House Price Crash Discussion Thread

geoffky

[FONT=Verdana, Arial, Helvetica, sans-serif]More bad news for the property market. [/FONT]

[FONT=Verdana, Arial, Helvetica, sans-serif]Everyone’s fretting about the news that Home Information Packs are going to be extended to all homes from December 14th. The extra hassle and expense of preparing these things (which may seem like a good idea on paper, but in reality appear to be a massive waste of time and money) could well put off many would-be sellers, pundits say.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]The Royal Institution of Chartered Surveyors reckons the housing market will “grind to a halt”, making life even tougher for first-time buyers as supply dries up. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]But another, less widely reported announcement, makes us suspect that house prices will be falling pretty soon anyway – so maybe first-time buyers shouldn’t worry too much… [/FONT]

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[FONT=Verdana, Arial, Helvetica, sans-serif]The introduction of Hips across the housing market has pundits worrying that supply will dry up at a time when the market is slowing already. The packs, which include legal documents and an energy efficiency certificate, will cost up to £500. The worry is that this will put more speculative sellers off. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Of course, this may be what the government had intended all along. A collapse in transactions is bad news for estate agents and surveyors – as we saw last week, Countrywide is already looking at closing branches. But a collapse in supply can help to prop up prices, at least temporarily. And it’s falling house prices, not falling transactions, that generate those nasty voter-scaring headlines in the press.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]So if you wanted to slow the market up, you might do things like making it harder for people to sell, by extending Hips across the entire market. And you might also promise to drop capital gains tax on second properties – if you just hold onto them until April. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]A cynic might even go so far as to suggest that the government might announce a re-think or a U-turn on CGT just before April, to avoid a glut of buy-to-let properties hitting the market. Perhaps Alistair Darling (or whoever’s Chancellor by then – it’s all up to Gordon Brown anyway) will say that the government needs more time to consult with the business world, putting off the changes for another year or so in an attempt to persuade cash-haemorrhaging buy-to-letters to keep clinging to their property empires for a little longer.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]All idle speculation of course, but you’ve got to think sneaky when there’s someone as mendacious as Mr Brown in charge.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Anyway, as I was saying earlier on, a more worrying announcement for the housing market was the fact that Kensington, the UK’s original sub-prime mortgage lender, has stopped dishing out loans to people with bad credit histories. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]As Melanie Bien of Savills tells Myra Butterworth in this morning’s Telegraph: “If Kensington can see no opportunities in sub-prime, what chance have other lenders with less experience got?”[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]So now the housing market is pretty much closed to those with poor credit histories, and it’s going to get harder for the self-employed and all those who can’t prove their income too. Meanwhile, Paragon has had to cut back sharply on the amount of buy-to-let lending it offers, and Bradford & Bingley has indicated that it’s getting more cautious too.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Hips might hit supply, but the credit crunch is already demolishing demand. We suspect that all the delaying tactics in the world won’t stop prices from falling.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Turning to the wider markets…[/FONT]

getting messy out there

ivegotabig1

As Many of us gloom & Doomers have stated recently...things are gonna get real bad very soon !! ... But this time its for real !!

http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article2933895.ece

Nenen

chriseast wrote: »

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....)

Wouldn't your in-laws consider renting for a while Chris? Or, assuming you are moving in together as they need some support, couldn't you rent somewhere big enough for all of you for a while?

merlinthehappypig

Nenen wrote: »

Wouldn't your in-laws consider renting for a while Chris? Or, assuming you are moving in together as they need some support, couldn't you rent somewhere big enough for all of you for a while?

That's the obvious solution, but they are dead against renting. No logical reasons behind the attitude just the usual 'renting is throwing away money' and the lack of stability (which I sympathise with even if I disagree). The main problem is that you simply can't have a sensible conversation with them. Their mental state has degraded a little with age and, even if it hadn't, they are not particularly wordly wise or aware of financial issues.

