House Price Crash Discussion Thread

Generali

KITCHEN1 wrote: »

"You read him and wonder, 'Why isn't every company run like this?'."...everytime I read him I come away wondering why our country is not run like his company !

Well for a start you can't sack the subjects that you don't like. Not since they found gold in Aus anyway.

cheeky_lil_monkey

Kitchen1 - I think you misunderstood.
When I said 'wordy' this was not to do with the length of post but more so the wording used.

As far as leaving it to younger, better qualified ppl ... with a wink added for sarcasm, a degree in PMI does not mean you become a property developer, think more along the lines of law and finance.

WTF?_2

A bit old but nonetheless an interesting insight into just how the whole house price boom has skewed the economy and the consequences, in the US:

http://news.bbc.co.uk/1/hi/business/7164898.stm

I think that it'll sound frighteningly familiar to many in the UK, though this seems to be an extreme example.

And for those ostriches that still insist that sub-prime is a US problem and not likely to affect the UK:

http://www.ft.com/cms/s/e3cf0dca-c09e-11dc-b0b7-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fe3cf0dca-c09e-11dc-b0b7-0000779fd2ac.html&_i_referer=

Almost one in five new mortgages written in 2007 was either dubbed “subprime” by the bank that loaned the funds or was made to a homebuyer who offered no proof of income, according to an industry trade association.

So, no danger of anything like that sort of US-style housing collapse happening in the UK then :rolleyes:

merlinthehappypig

We viewed 7 houses on Friday/Saturday. All have been on for at least 5 months. Four are still on at the original asking price, but three have recently been reduced.

These have dropped as follows:

£560000 to £525000
£600000 to £495000
£475000 to £415000 ( and the agents said they would take just under £400000)

Another one was sold new in March 2007 for £482000 (it's a one-off new build with land and stables so wouldn't usually suffer an initial loss of value like a new build on an estate) and is on the market for offers around £495000. Even if they got the full £495000, which they won't, they will still make a loss in real terms after taking the £14000 odd stamp duty and other legal costs into account.

It's only one example, but it does illustrate just how people are already being hit by falling prices and demand. They have paid too much in the first place, but of the 7 we viewed we thought it was the most reasonably priced!

brit1234

It's only a matter of time before the whole population realise how overvalued property is. There is nothing sustainable to keep prices at this level and finally people realise there isn't this so-called housing shortage especially as investor properties are flooding the market.:rotfl:

codger

brit1234 wrote: »

It's only a matter of time before the whole population realise how overvalued property is. There is nothing sustainable to keep prices at this level and finally people realise there isn't this so-called housing shortage especially as investor properties are flooding the market.:rotfl:

Yup. But there hasn't been much to sustain the justification for high prices for quite a while now -- well, apart from a Bank of England in thrall to a New Labour government in thrall to electorates it desperately needs to keep captive, amongst them the Northeast where Mr Blair delivered his farewell speech by congratulating all the local people on the "prosperity" they now enjoy thanks to the way their house prices have risen since 1997.

That Blair actually said that at all was breathtaking in its ignorance, but then, Blair was a self-serving charlatan from the moment he was elected so perhaps having conned so many it's been easy for him to con himself.

But that's no excuse for the morons who sat there applauding his speech -- New Labour party faithfuls all -- or for the smug gits who've remained oblivious to the fact that a housing ladder with half its rungs missing ain't a ladder at all.

Jonbvn

Times article this morning (16 Jan)

UK house price decline worst since 1990s slump

Falls in house prices across the country may now be at their most severe since the property slump of the early Nineties, according to bleak figures today suggesting that Britain's housing downturn is gathering pace.

merlinthehappypig

Similar article from the FT - possibly even more gloomy.

Confidence in the UK property market has hit its lowest level since the housing crash of the early 1990s, according to an authoritative survey of estate agents that shows even the rampant London market is in difficulty.

The Royal Institution of Chartered Surveyors (Rics) reveals on Wednesday that 49.1 per cent more surveyors reported a fall in house prices in December than the proportion reporting a rise, the gloomiest figure since November 1992.

New instructions to sell property rose in December for the first time in six months, according to the survey, suggesting some homeowners are keen to sell before the market worsens.

The sharpest increases in new instructions were in the North and London. Rics said this was “not ... a complete surprise, given the exposure of its economy to financial services”.

The survey has proved a reliable early guide to movements in the housing market in recent years. Economists will pay close attention to evidence that market conditions are now at their loosest since August 2005, after a third monthly jump in the stock of unsold property, now up 18.3 per cent from a year earlier.

Surveyors expect price falls in all UK regions during the next three months.
Simon Rubinsohn, chief economist at Rics, took some consolation from a slowing pace of decline in new buyer enquiries and said the market had been even looser in 2005 without prices falling on an annual basis.

However, most surveys have reported price falls in recent months and economists have been surprised at the speed of the slump in sentiment.
It also emerged on Tuesday that the UK’s commercial property market recorded its worst one-month performance on record, surpassing even the steep declines of the early 1990s.

Data from Investment Property Databank showed total returns fell by 3.7 per cent in December, month on month, marginally more than November’s steep decline and more than in any month since the IPD index was formed in 1986.
Ian Cullen, co-founding director at IPD, said: “The staggering feature of this year’s headline result is the pace of the market reversal it reflects.” As of May, commercial property was showing 12-month total returns “in the mid teens” while total returns for the 12 months through December are minus 5.47 per cent.

Generali

I think I've posted before that the reason that I think that completed sales have been falling is because of an imbalance in supply and demand - sellers wouldn't cut prices but buyers either couldn't (credit crunch) or wouldn't buy.

That situation can't last forever. Either demand has to rise (like in 2005) or prices fall to meet what buyers will/can pay. This could be a sign that the latter is happening.
I don't believe a thing until I see completed Land Registry prices though.

WTF?_2

The party is well and truly over and plummeting prices are now all but a certainty.

Perhaps we can at last forget about ghettoising posts about a now obvious house price crash into this one thread and discuss matters properly across multiple threads on the forum ..

.. or are the 'waaaah, I've sunk loads of money into BTL/I've MEWed my heart out' crowd still going to be vocal enough to kick up enough fuss to stifle proper debate and discussion?