only anecdotal but USEFUL

hgllgh

movilogo wrote: »

The EAs (and sellers) firmly believes that following expected rate cut soon, things will again go back to normal (ie. house price that can only go up)

Inflation is going up again so the rate cuts may well not materialize and even if they do, lenders will not just switch back to the way they were selling mortgages before the credit crunch.

WTF?_2

carolt wrote: »

Yes, people wishing for 50% drops overnight are going to be disappointed - expect the whole thing to deflate gradually over a number of years. People don't willingly sell at a huge loss - for those at the top of chains, with plenty of equity built up, there is nothing to be gained for selling for less, unlike those lower down the chain. So increasingly, expect them to hang on for higher prices or just not sell.

At the moment, enjoy small falls if you're hoping to buy longer term. No hurry - enjoy your landlord subsidizing your rent in the meantime....

Don't forget that there are an awful lot of second and third properties out there which aren't 'paying their way'. How long can this state of affairs continue when the owner is coming under increasing financial pressure from an economy that's no longer booming, has less spare cash due to price inflation (a lot more than the 2% the government would like us to believe) and isn't seeing capital appreciation in the property?

Note that this scenario doesn't require an economic recession (which looks increasingly likely anyway) to happen ... just a moderate slowdown in both the economy and house price inflation which is already happening.

Then you've got the proposed CGT reforms in April which seem to be causing a lot of would be sellers to hold off in in the hope that they can make a large tax savings on their profits if they sell after April next year. Should the changes come into effect as planned, we'll see a huge glut of property on the market then.

fimonkey

carolt wrote: »

Yes, people wishing for 50% drops overnight are going to be disappointed - expect the whole thing to deflate gradually over a number of years. People don't willingly sell at a huge loss - for those at the top of chains, with plenty of equity built up, there is nothing to be gained for selling for less, unlike those lower down the chain. So increasingly, expect them to hang on for higher prices or just not sell.

...

Or rather sell now to release their equity and downgrade? Would that then put pressure on the 'middle' homes (2-3 beds) as there will be pressure from those wishing to get on the ladder in the first place as well as pressure from those above downsizing...... Might make the figures for such homes appear stronger for a wee while longer?

epz_2

SickStu wrote: »

I think the India, China effect is way overstated. There may be 2 billion of them but sadly ~1.99 billion of them don't have the proverbial pot to !!!! in.

last i hear off the bbc the AVERAGE wage in many parts of china, parts the size of europe was over £3,200 and inflation at over 10%. now it aint exactly great but with a cost of living pretty low it does give a hefty disposable income.

Generali

epz wrote: »

last i hear off the bbc the AVERAGE wage in many parts of china, parts the size of europe was over £3,200 and inflation at over 10%. now it aint exactly great but with a cost of living pretty low it does give a hefty disposable income.

China and India both have large and growing middle classes that increasingly are will to spend some income on discretionary consumption.

Buy Tata!

Nenen

seven-day-weekend wrote: »

I'm so glad I'm out of the Matrix.

I don't understand a lot of this, but what a worry it must be for people who are simply trying to buy a home.

Me for one!
I *know* we'd be silly to overstretch ourselves buying a house at the moment (risking negative equity etc etc) but I have a severe case of 'nesting instict'. Having owned our own house for the past 20+ years (until last March when we sold and have yet to find a house we both like and can afford in this more expensive area) I'm really feeling as if we're living in limbo while renting... still got lots of stuff in storage and packing boxes and don't feel like getting things sorted... but we could be in for a long wait!

Anyone else out there who knows the *sensible* thing is to wait but is finding that hard to do? Or anyone got any tips for how I develop patience and a sense of stability/security in a rented place????

bribri_2

Like the OP, I too have been advised by someone high up in the world of finance to sell up my flat in London and rent - even though that normally goes against her views of renting vs buying.

fc123

Nenen wrote: »

Me for one!


Anyone else out there who knows the *sensible* thing is to wait but is finding that hard to do? Or anyone got any tips for how I develop patience and a sense of stability/security in a rented place????

I know the feeling!! Can't offer advice but can send some sympathy......I'm summoning up the courage to post our dilemma (will soon) as the N Rock
and all the stuff it has thrown up has really mucked up our life plan!
Had an inspection today...some 19 yr old with a clipboard......but had hidden the illegal cat just in time!
Worse, we would buy this rental tomorrow if we could.
The thing that really gets me is the "not knowing"....do you remember The Kumars....grandad said "aah, but did you buy at the right time?".........

Generali

House prices have been propped up to a large extent by banks lending high multiples and not being too fussy about who they lend to*

These days they won't even lend to each other so if you're a 22 y/o barman claiming to be on £60k pa you probably have very little chance of leaving the bank with any cash in your hand.







*For example my LL is buying this place, it appears, on a self cert OO mortgage - I say that because the mortgage is over £280k, the house was bought for £300k and the rent doesn't match up with the rental cover rules. Oh and there's no way that he earns £50k pa so even on 5x income he doesn't come close to affording this place on a normal OO mortgage. Oh, and he pays an interest rate of ~7.5%.

A quick look at the electoral roll (a public document) would tell the bank he's not living here. I've got half a mind to open a savings account there to see if they notice!

epz_2

Generali wrote: »

China and India both have large and growing middle classes that increasingly are will to spend some income on discretionary consumption.

Buy Tata!

yeah, call me cynical but the best hope for peace in africa is china and india getting too expensive so they need somewhere new to outsource.