There is no way I could get them to understand the financial reasons behind wanting to put off buying and I don't want to worry them with anything irrelevant anyway. They simply can't see that every 1% drop in prices saves us £5000 on the mortgage. A 25-30% drop means no mortgage at all so I am desperate to delay the purchase, just in case!

If we could just find somewhere suitable for them for 6-12 months and see what happens with prices, but we can't put them in any form of home as they would worry that they were there for good and most of the hotels for disabled people only do short stays.

Just keeping my fingers crossed that their latest 'buyer' pulls out. I know that's just delaying the problem, but every month that goes by should make the way the market is going a bit clearer.

Nenen

Oh I do feel for you Chris... we have an elderly aunt who is still, to all intents and purposes, living in the 1930s financially! Just cannot be persuaded to manage her finances safely and wisely! This action comes to mind......

:wall: :wall: :wall: :wall: :wall: :wall: :wall: :wall:

merlinthehappypig

Nenen wrote: »

we have an elderly aunt who is still, to all intents and purposes, living in the 1930s financially!

Wish we were in the 30's financially - could afford a house then!

mystic_trev

The City is betting on UK house prices falling by 7 per cent next year in new tradeable derivatives contracts, which some bankers say is the best indicator of the market’s direction as millions of pounds are riding on the outcome.
These future housing contracts, which were published for the first time this year and have seen a surge in trading volumes in the past few months, are predicting much bigger falls in property values than other non-tradeable forecasts.

Sorry, but you have to be a subscriber to read the full article.

http://www.ft.com/cms/s/11a2548c-9ba6-11dc-8aad-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F11a2548c-9ba6-11dc-8aad-0000779fd2ac.html

wenthome

We have been told over the weekend of a person who has been refused a mortagage on a Studio flat, because some mortgage companies are now not lending on them. We are about to buy a property which is a flat, which is not managed and does not have a service charge.
This was sold to us as a positive thing by the estate agent. Some one has now told us this could be a bad investment as there is not management of the properties, and mortgage companies may see this in the future for a reason not to lend on the property.
Can anyone out there help us we are very close to exchanging contracts and do not want to let anyone down but we got well and truly caught out in 1988 and dont want to go down that drain again !!!

phlash

wenthome wrote: »

We have been told over the weekend of a person who has been refused a mortagage on a Studio flat, because some mortgage companies are now not lending on them. We are about to but a property which is a flat, which is not managed and does not have a sevice charge. This was sold to us as a positive thing by the estate agent. Some one has know told us this could be a bad investment as ther is not management of the properties, and mortgage companies may see this in the future for a reason not to lend on the property. Can anyone out there help us we are very close to exchanging contract and do not want to let anyone down but we got well and truly caught out in 1988 and dont want to go down that drain again !!!

Well I live in some flats with a management company and its terrible. Two cars in the parking lot that have no tax and have been there two years, and are all smashed up. So life without a management company to clean the stairwells, look after the grounds, fix anything wrong with the building etc would be even more of a nightmare! I wouldn't buy the flat off you.
If you have experience of the last fall in house prices etc, can you not see the parallels and that the situation now is far worse than 1988?
Read the post before yours aswell, on what the markets are saying. On average they think a 7% fall within a year. They used to say a 10% rise. Thats quite a change in opinion! reason being, is because cheap credit is being eroded, without it people cannot get th emoney together needed for todays asking prices. Therefore they have to come down, in order for deals to be done.
I would have thought that your previous experience would make you very cautious, and given you experience that flats would be the worst off if the situation repeated. Take time to do some research and read through this thread maybe. There's enough evidence out there.

codger

wenthome wrote: »

We are about to buy a property which is a flat, which is not managed and does not have a service charge.

If you're purchasing at a price sufficiently discounted to take account of falling property values, then why worry? If you aren't, and have only managed to shade a couple of per cent off a top-of-the-market valuation, then be it a flat or a house, right now ain't a good time to buy anything.