Looks like my prediction of a tougher 2012 is becoming mainstream

nollag2006

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.

Very good points.

It's also worth pointing out that new capital adeqacy requirements have put banks Balance Sheets under pressure, and it's taken quite a bit of time for them to recapitalise - hence mortgage rationing.

There is a good analysis here from the BOE that states that much of the repair work has already been done, but that there is more to do:
http://www.bankofengland.co.uk/publications/news/2011/076.htm

Philip Hampton of RBS was on Sky News this morning asserting that the British banking system had not been fixed yet, although the sector was "very much on the mend".

That to me suggests that mortgage rationing will soon end.

nollag2006

shortchanged wrote: »

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.

More unattributed twaddle

Transaction levels are steady and unlikely to rise in the near future:
http://www.cml.org.uk/cml/publications/marketcommentary

Conrad

shortchanged wrote: »

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

I've honestly been reading about these 'stubborn sellers' since 2005 on HPC.
The insinuation is that bears believe these sellers will at some moment capitulate, but on the evidence thus far the odds are long indeed.

Now I will get the reply - 'this time they really will give in as tough times bite' - been getting this same reply for years.

julieq

In any case, the market is sustaining a price, and the price floor is set by the other part of the accomodation market, which is the rented sector. If you add more buyers into a stable market on top of that as we will if FTBs are allowed back you create upwards pressure.

You're really not going to get panic selling unless the rental market collapses (you have to remove a few hundred thousand people), or massive increases in unemployment in the groups that own houses and bought recently. You can't say the latter is impossible next year - a eurozone collapse could do it - but in that case picking up a bargain house would be the last thing on anyone's mind.

doire_2

nollag2006 wrote: »

Philip Hampton of RBS was on Sky News this morning asserting that the British banking system had not been fixed yet, although the sector was "very much on the mend".

That to me suggests that mortgage rationing will soon end.

How the hell do you come to that conclusion? :rotfl:

Mallotum_X

doire wrote: »

How the hell do you come to that conclusion? :rotfl:

MrRee told him...

doire_2

Mallotum_X wrote: »

MrRee told him...

I wonder if nollag comes out with this stuff in every day life?

shortchanged_2

julieq wrote: »

In any case, the market is sustaining a price, and the price floor is set by the other part of the accomodation market, which is the rented sector. If you add more buyers into a stable market on top of that as we will if FTBs are allowed back you create upwards pressure.

You're really not going to get panic selling unless the rental market collapses (you have to remove a few hundred thousand people), or massive increases in unemployment in the groups that own houses and bought recently. You can't say the latter is impossible next year - a eurozone collapse could do it - but in that case picking up a bargain house would be the last thing on anyone's mind.

Well if mortgage lending remains sensible (pre boom levels) added to eventual interest rate rises I don't really see house prices going up. As long as banks don't open the floodgates and mess things up again then over time hopefully we will see prices come back in line more with earnings, not the ridiculous situations for example where we have people earning £20,000 and having £100,000+ mortgages etc, etc.

The ball is in the lenders court, and hopefully they will learn from previous mistakes and keep a tight, sensible lid on lending now and in the future.

julieq

Well he posted an argument which referred to a quote, which you then removed lines from and asked how he reached his conclusion. Which is pretty pathetic by any standards.

If the banking sector is "on the mend" then it will lend more. So it's reasonable to conclude that some of that will be lent to homebuyers.

If you don't think that's true, then let's have your arguments instead of dumb ad hominems. But it seems reasonable to me. And you might also ponder the reports that sales volumes are rising at the moment, which is an indication of precisely the same thing. Small increments, but upwards pressure.

Itismehonest

London prices are a law unto themselves & often held up by overseas buyers who see London property as a relatively safe bet.

Tin hat on.
Surely the fewer people who can afford to buy or chose not to buy hoping that the market will crash inevitably means more people in rental & so increased rents? This, in turn, leads to those who can afford BTL buying up many of the properties which otherwise may be FTB territory.
It's a vicious circle which some people could break out of but others, unfortunately, can't.

When prices fall it is always those owners who have to sell that have houses on the market. Those that don't bide their time.

Push the price down too far & eventually the whole market grinds to a halt.