House Price Crash Discussion Thread

codger

Although it seems to be MSErs on another thread who've noticed it, signs of a total collapse are unavoidable, with prestigious properties like castles currently seeing reductions of as much as 97.6% in the asking price.

It may only be Bouncy Castles, down from thirty quid to 70p at Focus DIY, but even so: if as popular a sector as that is deflating so dramatically, it's obviously a total nonsense for anyone to now speak of buoyancy returning to the market.

John_Pierpoint

Generali wrote: »

I think that the LR figures are mix adjusted in an attempt to compare like-with-like over different periods. That is they compensate for lots of flats in a block coming on the market at the same time for example - it's not necessarily useful to compare the price a studio flat sells for with the price a 4 bed detached house goes for.

For those of us worrying about the next Northern Wreck, total volume of money, now boycotting the property market, probably is the measure that really matters.
(Anyone got a profile of the Newcastle Building Society's deposits and investments?)

John.

Generali

John_Pierpoint wrote: »

For those of us worrying about the next Northern Wreck, total volume of money, now boycotting the property market, probably is the measure that really matters.
(Anyone got a profile of the Newcastle Building Society's deposits and investments?)

John.

Newcastle BS 2007 Annual Report:

http://online.newcastle.co.uk/press_office/AGM2007/randc2006.pdf

What you might be interested in is on page 30, note 11. Am I right?

hgllgh

Vincenzo wrote: »

Exactly - as I a have always said. Better off IN a falling market , than OUT of a rising one! (provided you can keep up your repayments, of course!).

Yourself and Mr H can convince yourselves all you like....

"Better off IN a falling market" .. read that back and ask yourself if that makes any kind of sense to a FTB or any buyer for that matter in this day and age.... "better off buying now at the top of the biggest ever bubble in the history of the british property market just as it is being torn down by the biggest credit crunch in recent financial history, thus miring yourself in negative equity, unable to sell on when you need to move again as life circumstances change" .....bs

"With the base-rate dropping to 5.25%, the threat of the big "shock" that people on fixed-rate mortgages were facing has diminished" .... rubbish .... 1.4 million mortgages on teaser fixed rates are due to come out of their low rate deals this year. SVR is around 2% higher than base rate ... that is the payment shock waiting to happen, how has this been diminished by a 0.25% reduction in interest rates?

Mr._H_2

hgllgh wrote: »

Yourself and Mr H can convince yourselves all you like....

"Better off IN a falling market" .. read that back and ask yourself if that makes any kind of sense to a FTB or any buyer for that matter in this day and age.... "better off buying now at the top of the biggest ever bubble in the history of the british property market just as it is being torn down by the biggest credit crunch in recent financial history, thus miring yourself in negative equity, unable to sell on when you need to move again as life circumstances change"

Negative equity in and of itself isn't necessarily a bad thing, unless you are looking to down-size.

For anyone staying in their home, it doesn't matter at all. For anyone looking to move up the property ladder it's only a problem if they were hoping to move up it purely through borrowing additional money as opposed to saving for a bigger deposit for their next house.

hgllgh wrote: »

"With the base-rate dropping to 5.25%, the threat of the big "shock" that people on fixed-rate mortgages were facing has diminished" .... rubbish .... 1.4 million mortgages on teaser fixed rates are due to come out of their low rate deals this year. SVR is around 2% higher than base rate ... that is the payment shock waiting to happen, how has this been diminished by a 0.25% reduction in interest rates?

Clearly, you do not understand what the word "diminished" means. You appear to have read it as "been eliminated"; that isn't what it means. And the reduction in interest rates since the talk of the possibility of a "payment shock" started is 0.5%, not 0.25%.

seraphina

Mr._H wrote: »

Negative equity in and of itself isn't necessarily a bad thing, unless you are looking to down-size.

For anyone staying in their home, it doesn't matter at all. For anyone looking to move up the property ladder it's only a problem if they were hoping to move up it purely through borrowing additional money as opposed to saving for a bigger deposit for their next house.

Not quite true. People these days tend to be on two year fixed deals. So your two year fixed deal comes to an end, and you are placed on the lender's SVR - often around 2% more. So you try and remortgage - but this requires a revaluation. If you've bought recently with a 95% mortgage, you could be looking at a valuation less than you paid for the property.

So you're stuck on the lender's SVR, and you haven't tried to move at all. It's recent buyers with high LTV ratios who have most to fear.

wolvoman

seraphina wrote: »

Not quite true. People these days tend to be on two year fixed deals. So your two year fixed deal comes to an end, and you are placed on the lender's SVR - often around 2% more. So you try and remortgage - but this requires a revaluation. If you've bought recently with a 95% mortgage, you could be looking at a valuation less than you paid for the property.

So you're stuck on the lender's SVR, and you haven't tried to move at all. It's recent buyers with high LTV ratios who have most to fear.

Mostly true except almost all lenders will allow you to re-mortgage without a revaluation so long as you stick to the same lender - and not on the SVR either.

Granted, the deals won't be as good as moving provider altogether, but people will save the £5/600 odd for the valuation too.

Mr._H_2

seraphina wrote: »

Not quite true. People these days tend to be on two year fixed deals. So your two year fixed deal comes to an end, and you are placed on the lender's SVR - often around 2% more. So you try and remortgage - but this requires a revaluation. If you've bought recently with a 95% mortgage, you could be looking at a valuation less than you paid for the property.

So you're stuck on the lender's SVR, and you haven't tried to move at all. It's recent buyers with high LTV ratios who have most to fear.

Indeed, attempting to re-mortgage and being unable to do so because of a revaluation or because the lender sees you as too great a risk would be a problem.

Having a fixed-rate deal coming to an end surely negates the possibility that you "bought recently"? If you bought two years ago, even with the recent falls it's likely that your property is still worth more than when you bought it.

The real problem therefore, when it comes to re-mortgaging, is the "credit crunch". From my point of view, it is not possible to work out how severe the credit crunch is; all I ever see is pontifications of doom rather than any real analysis involving real numbers to back the claims up.

I'd say things are on a knife-edge. Whether we see a crash in prices or a long stagnation period depends on just how bad this credit crunch is.

m00m00

it depends entirely on what you bought, and where you bought

certainly in the east midlands prices have been flat on most property types for the past couple of years.

added to that the blatant overpricing on new builds, and if you've bought a new build in the past 2 years on a gifted deposit scheme, then you are going to be in for a nasty shock come remortgage time.

Mr._H_2

m00m00 wrote: »

it depends entirely on what you bought, and where you bought

certainly in the east midlands prices have been flat on most property types for the past couple of years.

added to that the blatant overpricing on new builds, and if you've bought a new build in the past 2 years on a gifted deposit scheme, then you are going to be in for a nasty shock come remortgage time.

Sure, there are some parts of the country were some segments of the market, particularly new flats, has already crashed. Whether there will be a crash across the country in the wider market, remains to be seen.