Halifax Figs for May -2.4%

WTF?_2

Edale wrote: »

Looking at the Halifax report the index has gone down from 635.9 in March to 595.9 in May. This is 6.3% decline over three months, if this trend continued for the next 9 months prices next March would be down over 25% on March 2008. I struggle to see how they can remain so positive in their commentary considering the real squeeze on availability of mortgages, cost of mortgages and increase in fuel/food costs only happened in the last three months.

Quote Martin Ellis Chief Economist:

"House prices fell by 2.4% in May. Price falls should be measured against the significant gains in recent years. The average UK house price rose by more than £88,000, or 79%, between August 2002 and August 2007.

The decline in prices is caused by the difficulties created for potential house purchasers by the rapid rise in house prices in the last few years, a squeeze on spending power and the reduction in credit availability. These factors have curbed housing demand. High employment levels, low interest rates and a shortage of new homes support housing valuations."

Who are they kidding about low interest rates!

Interest rates are still very low. Even the 'real' rates offered to mortgage borrowers are very competitive relative to historical norms.

It's just that people have borrowed/desire to borrow such massive amounts that makes rates look too high and leads to the squeals of pain every time they go up a fraction (or even when they stay the same). And heaven forbid that you would have to cough up some cash of your own as a deposit in order to get a house loan!

baby_boomer

Halifax_Report wrote:

High employment levels, low interest rates and a shortage of new homes support housing valuations

And that's how they'll be reassuring their shareholders as they ask for an extra £4bn cash in a rights issue to boost spare capital levels.

So they'd better stick to their story .

hostman

Pobby wrote: »

Question for you guys? Given that we are in a falling market, what will happen to the myriad new build developments still in progress in most cities? Do you think these developers will still turn a profit?

The land the developer bought to build the properties would have been overly inflated, reflecting the high sale price of each unit they were expecting to achieve.

I have no idea what a developers profit margin would be, but if prices do conceivably fall 20%, surly that would be quite close, if not exceeded, their margins?

lostinrates

!!!!!!? wrote: »

Interest rates are still very low. Even the 'real' rates offered to mortgage borrowers are very competitive relative to historical norms.

It's just that people have borrowed/desire to borrow such massive amounts that makes rates look too high and leads to the squeals of pain every time they go up a fraction (or even when they stay the same). And heaven forbid that you would have to cough up some cash of your own as a deposit in order to get a house loan!

I'm not trying to pick a fight, just to understand

Surely people only have had desire to borrow large amounts as that is what houses cost now: large amounts!

In the recent rapidly accelerating market where prices where rising dramatically savings for many couldn't build at the same rate as house prices were rising. -I'm not saying they necessarily should have bought, maybe those people would be better renting for life, but I can see why they didn't in that market.

Also, I'm afraid apart from very recent times I don't know about interest rates 'norms'. The saftey index I calculate for paying interest would be 12%, is that too low? I have to admit at giggling at the word histroical though, as It made me hope wages don't return to a historical £12 a week or anything like that, lol. Is it PERCENTAGES an ratios of average wages to average interests we should be looking at? (I really don't know )

hostman

lostinrates wrote: »

Is it PERCENTAGES an ratios of average wages to average interests we should be looking at? (I really don't know )

Ratio.

Average wage: £24k
Average house (according to Halifax in their June report): £184,111
Ratio: 7.67

I.e., the average house is 7.67 times the average wage.

lostinrates

hostman wrote: »

Ratio.

Average wage: £24k
Average house (according to Halifax in their June report): £184,111
Ratio: 7.67

I.e., the average house is 7.67 times the average wage.

Thanks very much hostman! and historically? to average this, which we must to find a norm I can't think how to do that and account for inflation etc etc. And, even, what type of average to use:o (I really do want to understand money, I so wish I had learnt this in school)

adr0ck

one thing to bear in mind lostinrates is that on average 2 people now provide the household income (both via full time jobs)

this hasn't always been the case (used to generally be 1 full time & 1 part time)

i'm assuming this must have an effect on earnings ratio

how much i don't know - sure someone like generali will have a better understanding

pickles110564

!!!!!!? wrote: »

Houses will continue to sell in even the worst/toughest markets or did you think that the house market consisted of people only moving around for a hobby/leisure time activity?

I do, it beats going down the pub and getting wasted every week.

carolt

Generali wrote: »

I'm not convinced you believe what you post old thing. Prices and volumes are down. The banks aren't lending and most people don't have the cash to buy. You know these things and there's no amount of bluster will reverse where prices are headed. The only questions are how much do they fall and for how long.

As Yazz might have said, "The only way is down, Ba-a-by".

Sadly, it's the denial stage....

pickles110564

hostman wrote: »

Ratio.

Average wage: £24k
Average house (according to Halifax in their June report): £184,111
Ratio: 7.67

I.e., the average house is 7.67 times the average wage.

Even a thickie like me would not get out of bed for that low amount, where I work the lowest wage is £28k and that is without overtime.Perhaps sleepy suffolk aint that bad.