Nationwide March -0.60%

danrees

By my calculations - if the Nationwide index stays at March 2008 levels then there will be a 0.67% YOY fall for April 2008 (0.5% increase seasonally adjusted).

If prices stay at March 2008 levels until September, there will be a 3.04% YOY fall (since September 2007), which is a 1.8% fall SA.

However, if you assume that prices continue to fall at 0.6% every month until September (cumulatively a 3.54% fall over six months based on March 2008 prices), then seasonally adjusted prices in September 2008 will be down 5.3% year-on-year.

Not hard to see how even a moderate fall in prices or even stability in the short term will cause the YOY figures to drop significantly.

Remember real inflation (RPI) is near 5% as well so in real terms we may have an 9%-10% drop by September 2008.

My calculations show that if prices start to drop on average by 1% monthly, then by November there will be a YOY fall of 10% (SA) (cumulative 7.3% drop from March 2008).

carolt

Also, as soon as house prices go y on y negative, the whole 'house prices only ever go up - look, annual figures are still showing gains!' crowd will melt away, and the hopes for stagnation will be replaced by panic.

Plus any remaining buyers will disappear, and all the lenders will tighten their lending criteria still further.

Glad I'm not trying to buy now, TBH. All this stuff about tightening lending criteria means I'm sure we wouldn't be able to buy anywhere half-way decent now anyway. And of course, if we can't (on good income), then nor can the vast majority of others - therefore prices will HAVE to fall to meet the revised ability to buy.

dannyboycey

As soon as YoY negative appears, I think the media will have a field day. They may wait for YoY neg from the Land Registry as opposed to Nationwide / Halifax though, which would mean another 3 month wait at least. Interesting times ahead.

Rover

Nope. Long, slow correction. All the way into 2011.

Turnbull2000

I hope the market doesn’t go Pete Tong too much too soon. My soon to be divorced sister is selling and downsizing in the coming months. Her observation from the local property pullouts is that asking prices have dropped some 10% in the past year, so is a wee bit worried. Their 3 bed terrace was valued at 190K last summer, so it’ll be interesting to see what figure comes out post-crunch.

On another note, my young colleague at work who has a sizeable parental deposit and eager to buy a new build 2 bed flat, has decided “house prices are gonna crash aren’t they, think I’ll wait till it’s cheaper like”. That’s my boy!
:beer:

pinkshoes

RHemmings wrote: »

What if house prices start going down. Which doesn't seem unlikely. Why would you want to hold onto a devaluing asset?

Because I'm sure in 27 years time it'll be worth more than I paid for it, then I can sell it, and have some fun with the money, and hopefully retire at 55! Yes, I know there's other methods of investment, but for a long term thing, I'm happy investing in property, as people have to live somewhere. Private pension will kick in at 60...

mystic_trev wrote: »

I somehow doubt it. How will you raise a mortgage? Even if you've got 50% equity in your Property, you'll have problems :rolleyes:?

You claim to know alot about my finances... would that be your mystic ability?

I'm not going anywhere for at least 3 years, maybe even 8, but even after 3 years, allowing for a 2% "inflation" rent increase on the current level, the rent would more than cover the repayment mortgage.

?? So how do other people do it? Otherwise we would have no privately rented accomodation available, so a large % of people who can't get a mortgage to buy (for same reason you're saying I won't be able to get a BTL mortgage), and can't rent because you're saying that people can't get a mortgage for a BTL so thus no houses to rent. So where do these people go? Are the council going to buy up all the houses and rent them out? Are you implying we'll have just council houses and privately owned houses, and the private rental market will disappear?

RHemmings

pinkshoes wrote: »

Because I'm sure in 27 years time it'll be worth more than I paid for it, then I can sell it, and have some fun with the money, and hopefully retire at 55! Yes, I know there's other methods of investment, but for a long term thing, I'm happy investing in property, as people have to live somewhere. Private pension will kick in at 60...

You can sell the house now, and buy it or a similar property post-crash.

Think of it this way. If there was a bank account that would give you negative interest rates for the next ten years (so that your principle amount went down), then reverted to CPI, so that in 27 years, the amount in the account would be worth more than it is now, would you put or leave your money in that account? Or would you move it somewhere else in the meantime until the interest on the other account changed to positive.

Turnbull2000

Maybe they'd snap them up from all those rent-to-buyers who have long voids, a depreciating asset and failed to pay their second mortgage. Just speculating like you though. No rent-to-buyers = no private rental lol. And how do other people do it? Many can't. Hence they dominate the auction rooms.

mystic_trev

pinkshoes wrote: »

?? So how do other people do it? Otherwise we would have no privately rented accomodation available, so a large % of people who can't get a mortgage to buy (for same reason you're saying I won't be able to get a BTL mortgage), and can't rent because you're saying that people can't get a mortgage for a BTL so thus no houses to rent. So where do these people go? Are the council going to buy up all the houses and rent them out? Are you implying we'll have just council houses and privately owned houses, and the private rental market will disappear?

Simply because most Lenders will now only Loan to Pro Landlords with a decent LTV on their Portfolios,or ones like me who don't have any Mortgages on their Properties. Pop down to your Bank and see how long it takes them to stop laughing after you've asked for a BTL mortgage :rotfl:

Generali

The annual rate of growth is the lowest since 1996.

Having said that, according to the report, "only 3% believe [house prices] will be much lower [in 6 months time]". About 2/3rds reckon prices will be the same or higher in the same period.

The British belief that property investment is a one way bet remains a source of awe to me. Perhaps they're right but it's looking increasingly less likely.