BBC - RICS say prices down.

tomstickland

http://news.bbc.co.uk/1/hi/business/7037962.stm

Most commentators now agree that the property market is now responding to the five rate rises imposed by the Bank of England since the summer of 2006

Only a few months ago people were being laughed at for suggesting that prices could fall.

IveSeenTheLight

tomstickland wrote: »

http://news.bbc.co.uk/1/hi/business/7037962.stm



Only a few months ago people were being laughed at for suggesting that prices could fall.

The same article also states: -

A major correction in the market seems unlikely while economic growth is above trend and employment conditions remain buoyant," said RICS spokesman Jeremy Leaf.

I personally believe there is an awful lot of hype around stating that house prices must crash, however the scenarios are not fully in place for this to happen.
Sure "SOME" areas may see house prices drop (not crash but maybe a little), however others (fortunately where I live) are still on the increase.

I believe there may be a slight correction in some areas, maybe a house price stagnation in more, but definately not any significant price reduction such as people are stating as a crash is about to happen

mystic_trev

IveSeenTheLight wrote: »

The same article also states: -A major correction in the market seems unlikely while economic growth is above trend and employment conditions remain buoyant," said RICS spokesman Jeremy Leaf.

I can't understand why they keep saying that? Didn't make much difference in the US - Their House prices are tanking.

Here we have both Sub-prime and overgeared BTL Investors. A few months of continued negative figures, then negative sentiment, then.......well who knows :rolleyes:

tr3mor

mystic_trev wrote: »

I can't understand why they keep saying that?

Turkeys don't call for Christmas do they?

IveSeenTheLight

mystic_trev wrote: »

A few months of continued negative figures, then negative sentiment, then.......well who knows :rolleyes:

IF house prices drop, you may see a few people decide to cash in while they think the prices are at a peak.
I think that most BTLers are in for a long term investment so a house being valued slightly lower will not bother them in the short term

The two main contributing factors which would affect people with mortgages / BTL's is the interest rate was to dramatically increase or unemployment also dramatically increased meaning people could not afford the rent / mortgage.

As we do not have high unemployment or high interest rates, where is the catalyst for the price crash?

Doc_N

IveSeenTheLight wrote: »

The two main contributing factors which would affect people with mortgages / BTL's is the interest rate was to dramatically increase or unemployment also dramatically increased meaning people could not afford the rent / mortgage.

As we do not have high unemployment or high interest rates, where is the catalyst for the price crash?

Mainly the interest rates, which have increased dramatically in relative terms (ie 6% instead of 4%, for example, is a 50% increase).

Large numbers of people have been shielded from a rate rise by being on a fix. A lot of those fixes are about to come to an end, and borrowers are going to face a massive rise in repayments. Many of them simply won't be able to pay, their houses will be repossessed, and that's why further house price falls (a crash if you like) are extremely likely.

mystic_trev

IveSeenTheLight wrote: »

As we do not have high unemployment or high interest rates, where is the catalyst for the price crash?

As I've already said, you don't need a Catalyst, such as High Interest rates or Unemployment LOOK at what's happened in the US, and their Economy is booming with the DOW recording record highs and a crashing housing market - NO Catalyst there!

I see you've recently entered the BTL Market - You may live to regret that. I have two Investment Properties, one bought in 1996 and another two years later. The first has nearly quadrupled in value and the other trebled. My Yields now work out at just over 2% nett. Anyone entering the market now will get badly burned IMHO - and that from a Property Investor!

mystic_trev

BUY-TO-LET SMALL FRY ON THE RUN
Buy to let could be the first casualty of higher rates and stagnant or falling property prices because landlords can sell relatively easily and don’t have to find somewhere else to live. Many buy-to-let lenders have increased their rates since the credit squeeze took hold and some investors could easily find themselves having to subsidise mortgage repayments out of earned income because the rental no longer covers their outgoings.
House prices dipped in August for the first time in two years, according to Rics figures, while surveyor members’ confidence in the price outlook dropped to its lowest level since June 2005. Rics recorded landlord sales at their highest for two years in the second quarter of this year – having risen 44% since the beginning of the year.

According to property website landlord.co.uk, some investors are panic-selling, trying to get out before the market crashes and leaves them with negative equity. Those most vulnerable are landlords with only one or two properties, who bought new flats with very high loans to value, where the developer was pricing, and making the market, in the properties. The value of many of these properties has fallen dramatically.

http://citywire.co.uk/News/NewsArticle.aspx?VersionID=97229&NewsPage=2

Nuff said :rolleyes:

master_ian

If we take the market conditions at the moment as an opportunity to buy property at a deflated cost, say 10 - 15% below asking prices - with repossessions v high, BTL'ers offloading, and buyers holding back waiting for a crash - done properly, during the slow months of Nov/Dec, it can potentially be a good time to get a good 'discount' off flats/houses.There are more buyers seeing this period as a 'wait and see' rather than an 'opportunity in waiting'...

dannyboycey

tr3mor wrote: »

Turkeys don't call for Christmas do they?

Great quote! And very true.

nollag2006

tomstickland wrote: »

http://news.bbc.co.uk/1/hi/business/7037962.stm



Only a few months ago people were being laughed at for suggesting that prices could fall.

More evidence that interest rates have peaked, and will start to fall back over the next six months.

:T

Add to this the generous tax incentives given to landlords and those passing their homes onto family by Labour yesterday, and we won't see a house price crash for some time to come.

But keep clutching at those straws guys ....

:rotfl: