House prices: 50% falls before fair value

mr.broderick

PhilDS wrote: »

There's plenty of cash out there, it just costs more. I put my and my wife's income into the Nationwide "How much can I borrow calculator" and was surprised at how much they would lend us in the current climate.

Income per year = £58k
Willing to lend = £246.5k

What's that...4.25 times salary. Our mortgage is currently way below that figure, so I'm not worried about remortgaging in October. The rate will be higher, but you have to expect that over 25 years or paying a mortgage!

Stop scare mongering.

But without this we'd have no members

PhilDS

mr.broderick wrote: »

But without this we'd have no members

True. And it would make for a boring forum.

firsttimetom

Scare Mongering?

Since when has wanting to own your own home scare mongering?

And Houses are already down 4% from Peak according to both Halifax and Nationwide.

Houses are vastly overpriced. End of Story. They will come down, but no one is sure how much by. I would happily predict 30% from peak.

And if anyone believes the Bank of England saying that optimism will soon return, then more fool you. The Bank of England have been hopeless throughout the entire credit crisis. My Dog has better economic sense than they do.

PhilDS

firsttimetom wrote: »

Scare Mongering?

Since when has wanting to own your own home scare mongering?

And Houses are already down 4% from Peak according to both Halifax and Nationwide.

Houses are vastly overpriced. End of Story. They will come down, but no one is sure how much by. I would happily predict 30% from peak.

And if anyone believes the Bank of England saying that optimism will soon return, then more fool you. The Bank of England have been hopeless throughout the entire credit crisis. My Dog has better economic sense than they do.

I was merely disputing the fact given that "there is no money around". There is. It just costs a little more.

dopester

PhilDS wrote: »

I was merely disputing the fact given that "there is no money around". There is. It just costs a little more.

Yes; but even now lending levels are down to 45% of what they were this time last year... as a result of banks not being able to borrow from money markets and LIBOR high (due to little confidence in other institutions).

And we're only a few months in to it. Expect banks tighten lending further when further price falls become apparent. They hate to lend in a falling market. Why lend £100,000 of cash, which already is limited to lend, when you fear it will only be worth £85,000 in attainable value in a few months time if lent out to fund a house purchase.

Study other deep recessions/depressions for evidence of how the banks will react... with significant numbers of refusals being "bank policy" and other refusals being the condition of the borrower.

Anyone counting themselves rich cause their house is worth £xxxxxxxx amount will find out that money locked in assets is not real wealth at all if you are forced to sell. 50% is my minimum estimation for falls. You read the press of an "avalanche of redundancies" possible in coming months? Don't say you weren't warned by me of 95% falls in some areas. House prices are at orbital levels and are coming back to earth.

abaxas

dopester wrote: »

Yes; but even now lending levels are down to 45% of what they were this time last year... as a result of banks not being able to borrow from money markets and LIBOR high (due to little confidence in other institutions).

And we're only a few months in to it. Expect banks tighten lending further when further price falls become apparent. They hate to lend in a falling market. Why lend £100,000 of cash, which already is limited to lend, when you fear it will only be worth £85,000 in attainable value in a few months time if lent out to fund a house purchase.

Study other deep recessions/depressions for evidence of how the banks will react... with significant numbers of refusals being "bank policy" and other refusals being the condition of the borrower.

Anyone counting themselves rich cause their house is worth £xxxxxxxx amount will find out that money locked in assets is not real wealth at all if you are forced to sell. 50% is my minimum estimation for falls. You read the press of an "avalanche of redundancies" possible in coming months? Don't say you weren't warned by me of 95% falls in some areas. House prices are at orbital levels and are coming back to earth.

Only 95%?

If you look back to the last housing bust, whole areas went into negative valuation. IE people couldnt even give it away.

kristianwilliams

PhilDS wrote: »

What's that...4.25 times salary. Our mortgage is currently way below that figure,

:rolleyes: Kinda puts the fact that banks were lending "9 times" salary to people with lower incomes than yourself into perspective. I wonder how much you would've been offered a year ago?

JonnyBravo

firsttimetom wrote: »

My Dog has better economic sense than they do.

Never mind the dog which could "say" 'Sausages'..... I want to see firstimetom's dog filling in a form for a credit card.... obviously after doing the sums to check he's getting the best deal for himself

MrDT

abaxas wrote: »

Only 95%?

If you look back to the last housing bust, whole areas went into negative valuation. IE people couldnt even give it away.

I caught a Top Gear repeat t'other day on 'Dave'; Clarkson was in some depressing ex-mining town somewhere in the North, proper ghost town due to unemployment etc... There was a house there valued at £0 (the premise being sell your house, buy this insane car, and live in this free house).

This VT must have been filmed about 3-4 years ago, so if you could 'buy' free houses back then, I'd expect the same to be true in a year or two!

And unemployment will likely match that little mining town across wider stretches of the country in a couple years time too (not that I'm particularly looking forward to that )

HammersFan

MrDT wrote: »

I caught a Top Gear repeat t'other day on 'Dave'; Clarkson was in some depressing ex-mining town somewhere in the North, proper ghost town due to unemployment etc... There was a house there valued at £0 (the premise being sell your house, buy this insane car, and live in this free house).

This VT must have been filmed about 3-4 years ago, so if you could 'buy' free houses back then, I'd expect the same to be true in a year or two!

And unemployment will likely match that little mining town across wider stretches of the country in a couple years time too (not that I'm particularly looking forward to that )

Which must a be relief to you sine you can stop saving for a deposit right now as really nice desirable house will be worth £0 in no time. Can't wait!

Not that there's any scaremongering on here of course.