

Answer: more competition, and upwards pressure on prices.

And please, before the usual mob decide I'm a cheerleader for HPI, this is about explaining what's happening in the UK, nothing more, with a prediction which I'll probably regret but which is based on a reasonable set of assumptions as to what will happen in fairly unpredictible times. I've consistently argued for laxer planning and more building which will moderate prices, but you do have to provide routes to finance that for owner occupiers or you end up helping only landlords. The sum total of all that has happened so far is that if you don't own already, your housing costs have risen and your chances of buying have diminished.Not really a win for those hoping that credit squeezing would raise rates of home ownership.

shortchanged_2

julieq wrote: »

No, it doesn't, and you can see that by the way it's functioned perfectly well in the last year or two without significant quantities of first time buyers.

Do you seriously believe that the housing market has functioned perfectly well in the last year or two?

Conrad

My own thread 'Countdown to the new prosperity, Tories make us proud again', is here in Discussion Time;

https://forums.moneysavingexpert.com/discussion/3614323



..

Things are tough throughout the developed world, but essentially this all boils down to something far less sinister sounding - simple rebalancing and note many economies including ours are still growing !!!!!!!

Many things are now in place that have put us on the right road to a rebalanced economy, and by summer 2012 I expect there to be certain and meaningful signs that the new prosperity era is underway.

Many of you will think this plain dumb, just as people thought the comming credit crunch was plain dumb thinking in 2006.

julieq

shortchanged wrote: »

Do you seriously believe that the housing market has functioned perfectly well in the last year or two?

Well it's a market and transactions are taking place in it and prices are by and large being sustained. In what way would you think it's not functioning?

shortchanged_2

julieq wrote: »

Well it's a market and transactions are taking place in it and prices are by and large being sustained. In what way would you think it's not functioning?

Well a very subdued market with lots of stubborn sellers digging their heels in. But for how long this can go on for if conditions remain the same I don't know.