prices aint budging

johnycoldears

pickles110564 wrote: »

Oh I see, you are a desperate FTB that has just had the penny drop and realised that what Broders and I have been saying all along is correct.
It is up to the seller what price they want for their home not what the doom mongers are trying to scare them into thinking what is happening.
Just because someone posts something you,!!!!!!?,Carolt does not like you throw your toys out of the pram.
Get real the green shoots are poking through.

Pete0926Some sellers who are not desperate to sell, are either just leaving them at or near original price, or withdrawing from the market.We have just put our house on the market at 10 percent below valuation, but we are not desperate, we have a bottom line and will stick to it.

Well done mate, you are exactly what we have been talking about a sensible seller putting their home on for its value.

By green shoots do you mean moss or algae ?

As in "a rolling stone gathers no moss" so a stationary (in terms of sales at least) housing market presumably does.

Or is it a stagnant housing market growing algae ?


Green shoots my a**se!

boinging_2

obsessed_saver wrote: »

Yes, but, if generally people are still ok with repayments, and are not "distressed", then they wouldn't be forced into dropping their prices, would they?

But then why have your house on the market in the first place. There must be some desire to sell. Plus as we all well know, if that seller is trading up the savings will be greater as prices fall.

Paul_N_4

EdInvestor wrote: »

I'd have thought the cause was pretty obvious.The banks have no money to lend.Mortgage approvals are half the normal level.

Sellers will be wise to wait until this situation rights itself before subjecting themselves to the runaround as detailed on this thread.

The current house price figures are looking more spurious by the day, especially the ones based on mortgage approvals from the banks that have given up offering mortgages.

There is nothing to right. Banks are not now able to raise ludicrous amounts of money like they have done in recent years. There isn't the money sloshing about in the banks to sustain house prices at the level they were last summer.

It took that money to get house prices that high, now that money isn't there, banks have to be more cautious who they lend to. Only when house prices come down will they lend more freely, because the money they do have will go further. They also risk pumping money into a falling asset if they lend big mortgages now.

The way I see it, banks/building societies don't have as much money to lend as they used to. They're restricting mortgage lending by demanding large deposits (10%+ to get good rates) or 5% but at a higher rate, to protect themeselves from the depreciation of the house. They're also demanding high LTVs on remortgages for the same reason.

Once house prices fall to a level where they look to stabalise, they'll start lending more freely again because the asset is not at risk of depreciating.

For example, a bank has £300,000,000 to lend. Is the bank going to lend all that NOW, to buy 1000 houses @ $300,000 each, with high LTV, even when the house is likely to lose 20% of its value over the next couple of years, will result in their assets being written down, and a portion of the homes likely to be repo'd?

OR, are they going to wait for the falls (by restricting lending in the mean time), so that their £300,000,000 can afford to buy 1500 houses @ £200,000, without the risk of the asset falling further in value, and the likelyhood of repo reduced due of the smaller debt to service?

Looks pretty simple from a business perspective. Of course they still have to dish out mortgages in the mean time to stay in business, but they're shielding themselves from loses by demanding high deposits and high LTVs. 100%+ mortgages are extinct and low deposts (5%-10%) have a higher mortgage rate, again, so the banks shield themselves from loses.

THIS IS NOT GOING TO CHANGE UNTIL HOUSE PRICES FALL TO A SUSTAINABLE LEVEL. And a sustainable level is ultimately governed by the risk the banks want to take, and how much money they have to lend.

All this talk of waiting it out until things return to 'normal' is complete BS. The money is no longer being rasied by the banks to return to those levels of summer '07.

So to those on here talking about mortgage lending returning to 'normal' and by that I expect you mean 100% mortages, lower mortgage rates, higher salary multiples, please explain to us how the banks are going to raise the cash they need to do this? Considering the method in which they raised the cash before has ended in disaster and wrecked balance sheets?

phil_b_2

boinging wrote: »

But then why have your house on the market in the first place. There must be some desire to sell. Plus as we all well know, if that seller is trading up the savings will be greater as prices fall.

Some will want to upgrade, but only if the price for their house is right, and some will want to downsize perhaps and free up equity, but if those dont NEED to sell I'm sure they will contently rattle around in their current over-sized house a bit longer.

As for those trading making bigger savings, I dont agree we all well know that. In theory if all houses drop 20%, a 400k house will fall more than a 200k house yes, but that is a very black and white way of looking at it.
How much both the 200k and the 400k house fall will depend larglely on their location, the type of property, and some other things.

Remeber that average house price falls are exactly that, an average, not a fixed rule for each property.

The person in the 200k house could see their value dropping at 10% while watching the taget house in the wealthy area at the other side of town only dropping 6%. They would then NEED 'x' amount for their house, or they probably wont bother moving.

Pobby

Generali wrote: »

I suspect that it's a reference to Norman Lamont who, as Tory Chancellor of the Exchequor, used to talk regularly about "The green shoots of recovery" when discussing when the economy was going to come out of recession.

Ahhh, I remember that well. Took years before they showed up. I also rember the ``light at the end of the tunnel``.Turned out to be Norman Lamonts bicycle lamp!

skap7309

johnycoldears wrote: »

By green shoots do you mean moss or algae ?

As in "a rolling stone gathers no moss" so a stationary (in terms of sales at least) housing market presumably does.

Or is it a stagnant housing market growing algae ?


Green shoots my a**se!

Haha brilliant take! :T

Austin_Allegro

Two points I don't think have been made yet:

1. Whilst we may not see forced sales of pprs (principal private residences) for a while, if at all, I think we WILL see a lot of BTLs/holiday homes coming on the market in the next year, which is going to increase supply and drive down prices. Anecdotally, in north London where I am, there seem to be a lot more BTL type flats on the market for sale, or for lower rents than last year.

2. Whether the banks do or don't have enough money to lend out is immaterial - IMO the marked peaked because affordability had been reached; it didn't matter how much money the bank lent out, because they ran out of ways to keep monthly payments affordable - you could see this was happening because of things like IO mortgages and 'buy with 12 friends' nonsense. So even if the banks miraculously get more money to lend out (probably through increased fiat money supply or some such fiddle) prices won't rise unless wages go up, which doesn't look likely either.

neverdespairgirl

Pobby wrote: »

Ahhh, I remember that well. Took years before they showed up. I also rember the ``light at the end of the tunnel``.Turned out to be Norman Lamonts bicycle lamp!

I thought it was an express train coming the other way.....

Generali

neverdespairgirl wrote: »

I thought it was an express train coming the other way.....

Pity the poor people that live in Folkstone. The light at the end of their tunnel is France!

brit1234

phil_b wrote: »

Remember that average house price falls are exactly that, an average, not a fixed rule for each property.

I think we all can agree we are going to have a far bigger fall in prices in the next figures from Nationwide and Halifax. We are probably looking at +3% falls based on tighter lending conditions and public awareness of the downturn a couple of months ago.

A average 25% fall this year alone is increasingly likely with nothing to show improvements on the horizon as the credit crunch and the economy get worse.:exclamati