House Price Crash Discussion Thread

PayDay

harryhound wrote: »

Can you post a link to these new regulations.
So that tenants reading this can know what to expect
(and people like me can gloat about not being in the BTL game any more).

The House in Multiple Occupation regulations, requiring "family" houses to be turned into a facsimile of a hotel, with heavy self closing fire doors and wired glass peep windows etc. etc. was enough for most amateurs to see the writing on the wall.

This is the link to the thread on here recently
http://forums.moneysavingexpert.com/showthread.html?t=900645

Just reread the thread myself. It will cost about £60 per property, not the £250 I first said. The fine for not showing it will be £200.

PayDay

The governemnt site on energy certificates https://www.communities.gov.uk/epbd

John_Pierpoint

This ongoing useful BBC2 series is back tonight and tomorrow.

I've posted more information and links as part of this thread:
http://forums.moneysavingexpert.com/showthread.html?p=10879321#post10879321

moanymoany

John_Pierpoint wrote: »

The bubble came and took the village pub.
It is busy closing the local post office.
Now its turned on its hand maiden (or evil uncle if you prefer).

If Estate Agency numbers are down 20% by this year end, will it follow that house prices will be too?

In reality house prices are down a lot more than the statistics suggest. Because the VOLUME is well down, we know it is the more-difficult-to-sell houses that are failing to sell. They are being withdrawn by owners, determined not to admit their major asset has fallen in value.

Their denial does not change the truth.

I agree with you.

We have just sold our house. We reduced the price by 15% from the initial 'on the market' price. There are a lot of houses in the area that have been hanging around on the market since last summer - and there are houses that have been taken off the market. There are two houses in my old road that haven't sold. One was last year, went on at £339,950 - went down to £329,950 - then it went off the market. At about the same time as us - february this year - a house of the same style as the first went on the market at - offers over £315,000. It is now on at £299,000, they will not sell it unless they put it down to about £275,000.

In the same postcode there are properties on RightMove that have been on since last summer, properties on with up to four agents. These have been for sale for between 8 months to a year. Because we intended to sell this year in preparation for retiring I've been watching the local market closely, what property was on the market for and what was paid. I've also been tracking the houses that haven't moved. The property slump started here last year.

People become fixated on what their property is 'worth' and so refuse to make a big enough price cut to get it sold. 'A thing's woth worrit'll fetch' as they say 'oop north'.

I'm glad my cash is safely (well, that's another thread!) stowed away in the bank. The money we had to lose by dropping the price to get a sale, will be made up in six months, taking into account the additional costs that would have been payable on it had it been part of the sale price.

van_persie

moanymoany wrote: »

John_Pierpoint wrote: »

The bubble came and took the village pub.

John_Pierpoint wrote: »

It is busy closing the local post office.
Now its turned on its hand maiden (or evil uncle if you prefer).

If Estate Agency numbers are down 20% by this year end, will it follow that house prices will be too?

In reality house prices are down a lot more than the statistics suggest. Because the VOLUME is well down, we know it is the more-difficult-to-sell houses that are failing to sell. They are being withdrawn by owners, determined not to admit their major asset has fallen in value.

Their denial does not change the truth.

I agree with you.

We have just sold our house. We reduced the price by 15% from the initial 'on the market' price. There are a lot of houses in the area that have been hanging around on the market since last summer - and there are houses that have been taken off the market. There are two houses in my old road that haven't sold. One was last year, went on at £339,950 - went down to £329,950 - then it went off the market. At about the same time as us - february this year - a house of the same style as the first went on the market at - offers over £315,000. It is now on at £299,000, they will not sell it unless they put it down to about £275,000.

In the same postcode there are properties on RightMove that have been on since last summer, properties on with up to four agents. These have been for sale for between 8 months to a year. Because we intended to sell this year in preparation for retiring I've been watching the local market closely, what property was on the market for and what was paid. I've also been tracking the houses that haven't moved. The property slump started here last year.

People become fixated on what their property is 'worth' and so refuse to make a big enough price cut to get it sold. 'A thing's woth worrit'll fetch' as they say 'oop north'.

