House Price Crash Discussion Thread

codger

Not to entirely disagree with m00m00's sentiments, but:

Profitable estate agents are in business to run profitable estate agents.

Ends.

Agents who 'educate' their staff in the 'reality' of the market place so that the staff can, in turn, educate buyers and sellers in that same 'reality', are hardly doing so out of public-spiritedness.

When the market was pretty crazy, I don't recollect any stories of estate agents recoiling from the seeming absurdity of asking prices conjured up by the owners of sheds in Balham looking to cash in and buy a mansion in, er, Bulgaria. Now though, the last thing an agency wants on its books is a property so over-priced it'll never sell, because it cannot, as previously, count on a steady influx of commissions from the sale of more 'realistically' priced properties to subsidise the wait it must endure where the Balham shed is concerned.

Estate agents have to live with negative cash-flow.

Their money only comes in after their work has been done -- and often, long afterwards, too.

So when the market "cools", the money is, inevitably, slow in coming. So to make sure it does at least do that -- rather than never materialise at all --then yes: staff and customer "education" is essential.

Best, though, for all such "education" not to be represented for anything other than what it truthfully is:

Commercial self protection.


* And for those of us who well remember what happened from 1989 to 1993, best never to take an estate agent's advice at face value anyway: I can recall several cases of property 'valuations' which had less to do with concerns about the health of the housing market in general and rather more to do with concerns about the financial health of the estate agency itself.

Agents back then played a distinct role in driving down property prices so as to survive long enough in business until property prices went up again when the market recovered.

I've no doubt that, for exactly the same reasons, they will do so again.

[Deleted User]

http://uk.biz.yahoo.com/23112007/214/mortgage-approvals-dive-october.html

Mortgage approvals down 37% this month

Turnbull2000

Highest house prices on record, lowest mortgage approvals on record. Not much of a surprise really.

I've always been reluctant to call the market, but it looks like New Labour's false economy will soon fall apart. If they reduce interest rates in a desperate attempt to rescue house prices, the economy will be trounced through inflation anyway.

Brown, you're a tw*t :money:

codger

How delicious though.

If New Labour can't, through an interest rate cut, sustain the false economy cherished by that idiot Blair in a congratulatory address to his constituents on departure from office -- "How good it is, the way all your homes here have risen so much in value under this government!" -- then there's only one way left.

An end to HIPs.

:rotfl:

danthemoneysavingman

Yant1 wrote: »

http://uk.biz.yahoo.com/23112007/214/mortgage-approvals-dive-october.html

Mortgage approvals down 37% this month

That's a year-on-year decrease (i.e. compared to Oct06), not this month alone!

codger

danthemoneysavingman wrote: »

That's a year-on-year decrease (i.e. compared to Oct06), not this month alone!

Yup. It's (I think) 18.5% down.

That kind of drop in just one month though. . .

:eek:

budget_counsellor_shaz

Don't sales normally drop at this time of year? We're thinking of buying a house.




I'm so confused I don't know what to do.

phlash

budget_counsellor_shaz wrote: »

Don't sales normally drop at this time of year? We're thinking of buying a house.




I'm so confused I don't know what to do.

No, in fact the mortgage approvals in Oct have been good last two years. Approx 70,000 according to the British Bankers' Association. (See their site). October 2007 and the figure was ~44,000 equating to the 37% drop Year on Year.

Its up to you what you do, but there are enough warning bells out there! Look at what is happening in the news to the biggest BTL lenders. Bradford and Bingley, Paragon, Northern Rock, google news results for them. Then decide what impact this might have. If you don't conclude that you think house prices will fall, then I would like to see your arguments posted here.

It is probably the biggest financial decision in your life, therefore do your homework on it as if it is!

merlinthehappypig

budget_counsellor_shaz wrote: »

Don't sales normally drop at this time of year? We're thinking of buying a house.




I'm so confused I don't know what to do.

You and me both shaz. Though I'm not confused about whether or not this is a good time to buy, I'm certain it isn't - just don't have much choice unless someone can come up with a good place for the in-laws if their sale goes through o.k. (obvious suggestions aside....)

mystic_trev

LONDON, November 23 (Reuters) - Getting a loan to buy a house in Britain, especially as an investment, is now a lot harder, spelling trouble for not just its extremely pricey real estate, but for its economy and financial markets as well.

and this

"If lending dries up, the longer it lasts the greater the risk that you see a sharp correction (in housing prices)," said Howard Archer, an economist at Global Insight in London. "A lot of people are only just beginning to twig that this could go on longer than was thought only a few weeks ago."

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=allBreakingNews&storyID=2007-11-23T153900Z_01_L234857_RTRIDST_0_MARKETS-COLUMN-BUYTOLET.XML&pageNumber=1&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage1

It's all begining to look a bit nasty! I wouldn't be surprised to see the BoE reduce IR's next month - not that it will make a lot of difference (unless you have a tracker) you won't see a reduction in your monthly payments.