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MSE News: Nationwide: Biggest house prices drop in three years

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MSE News: Nationwide: Biggest house prices drop in three years

edited 30 November -1 at 1:00AM in House Buying, Renting & Selling
12 replies 2.3K views
MSE_GuyMSE_Guy MSE News EditorMSE Staff
1.7K posts
I've been Money Tipped! Newshound! Chutzpah Haggler
edited 30 November -1 at 1:00AM in House Buying, Renting & Selling
"UK house prices are 13% below their 2007 peak, but this is still less than the falls seen in the US and Spain ..."
Read the full story:
Nationwide: Biggest house prices drop in three years


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This discussion is not in the 'discuss house prices and the economy' thread as that is only open to those signed in, so many coming from the news story may not be able to view it.
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Replies

  • Dan:_4Dan:_4 Forumite
    3.8K posts
    Theres hope for brit1234 yet!

  • brit1234brit1234 Forumite
    5.4K posts
    Dan: wrote: »
    Theres hope for brit1234 yet!

    There was no doubt really its just slashing interest rates to 0.5% has just delayed the inevitable. We should have mostly price falls in the main indexs (Nationwide, Halifax and Land registry) with the occasional monthly hic up. There will be another series of rises for a couple of months after the spring bounce next year but the trend will be down probably not as fast as I would like.

    All you fellow first time buyers keep saving those deposits, there is hope on the horizon.
    :exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
  • Dan:_4Dan:_4 Forumite
    3.8K posts
    I hope your right brit1234, I really do.

    Maybe I should hold off buying again longer then I planned?

  • DRPDRP Forumite
    4K posts
    Tenth Anniversary Combo Breaker
    ✭✭✭✭
    Dan: wrote: »
    I hope your right brit1234, I really do.

    Maybe I should hold off buying again longer then I planned?

    it all depends on personal circumstances, but there'll never be a 'perfect' time to buy. You could end up waiting years and still be unlucky.

    If your ambition is to buy a home then I would say get it sorted and enjoy your life in it asap :beer:
  • brit1234 wrote: »
    There was no doubt really its just slashing interest rates to 0.5% has just delayed the inevitable. We should have mostly price falls in the main indexs (Nationwide, Halifax and Land registry) with the occasional monthly hic up. There will be another series of rises for a couple of months after the spring bounce next year but the trend will be down probably not as fast as I would like.

    All you fellow first time buyers keep saving those deposits, there is hope on the horizon.

    Slashing rates to historic lows certainly proved helpful. But there are other nations ‘benefiting’ from low rates who still experienced substantial falls e.g. US, Ireland, Spain. This hints at some underlying reasons why the UK got off so lightly, such as rapid population growth and a chronic shortage of housing. London also continues to surge upwards thanks to foreign investment.

    So what’s been delayed and inevitable? Are you seriously still suggesting the UK will experience large nominal falls? Not even the deepest downturn since the Great Depression did much damage to values. Also consider our housing market performance pretty much dictates the BoE base rate, so there’ll be no meaningful rate rises until they’re confident house prices are not under threat.

    [FONT=&quot][/FONT][FONT=&quot]
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    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
  • brit1234brit1234 Forumite
    5.4K posts
    Slashing rates to historic lows certainly proved helpful. But there are other nations ‘benefiting’ from low rates who still experienced substantial falls e.g. US, Ireland, Spain. This hints at some underlying reasons why the UK got off so lightly, such as rapid population growth and a chronic shortage of housing. London also continues to surge upwards thanks to foreign investment.

    So what’s been delayed and inevitable? Are you seriously still suggesting the UK will experience large nominal falls? Not even the deepest downturn since the Great Depression did much damage to values. Also consider our housing market performance pretty much dictates the BoE base rate, so there’ll be no meaningful rate rises until they’re confident house prices are not under threat.

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    The big difference between the Uk and US was that the US house price crash was a full year ahead of the UK. The US and UK cut interest rates together after the American crash was well established and the UK had just really started. Also you have to look at key dates for US mortgage products. The key subprime dates were about 2007-2010 and Option Arm/Alt A mortgages 2010-2013 which is seeing continuous amounts of people in trouble.

    In the UK which was recognised as a bigger housing bubble of the UK the banks did far more to keep people in their homes and people here in negative equity could not walk away unlike the US where they could hand the keys back.

    The UK had a massive decade long bubble furled by too low interest rates, mass fraud and irresponsible lending. It is the banks not declaring these huge loses, keeping people in their homes. The Euro crisis with higher coming mortgage rates will break the last pin.

    The UK was massively supported by foreign investors the last 3 years with the weak £ and foreign capital flight into UK property which is now ending with most of the money already moved and the stamp duty changes redirecting the money left instead to Germany. That original money has really distorted UK prices the last few years.