I'm glad my cash is safely (well, that's another thread!) stowed away in the bank. The money we had to lose by dropping the price to get a sale, will be made up in six months, taking into account the additional costs that would have been payable on it had it been part of the sale price.

You did well to sell at 15% below original asking price, I'd say.
And those who withdraw property from the market hoping for it to recover will be disappointed. It will not 'insulate' them from the falls which are occurring at a frightening rate; the tightening of credit/mortgage criteria and change in sentiment has been so rapid I fully expect Year-On-Year falls of around 20% by Christmas. We're already in negative Year-On-Year territory and that's including last year's positive growth months. As they drop out of the equation, expect the panic and price drops to escalate...

posh*spice

Time for a confession. I've found myself addicted to this board recently and I have to say not for the right reasons. Me and Mr Spice have always had a very cautious approach to money. TBH we have only ever borrowed what we absolutely needed to in terms of mortgage - enough of a house so that the kids have a bedroom each-nice but nothing too flash - instead we have beavered away trying to pay off our mortgage (debt) for years. Our friends have always seen us as having odd attitudes to money; everyone around us was borrowing to the hilt (interest only). I have a friend who owes £500k lecturing me about debt (not mine I hasten to add) and I said to him - but you owe more money than anyone I know - he said he didn't see it as debt!:eek: Fact is almost everyone around me has never seen their mortage as debt, only as an "oppotunity". I thought they were all mad but was made to feel like a leper. Even if the market doesn't fall that much in the end, I now feel however that I have been vindicated. It's maddness to borrow so much money.:rolleyes:

Steve57

Joe65 wrote: »

The "credit crunch" is an inevitable consequence of reckless lending.

This whole house of cards is built on institutions making money out of lending to anyone.... regardless of affordability.

When the supply of irresponsible lending dries up so will the demand for houses at these currently ridiculous prices.

How else can sanity be restored ?

The reckless lending was done on the premise of being able to offload most of the risk to other parties, that option has now disappeared, possibly forever. The other major factor that led to reckless lending was todays bonus culture which encourages massive risk taking by all employees in financial institutions from the CEO to the lowly teller pestering you to take out a loan. The removal of both of these drivers may help to return sanity and in fact will probably happen out of necessity. We will hopefully go back to the old days of begging the bank manager for a loan and his job will be on the line if he makes a mistake.

Steve57

Spartax wrote: »

A new angle on negative equity avoidance perhaps:-

My daughter and her husband bought their first house in July 2007 with a 100% loan. They are concerned about negative equity as they may need to move with their jobs in a couple of years. Their proposed solution is to sell up now and repay the mortgage, go into rented accommodation for a couple of years then buy a house at a price which would be (if predictions are correct) much cheaper than now and hence a smaller mortgage.

Every instinct tells me that this is a bad idea and a high-risk strategy but I can't fault the logic. Can anyone help me argue against this?

It will be a good idea, in a couple of years time they will be in negative equity, if not already. The tables have reversed and it will be down for the next 5 years or so at least. The new opportunities will be in the future. Your instinct is based on the last 10 years which has been unprecedented in its ascendancy and is now a massive bubble, every single bubble in history has popped eventually and this one has been bigger than all of them put together. In 3 years or so time the hysteria surrounding property will be as dead as was the dot.com fiasco, but with more people sworn off borrowing and property than dot.com stocks.

harryhound

Steve57 wrote: »

Every single bubble in history has popped eventually and this one has been bigger than all of them put together. .

Be reasonable, these two were probably bigger in effect, though nothing like the numbers involved this time!:

http://en.wikipedia.org/wiki/South_Sea_Bubble.

http://www.martinfrost.ws/htmlfiles/rbs_darien.html

Not all bad, without the first, we would never have had Guy's Hospital in London. Without the second we would be showing our passports at Gretna Green.

(Share holders in RBS take note!)

rippedoff3

Its it possible to find how much prices are dropping per area?

We live in a very desirbale area and so i hope that it won't affect as as much?

We think our property is around £425000

we bought in 2001 for £207000

I am now pondering STR partly due to the hassle of the chain but we want to go down in mortgage so we will be at a loss.