Has anyone seen an impartial review of the house price situation?

ManAtHome

mr.broderick wrote: »

I am just about the most impartial poster on here cause it suits me either way and i don't think we'll see a crash

I'm also impartial (have a house which I'll swap for one around the same value when I retire), but have a different view. Britland economy is largely dependent on the finance "industry", retail, and the public sector...

Finance - the "credit crunch" hasn't gone away - every month the Fed, ECB, and (to a much lesser extent) the BoE sling a few more dumper-trucks of cash into the market, everything blips up for a week, then continues the trend downwards. The big players are turning up new write-offs every few weeks, and the smaller players are going to the wall as the bigger players try get their cash out first. So they're not going to be in the mood to sling handfulls of cheap debt around for afew years.

Retail - went ok in January as everyone moved their prices a smidge above cost to keep the cashflow rolling. The punters are running out of cash and not too many offers of easy credit around any more. I suspect the guys at the top will be thinking "restructuring" rather than reductions in executive pay.

Public sector - nulab is as skint as most of the punters. Booming economy for the last 10 years and we're borrowing ever increasing amounts of money..? Little room for borrowing even more (or more sensibly reducing taxes) now things are slowing down. Keping public-sector pay increases around 2% and/or vastly increasing productivity might be more than a bit tricky.

So, not sure where the cash is coming from to keep GDP (and asset prices) expanding faster than net pay rises.

neverdespairgirl

mr.broderick wrote: »

Posters like carolt,missmoneypenny,neverdespair girl etc who have gambled their lives on the housing market will always talk down the market and prophecise a crash cause it suits them.

Ummm - "gambled my life away"? What on earth gives you that idea? I'm happily living in a nice flat, savings lots of money, and enjoying my OH and our son.

asandwhen

just in relation to what jaype said "Add to that the fact that many people don't have huge amounts of equity in their homes - either they have spent it via secured loans or they bought in the last few years and had to get 90 percent mortgages"

Most people do have huge amounts of equity in there homes - i cant remember exact figures but some were published a few months ago saying that the we are in £1 trillion of mortgage debt but housing stock was worth 4 or 5 times that.

dopester

SimPaul wrote: »

But the main points behind stagnation are very strong ones:

1) employment is high.
2) interest rates are low, and will stay low for the next few years.

And how long will employment levels stay high?

The UK is highly dependant on the City, and the wealth effect from 10 years of staggering house-price-inflation.

Compared to many other EU countries - and even the US.... I fear for the UK.

SquatNow

asandwhen wrote: »

i cant remember exact figures but some were published a few months ago saying that the we are in £1 trillion of mortgage debt but housing stock was worth 4 or 5 times that.

I love these sort od comments... they always come from people with no grasp of economics.

Even Mervyn King said "House prices are opinion, Motgage debt is real"

You say the UKs houses are worth £5 trillion. I say they are worth, for the sake of argument, £1 trillion.

Which one of us is right.

The only way to realise that value... to find out the answer, is to sell all those houses.

What would happen if every homeowner in the uk decided to sell their house tommorrow?

Anyone want to hazard a guess????

IveSeenTheLight

SquatNow wrote: »

I love these sort od comments... they always come from people with no grasp of economics.

And your comments are always well founded with a foot on reality......

SquatNow wrote: »

I love these sort od comments... they always come from people with no grasp of economics.

Even Mervyn King said "You say the UKs houses are worth £5 trillion. I say they are worth, for the sake of argument, £1 trillion.
quote]

Very true, the house valuation may go up or down, but the mortgage needs to be service

SquatNow wrote: »

The only way to realise that value... to find out the answer, is to sell all those houses.

Not true. A property may be valued at X while a seller may be willing to accept an offer less than X or request and receive more than X

People do pay above and below valuations prices and therefore get a bargain or pay over the odds

However I get your thinking in regards that the sale price is the mutually agreed valuation between two persons.

What the valuation is today, may not be the same next month or the month after.
We have seen years where the price each month has increased and now in some areas where upon each month the average valuation is dropping

SquatNow wrote: »

What would happen if every homeowner in the uk decided to sell their house tommorrow?

Anyone want to hazard a guess????

Not very realistic question is it.
Reversing the hypothetical question you pose: -

If after any house price correction (10, 20, 30% whatever), what would happen if every non home owner in the UK decided they wanted to bid on available houses atthe same time

Anyone want to hazard a guess???

skap7309

SimPaul wrote: »

But the main points behind stagnation are very strong ones:

1) employment is high.
2) interest rates are low, and will stay low for the next few years.

Going from your original post, on the other side of the coin there is also people who refuse to believe what is happening. Only this week they were reporting near record-breaking falls in prices, new buyer applications and mortage approvals. These are FACTS not OPINION.
The average UK wage is approx £26k and the average house price is approx £196k. It is just not sustainable.

Richard_Webster

Also please remember that quite local conditions can make a difference. National newspapers and lenders tend to give statistics for the whole country or for large "regions" which aren't really relevant when broken down in the specific areas.

People talk about the great boom of 1989. Where I am, the market stopped dead at the end of July 1988 and to start with prices went down quite slowly, but by 1992-5 prices were dropping more quickly. A typical 3 bed semi went down to about 70% of its Summer 1988 value but a studio flat crashed to about 40% of it! As I understand it, in the North in 1989, prices were still catching up with wage inflation and conditions were different.

So my point is that whatever happens, it will vary quite a lot from area to area, and it is dangerous to make too many assumptions based upon broader statistics.

I've seen a website which advertises online estate agency where they try to value property by taking recent Land Registry information for sales in the postcode and applying percentage adjustments since each sale in accordance with house price. inflation statistics. I have looked at some local examples of properties that I have been dealing with and their figures are woefully out in terms of the actual prices now being paid.

asandwhen

SquatNow wrote: »

I love these sort od comments... they always come from people with no grasp of economics.

Even Mervyn King said "House prices are opinion, Motgage debt is real"

You say the UKs houses are worth £5 trillion. I say they are worth, for the sake of argument, £1 trillion.

Which one of us is right.

The only way to realise that value... to find out the answer, is to sell all those houses.

What would happen if every homeowner in the uk decided to sell their house tommorrow?

Anyone want to hazard a guess????

I love it when people try to come accross as some financial whizz and cant even spell

Pez2

mr.broderick wrote: »

i've got a horrible feeling prices will push on again in a few months when ftb realise the crash aint comin and mortgage themselves to the hilt to buy.

They might want to, but the question is whether the mortgage deals are going to be available for them to do that? Seems from the mortgage boards that the lending criteria are getting stricter by the week.