House Price Crash Discussion Thread

Lotus-eater

This shows only too well why we shouldn't (IMHO) have career politicians straight from school. They should be made to go out and get some experience for 20 years.

theblindman

Having just looked at the BBC website containing data from the Land Registry why is it that we are told there has been a 12% fall in prices across the country? Shrewsbury shows an increase in the average transaction over the past year and Oswestry, my home, shows a 2% fall for the year.
It may be that the oversupply of flats in city centres where proprty was going for crazy prices has collapsed be 20% + pushing up the average loss.
Also if developers are mothballing developments there will be a shortage of available housing in the short term, which surely can do nothing but to sustain house prices, the banks are reducing thier lending rates and I'm getting credit card offers ever day.
I think the media needs to find something else to talk about, the banks need the volume of business to maintain thier profits, money will soon start to flow around again
or am i completely mad?

Cannon_Fodder

short answer - yes...!

developers are mothballing because they cannot sell all the ones already finished. there's plenty unsold or coming onto the market to prevent slowing the crash down.

the 12% fall is, as you say ACROSS the country...an average. people were happy enough to have a general idea of the direction of house prices when they were going up at 10%+ for ages, why is it not acceptable to have a general idea of how they are going down?

there is, as you imply, a overstatement in the stats due to big drops on new-build flats, but you can hardly expect The Times to have a headlines "house prices not too bad in Oswestry" !!

the knock-on of those cheap flats is that other flats look expensive and houses look VERY expensive, so FTBs go into the cheap flats, and the other flats and houses have to drop their price in order to sell - especially with forced sales, through job-loss, death, relocation, family split-up, repossession, amongst other reasons.

that is plenty of turn-over in the market to provide stats across the country that will be heading down.

the next problem, is that EA and surveyors have to base their valuations on something, and if the Land Registry shows a similar property to yours that was a forced sale, say 10% down on what you think it should be, the stats cannot reflect that it was forced, its just a number. (you might be able to research it, but is a buyer going to care tha you say your house was not subject to death/job-loss/whatever?)

that's probably been happening a bit, but could still have some pace to gather. add-in impending recession because fewer cars are selling because people can't re-mortgage to release equity to buy one, and EA and builders going out of business, or at least shrinking, and thats more forced sales, to further undercut your own house position.

while rates have dropped back a bit, that has been for high deposits, around 60% LTV upto 75% LTV are reasonable compared to the last couple of years - but 90% rate is painful compared to someone's 3yr deal in 2005, and of course those 100% and 125% deals simply don't exist - which is more people going into repo because they cannot re-mortgage and/or afford the SVR.

plenty of reasons not to get your hopes up for Oswestry staying out of the double-digit effects in the short to medium term.

Mary_Hartnell

Has anyone got to the bottom of the suggestion that the Land Registry does NOT include forced sales, especially those dumped at auction?

A sale is a sale is a sale however it happens.
I'm not sure though that it is a good time to buy yet, even at knock-down auction prices.

dfarry

ebonylight wrote: »

Last july - as in 2006 - and our mortgage is fixed rate till July 2008 so we wanted to sell up before then anyway to get a new mortgage (not coz of any particular reason, i just thought if we have to change mortgage anyway we might as well buy a new house - female logic i guess)

I hope you lot are right and due to the crash we get a house we like for about the same as we sell this one - im just worried about us not getting back what we paid for this one

thanks people

Hi Ebony, I don't plan on reading 140 or so pages... but 11 months after you posted the message above I just wondered how things have worked out for you.

I think things are looking worse than we could have expected a year with predictions of a 25% drop in prices. We all know the market is massively inflated so price drops are necessary in my opinion - I'm just very sad about all the people that jumped on the housing ladder for lifestyle reasons (rather than pure investment) and may now lose alot of money and possibly even their homes.

I also remember the early 90's and there was alot of pain out there then.... every other night there was a tv programme about repossessions and spiralling interest rates. This made me very cautious so when I eventually did buy in 1994 for £55K) it felt like a very big decision. I'm still in the same house but could do with moving to somewhere bigger now that we have a family, but will now wait until at least 2010. Back in 2006 we come within days of buying a new house costing £305K the sale of our house was going to be £215K.... that would have left us with a £135K mortgage and frankly I am very glad that the deal fell through.

Paps_2

If you have a valuation done on a new build property off plan and then 6 months later when the property is complete they do a second valuation (as they do) and the price of the property has dropped, where do you stand on that? The mortgagae lender could only lend to you on the new valuation which would mean a shortfall from the original price?

chrisandanne

As far as I am aware paps if the valuation on a property (whether it is a new build or older property) is lower than the asking price, you ask for a reduction in the price...if the owner/builder does not want to reduce you have the option of putting in more money yourself to make up the difference. A x

Paps_2

Definitely putting in more money oursleves is the option we want to avoid!

vigesimal

Mary_Hartnell wrote: »

Has anyone got to the bottom of the suggestion that the Land Registry does NOT include forced sales, especially those dumped at auction?

Land Registry do not include distressed sales. They state this on their website.

chrisandanne

Paps wrote: »

Definitely putting in more money oursleves is the option we want to avoid!

In the words of the lovely m00m00...If the builder doesn't cry when you make your offer...it's too high. A x