house prise rise or crash??

catkins

In last night's Evening Standard there was an article stating :

"There have been 25,869 repossessions applied for in the first quarter of the year. This is the highest since 1997 and probably the worst since the early nineties property meltdown" !! Also:-

"The biggest estate agency, Bairstow Eves, say their sales this year have been 25-30% below the previous year".

Looks like the "boom" is well and truly over

dougk_2

Yes the boom is over - but it does not mean that a crash is imminent.

People are increasingly marketing property themselves (due to the over excessive amounts Estate Agents charge), particularly due to the rise in the internet. Ask in this forum and you will find several people comment that they have sold houses in the past year or so by themsleves. People are waking up to see that estate agents do very little for their money. Its about time they worked in flat fees not %'s.

There are many conflicting reports about the housing market and the economy in the press.... a lot depends on which political party the newspaper represents. Then if you listen to the politicians over the election battle you would think they are all talking about different countries...... Lies, distortion, mistruths and personal attacks - We would be better get a school of primary children to run the country!

The house market isn't affected by one thing its lots of things together - the biggest threat to the economy is scaremongering.

dougk_2

Latest article showing that house prices are rising and people are still buying.

http://uk.biz.yahoo.com/050428/94/fhgm7.html

A crash seems unlikely.

meanmachine_2

dougk wrote:

Latest article showing that house prices are rising and people are still buying.

http://uk.biz.yahoo.com/050428/94/fhgm7.html

A crash seems unlikely.

Yeah surprised by those figures. All it means is that an interest rate rise is now guaranteed for May. So therefore expect major falls during the traditional summer lull.

dougk_2

Don't think thats the line the lenders are taking, hence why their fixed rates are dropping.

The main cause of the inflation figure rising was fuel - therefore I don't see the BoE or government panicing.... Just out of interest the 2% inflation target being a Government one not a BoE one, will they be too bothered anyway?????

Personally its unsecured lending that needs soorting out (credit cards and loans) and i think this area needs tighter regulation.

meanmachine_2

dougk wrote:

Don't think thats the line the lenders are taking, hence why their fixed rates are dropping.

The main cause of the inflation figure rising was fuel - therefore I don't see the BoE or government panicing.... Just out of interest the 2% inflation target being a Government one not a BoE one, will they be too bothered anyway?????

Personally its unsecured lending that needs soorting out (credit cards and loans) and i think this area needs tighter regulation.

The BoE's primary goal is to keep the CPI below 2%. They forecast this rate to be at 1.9% six months from now so will act now to ensure that, six months down the line, inflation isn't at, say, 2.5%.

Inflation really is a devil to control because it takes so long to feed into the economy. The low interest rates of 18 months ago are only now coming home to roost.

You have to admit that the big drop in loan approvals at the moment is going to have a significant impact on the market over the next 12 months.

But we'll see. If any of us were able to accurately predict the economy we'd all be squillionaires!

dougk_2

From what I read, although the amount of loan approvals has dropped , it has dropped nowhere near to a level when house prices were falling. Maybe to a level where they were three or four years ago - so just a levelling off after a boom.

Although I have no proof and (don't have the time to find out) I would suggest there are a fair few sales taking place that don't involve new mortgages and loans. Do straight remortgages appear in this loan approvals figure as well?

Are the number of approvals also down as the lenders are being more picky rather than people not wanting to take loans?

meanmachine_2

Sorry Doug,can't answer your questions re loan approvals. But one stat I read was that they have been running at levels close to where they were in 1995.

I suggest we put this one to bed and reconvene in another 28 days to see where the housing market is then.

dougk_2

Agreed

Anything could happen in the next 28 days.. Things that we cannot predict at all that could have a vast effect (terrorism, war, natural disasters.... conseratives wining the election )

Spendless

dougk wrote:

Agreed

Anything could happen in the next 28 days.. Things that we cannot predict at all that could have a vast effect (terrorism, war, natural disasters.... conseratives wining the election )

Do you both live in the same place though?

IMO one place can be doing something whilst another does the total opposite.

I have posted on other occassions how my MTH fell in neg equity within a year of buying in 94. This rectified itself in summer 2002 when our boom started here.

Mr Spendless though bought a 2 bed flat in another county at same time as myself. We sold this having done nothing to it for a £3-4K profit in 1999. My own place at this time would have been about £6K in neg equity.