    Spain and Ireland were the only 2 countries in the world with a housing bubble bigger than ours. Both being in the EU they were going to get the same foreign capital coming in to buy property infact the opposite happened with their Euros coming to the UK instead making their situation worse.
    :exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
  • edited 1 August 2012 at 3:16PM
    Turnbull2000Turnbull2000 Forumite
    1.8K posts
    edited 1 August 2012 at 3:16PM
    brit1234 wrote: »
    The big difference between the Uk and US was that the US house price crash was a full year ahead of the UK. The US and UK cut interest rates together after the American crash was well established and the UK had just really started. Also you have to look at key dates for US mortgage products. The key subprime dates were about 2007-2010 and Option Arm/Alt A mortgages 2010-2013 which is seeing continuous amounts of people in trouble.

    In the UK which was recognised as a bigger housing bubble of the UK the banks did far more to keep people in their homes and people here in negative equity could not walk away unlike the US where they could hand the keys back.

    The UK had a massive decade long bubble furled by too low interest rates, mass fraud and irresponsible lending. It is the banks not declaring these huge loses, keeping people in their homes. The Euro crisis with higher coming mortgage rates will break the last pin.

    The UK was massively supported by foreign investors the last 3 years with the weak £ and foreign capital flight into UK property which is now ending with most of the money already moved and the stamp duty changes redirecting the money left instead to Germany. That original money has really distorted UK prices the last few years.

    Spain and Ireland were the only 2 countries in the world with a housing bubble bigger than ours. Both being in the EU they were going to get the same foreign capital coming in to buy property infact the opposite happened with their Euros coming to the UK instead making their situation worse.

    You’re really clutching at straws these days brit. A noticeable rise in mortgage rates and repossessions just ain’t gonna happen. The banks are desperate to avoid any write downs, and the government will continue to make every effort to ensure that the housing market is protected. You also seem to be ignoring the fact we don’t have a glut of properties as is common in the US, Ireland and Spain, or that our private pension system is decimated and property continues to be viewed as the best bet. Or how about the lack of lower value forced sellers, thanks to the state backed generosity of the banks and tens-of-thousand opting to rent out instead.

    edit: an example of opting to rent has just appeared http://forums.moneysavingexpert.com/showpost.php?p=54874627&postcount=54

    Rather than steep falls, it’s looking almost certain we’ll experience a few more years of real-terms (relative to salaries) price stagnation outside of London and low transaction levels. Only when the credit taps re-open will the devastating property shortage and surge in population really come into play
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
  • House prices in the Greater London area are still too high and need to fall by at least 20% to a sustainable level for ordinary people to afford homes; the only good thing about the over strict lending criteria is that this will help drive prices down to a sensible level. Add to this a sustainable mortgage interest rate of around 2.5% for a 95% mortgage and we would hopefully see some growth in the economy and increased consumer spending with bad debt reduction? (or shall we just lend money to the "have's"?)

    The stamp duty scale needs to be reduced between the £250 - £500k band which could increase conveyancing activity and help buyers laden with the costs of moving home. Better still, an individual or married couple should have their first primary residence free from stamp duty and buy to let/commercial purchases should be 5% flat.

    The 0.5% Bank Of England base rate makes me laugh! It's a pointless and redundant rate measurement. It's the real consumer pay rate that needs attention, 7.5% for personal loans 4% for mortgages and 25% + for credit cards, IF you have a good credit rating.

    I am sick of hearing banks should lend to SME's and households, when nothing happens, just keep applying a massive tax charge on the banks who are holding back the UK recovery by not lending until the message sinks in....
  • RafterRafter Forumite
    3.8K posts
    Interritus,

    Agree with you about London house prices.

    Only way of getting a 95% mortgage for 2.5% is if you can persuade your parents and grandparents to accept <1.5% on their savings rather than the 3%+ they are currently able to get - doesn't seem likely in my view.

    Although I like beating up banks as much as the next man, I'm not sure what slapping a massive tax charge on banks that are state owned and who already trade at a discount to their equity would achieve.

    Morgage lending only grew so much in the boom period because the rest of the world was willing to lend around £500 billion to UK banks to lend out to consumers and businesses.

    The rest of the world is now more cautious. The Bank of England has filled the gap with QE and Funding for Lending but banks are understandably more cautious about lending to people after losing so much in the crash.

    People are also more cautious about over extending themselves too.

    R
    Smile :), it makes people wonder what you have been up to.
  • Dan: wrote: »
    I hope your right brit1234, I really do.

    Maybe I should hold off buying again longer then I planned?

    Yeah, just do what Brit does and spend the next 5 years talking about it but knowing full well you'll never do it.

    Or instead of fretting about the future and clutching at any straw you can to convince yourself and others that a catastrophic price crash is on its way (a la brit), just use your head and buy a house when it's right for you and when you have a decent deposit.
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