Take cover! The housing market is heading for a bloody and protracted crash!

Thrugelmir

Graham_Devon wrote: »

The only thing at the moment is we don't know when this will happen en masse, and we don't know the impact (severity of the increases).

Already is Graham. Virtually all the major players have revised SVR's upwards this year now. Only lender who hasn't yet and is actively looking for increased lending is HSBC. Now that stamp duty rush is over. I expect them to revise rates by end of May.

Graham_Devon

wotsthat wrote: »

Would prices 13% lower than now be a cure all? Er no.

But it would help.

Would you disagree?

In effect what you are doing here is suggesting thousands of people are dying from aids, and we can only offer 10% of them treatment....therefore we can't cure it.

No, it's not cureable, but 10% cured certainly makes things better than they were.

Graham_Devon

Thrugelmir wrote: »

Already is Graham. Virtually all the major players have revised SVR's upwards this year now. Only lender who hasn't yet and is actively looking for increased lending is HSBC. Now that stamp duty rush is over. I expect them to revise rates by end of May.

I was thinking more along the lines of 2-3% increases. I've had my increase, but my reference to "en masse" was across most mortgage holders, not just the (often now trapped) few. Often the last ones into the market are now the first ones trapped. Was always going to be the case, but were seeing it actively played out now.

Thrugelmir

Graham_Devon wrote: »

I was thinking more along the lines of 2-3% increases. I've had my increase, but my reference to "en masse" was across most mortgage holders, not just the (often now trapped) few. Often the last ones into the market are now the first ones trapped. Was always going to be the case, but were seeing it actively played out now.

Movements will be small increments. As no lender will wish to be to far out of line with their major competitors. No lender wants their better customers remortgaging.

Other factor is what happens in wholesale money markets going forward. Inter bank lending is tight. As banks recapitalise their own balance sheets. So increasing dependence on savers deposits.

The sale of Lloyds branches to the Co Op appears to have stalled. As appears Co-op may well be struggling to raise the finance to take over the mortgage book.

Interesting times ahead.

Thrugelmir

mpmbm wrote: »

timberrrrrrrrrrrrrrrrrrrr

From acorns grow oak trees.

Is a more positive view.

wotsthat

Graham_Devon wrote: »

But it would help.

Would you disagree?

In effect what you are doing here is suggesting thousands of people are dying from aids, and we can only offer 10% of them treatment....therefore we can't cure it.

No, it's not cureable, but 10% cured certainly makes things better than they were.

Would a 13% fall in prices help?

Clearly, it would help someone with a deposit at the ready, access to finance and the willingness to buy.

On the other hand all homeowners would see the value of their house fall by 13% damaging confidence. Existing mortgage holders would be in a worse LTV position and find it more difficult to access better rates, banks balance sheets would be damaged limiting lending further.

So on balance no I don't think a 13% fall in nominal would be beneficial.

Graham_Devon

But you have to go through the pain to fix the problem.

Neverland

Well what would move the market downwards would be:
- increased unemployment
- decreasing availability of mortgages
- increasing interest rates on mortgages
- inflation outstripping growth in wages

All of the above seem to be happening albeit slowly

N1AK

wotsthat wrote: »

If someone doesn't have to sell they have the upper hand. Wage inflation & static house prices seems the best hope for would be buyers. Sellers nominally get what they want; buyers get a cheaper house. Everyone's happy?

If someone doesn't want to sell they have the upper hand because they'd need a buyer to make them want to. If someone wants but doesn't need to sell then at best they've got a stalemate, again unless there is a buyers who are really keen to get that specific property.

Someone can sit on a property and refuse to sell unless they get 40% over market rate. That's fine; but they can't do anymore until they actually price at a level someone is willing to buy for.

Buyers don't control market prices, because sellers can always not sell, but they control the price of the sales that complete.

wotsthat

Graham_Devon wrote: »

But you have to go through the pain to fix the problem.

Maybe. There's obviously a train of thought that says longer drawn out discomfort is better than a short sharp shock (and vice versa).

It's the advantage of can kicking - it allows actions to be adjusted.

Short sharp shock sounds fine until you bump into the unintended consequences or, even worse, find you're trying to cure a problem that actually doesn't exist.