RICS: worst set of figures since records began

merlinthehappypig

EdInvestor wrote: »

http://www.guardian.co.uk/money/2008/may/13/houseprices.mortgages

Shortage of stock is limiting price falls.


... or rather trying to.But people are not stupid. Why would you put your house on the market at the moment when you know many people can't get a mortgage and the likelihood is the chain will fall through? Better to remortgage and build that extension/loft conversion.How many times do deals have to fall through before people get fed up and turn to the thriving rental market?

We will end up with a market in deep freeze, consisting of a few decent properties which will hold their value and a load of rubbish old stock which will either sit there forever unsold or provide a "bargain" for the likes of people who post on this forum.

This type of market won't cause a crash.The big losers will be the EAs and the mortgage brokers.

Unusually I am actually inclined to agree with Edinvestor, to an extent anyway.

At this stage there isn't the impetus to force the majority of people to sell their house. Yes, some people are struggling with the mortgage and some have huge debts which they borrowed against the perceived value of their house. There will always be idiots who over commit themselves, though, so that is nothing new.

Certainly our perception, when trying to buy and get a decent price at the moment is that there is very much a two-tier system in operation.

On one hand we have the people who have to sell and they are having to take very large hits indeed on their price expectations because so few people are in a position to buy.

On the other hand are those who have grand ideas about the price and who would like to, but don't have to, sell. These are largely people who have had the house for sale for a year or more and have a priced engrained in their minds and won't come down from that.

We've viewed two houses next to each other in the space of the last 7 months or so and, whilst they aren't identical, they can be compared.

One's been for sale for over a year, has 3 proper beds and a poor annexe conversion from a garage making another bedroom.

Next door has been for sale for a few weeks, has 5 beds from a really nice loft conversion and extension.

Both have about 2 acres of sloping land.

The first people would like to sell and have it on for £485000, valued last year and haven't reduced the price.

The second people have to sell because of re-location of work and have it on for £435000 and will take £400000 according to their agent.

In the real world I would estimate that the cheaper house is worth about 20% more than the more expensive one.

I think we will see a lot more of this in the coming months. Huge reductions from those forced to sell and little or no reductions from those who don't have to sell, with their properties eventually coming off the market as the agents lose patience.

MissMoneypenny

adr0ck wrote: »

i think oil prices, food prices etc etc are shooting up mainly due to supply and demand

i.e. demand is getting bigger and bigger year on year and supply is getting smaller (failure in food crops etc)

i think these items will steadily get more and more expensive no matter what happens to interest rates, that is of course unless we can persuade the rest of the world not to live like us (that would be fair would'nt it?)

There was a programme on last night about the rising cost of food. They said that it was due to supply and demand (China and India now getting richer and want what the west have had), the world polulation is growing and people from poorer counties moving to richer countries, so more food needed. Crop failures, so it was dearer for bread, rice, pasta and to feed cattle. Plus a lot of land is now being used to grow maize for bio fuel in a bid to find a cheaper alternative to oil, instead of growing food. So the end of cheap food.

Time to grow some more home grown vegetables and go veggie.

MissMoneypenny

EdInvestor wrote: »

Last time if you remember, most with a mortgage were on the SVR and it went up to 15%.from around 9% so everyone was affected by rocketing interest rates.

Those coming off their low fixed rates now are having to face bigger percentage rises in their mortgage payment eg 4% to 5% = 25% rise, 4% to 6% = 50% rise. Food, utilities and oil bills have rocketed in a short space of time too. It's a lot of extra money to find when wage increases have been low.

Looks like taxes will have to go up too, to cover the extra borrowing that the government have messed up on such as the latest 10p fiasco.

meanmachine_2

Price falls will be limited? Don't make me laugh.

I had an agent phone me today offering me a property on at 315K for just 265K, cos they "needed to move".

I wasn't interested, as the property is only "worth" 250K or less in my eyes, in the present climate.

Still, that's 15% off, without me even haggling.

That's what's happening in the REAL world, Edinvestor.

Zammo

teabelly wrote: »

It doesn't matter if house prices crash or not. If lenders ain't lending then you still can't buy diddly.

If lenders ain't lending then prices will absolutely fall through the floor. You'll be able to buy a 3 bed semi with cash.

:money:

monkeymaster

adr0ck wrote: »

i think oil prices, food prices etc etc are shooting up mainly due to supply and demand

i.e. demand is getting bigger and bigger year on year and supply is getting smaller (failure in food crops etc)

i think these items will steadily get more and more expensive no matter what happens to interest rates, that is of course unless we can persuade the rest of the world not to live like us (that would be fair would'nt it?)

Actually demand for oil tends to fall during a recession, as the worlds biggest economy is currently slipping into. The increase in oil is primarily due to the weak dollar caused by the Federal Reserve slashing interest rates and forcing ivestors into commodities such as oil and even rice/wheat. Of course the rising oil price also has a knock on effect on food, vis the transportation costs to get products onto the shelves.

adr0ck

monkeymaster wrote: »

Actually demand for oil tends to fall during a recession, as the worlds biggest economy is currently slipping into. The increase in oil is primarily due to the weak dollar caused by the Federal Reserve slashing interest rates and forcing ivestors into commodities such as oil and even rice/wheat. Of course the rising oil price also has a knock on effect on food, vis the transportation costs to get products onto the shelves.

this has been true in the past

but we now have china and india in the mix

ManAtHome

Turnbull2000 wrote: »

RICs, CML, Haliwide media rent-a-quotes these past three years...

2006 "House prices will rise as the fundamentals remain strong"

2007 "House prices will stagnate as the fundamentals remain strong"

2008 "House prices will fall only a small amount as the fundamentals remain strong"

2009?

:rotfl:

Hmmm, dictionary definition of fundament being anus or "butt-tocks" (wudja like a chocolate?)

2009 "House prices will fall a bit more than a small amount but could increase by a gynormous amount as we're talking out of our collective arrises"..?

monkeymaster

adr0ck wrote: »

this has been true in the past

but we now have china and india in the mix

This is true to an extent but if demand for Chinese made products falls from the US and ourselves then China will suffer too. I'm sure you can't attribute the doubling in the price of oil in recent times to extra demand from India and China... Although they may have some impact the primary cause is curreny fluctuations.

LittleMissAspie

Pennywise wrote: »

However much "wishful thinking" there is around, the house price crash is only just starting. It was a bubble hyped up by the Govt, EAs, BTLers and builders - there was never anything substantial supporting it.

The huge loans were supporting it. Now the huge loans have gone so prices can only go down.

I think we are just starting to move out of denial/stagnation, at least where I am. There's been more price drops coming through on Property Bee, and for decent amounts rather than the pathetic 2-4k that I was seeing a few months ago. Whether these drops will result in sales remains to be seen.