Housing market continues to slow....

meanmachine_2

dougk wrote:

So therefore you may as well pay £200k at 4.99% than £150K at 7%, because in reality the overall cost is the same (unless you have bags of savings!)

You're actually suggesting people take out a larger loan than might be necessary? Crazy.

£150K @ 7% is preferably to £200K @ 4% because.... a 4% IR can only go up, whereas if rates fall, I've still only got a £150K mortgage.

Surely you can see that?

deemy2004

Also take £200k into account as a larger multiple of earnings than £150k for the effects of gearing and possible negative equity.

meanmachine_2

OK, quick update on the two properties opposite me that were up for sale. Well, now they're not.

One of them is apparently "sold", but the sign went up, ooh, at least 2 months ago and no one's moved in yet. I'm thinking problems with the chain.

The other one was taken off the market (it was ridiculously overpriced), and is now "to let", again at a ridiculous price. More toilet that "to let", but then what do I know? One month and waiting on that one...

I can only conclude that certain homeowners are either greedy, stupid or both.

deemy2004

My advice -

Buy toilets

Don't flush all your money away...

loanranger_4

Just came accross this aticle titled 'Crash what crash?'

http://news.bbc.co.uk/1/hi/business/4076194.stm

Where we have Ed Stansfield from Capital Economics eating a little humble pie.

Looks like the crash may have been averted until next year ?

meanmachine_2

loanranger wrote:

Just came accross this aticle titled 'Crash what crash?'

http://news.bbc.co.uk/1/hi/business/4076194.stm

Where we have Ed Stansfield from Capital Economics eating a little humble pie.

Looks like the crash may have been averted until next year ?

And what will the writer of that article be saying come September when all housing indices have turned negative?

If you read the article, the only "expert" without an interest in talking up the housing market is the guy you've quoted.

And that firstrungnow website is an absolute disgrace. Any site encouraging FTBers into the market today should be personally liable for any repos that result. By the way it's a front for the Bradford and Bingley. Surprised?

GingeG

I dont think they will crash here is another report

http://news.bbc.co.uk/1/hi/business/4081282.stm

GingeG

People are still chasing property basic economics suggests that supply and demand will dictate prices.

There are too few homes for so many buyers therefore property will still be a good investment "safe as houses"

grebbo

In my opinion, and I do work in the industry, there isn't going to be a substantial crash. Prices certainly wont increase substantially over the next 5-10 years but they're not likely to drop much either. If there are any big decreases it will be in poorer areas - There will always be demand, even during a recession, for quality homes in nice areas with good schools etc.

Property is a long term investment and over a 10/20 year period will always be a safe bet. Anyone looking to get into the BTL market for a quick buck should stay clear and instead look overseas.

I really can't see a mass of property decreasing by 30% as has been suggested. People will just hold onto it and not sell. You might be lucky and find someone desperate to sell and accept a 30% price reduction but you'd have to get in before the property investors who ALWAYS get first refusal

meanmachine_2

GingeG wrote:

People are still chasing property basic economics suggests that supply and demand will dictate prices.

There are too few homes for so many buyers therefore property will still be a good investment "safe as houses"

This is very much the "layman's" view, shared by many and explains why, in the longer term - and we're talking FIFTY years here - prices rise. But they only rise, on average 2.5%.

Think about that figure Ginge. How does 2.5% compare with what we've seen of late? Is it a much higher figure or a much lower figure? And if it's much lower, than what do you think needs to happen in order to return to the market average? I'll leave you to do the maths on that.

By the way, if a fall in house price inflation from 25% at the beginning of 2004 to 0% today isn't indicative of a crash, I don't know what is.

The market, by the way, doesn't just crash overnight like the BBC guy seems to suggest. People don't wake up the next morning and see that houses are cheaper.

To grebbo, I'd ask you this - at the beginning of the year were you telling your clients that house prices will fall 5%? Or were you predicting a Spring Bounce? I'll predict that, in three more months you'll be suggesting everything will be fine, but that prices might fall by 10%. It's exactly what happened last time. No one in the property business predicted the crash and even while it was happening none of them admitted to it.

Just like now.

I'm putting my money where my mouth is. At the beginning of this year I was thinking of buying, looked at the market, read articles, analysed all the data and concluded that houses were 30% overvalued. If any one else takes a different view, that's up to them. But I can only suggest it's because they haven't done their homework and just base it on a hunch.