prices aint budging

pickles110564

brit1234 wrote: »

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

Sorry to disappoint you Brit but green shoots appearing in our area, FTB's have started making a move.
They cant believe in all the hype / trash you keep uttering from your keyboard.:rotfl:

pickles110564

!!!!!!? On a more serious note, if new mortgages advances are at record lows, where and what sample can they be basing these facts on?
Surely if only a small amount of property is moving how can they work out what % falls there are?
Thanx mate I know that you will be able to explain to me in simple english.

phil_b_2

brit1234 wrote: »

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

I've been thinking about it and I'm really not sure which way this months figures will go.

On one hand, I think sellers will dig their heels in and try to counter the price falls... I know this wont necessarily do them any good in the long run, but in the short-term a cut in falls will boost confidence somewhat.

On the other hand, I can imagine there being many more reported price falls this month due to all of those buyers who were 1-2 weeks away from completion at the time of the nationwide figures being released. I bet you many people abruptly reduced their offer in panic, gazundering their seller.
Completed sale prices for this month could take another hammering because of that.

TT1_3

August %'s will be most telling as sales that were agreed around the time the -2.4% figure came out should be completed by then.

Paul_N_4

pickles110564 wrote: »

!!!!!!? On a more serious note, if new mortgages advances are at record lows, where and what sample can they be basing these facts on?
Surely if only a small amount of property is moving how can they work out what % falls there are?
Thanx mate I know that you will be able to explain to me in simple english.

Well I'm not !!!!!!? but its a pretty simple question. Mortgage lending is down about 30-40%, which means a huge number of houses are of course still being sold. They base their data on these, same houses, just smaller amount of them. Still enough to make the averages accurate. Especially if you do your own average between the Nationwide and Halifax.

EdInvestor

Paul_N wrote: »

There is nothing to right. Banks are not now able to raise ludicrous amounts of money like they have done in recent years. 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.

At the moment that's correct.There's a lot of cleaning up going on, especially in terms of reducing the risk.But there will come a time when that process has finished . The other cleanup going on behind the scenes affects the securitisation system, which had got out of control.That too is being sorted and will revive later in the year - HBoS has already had a trial run.

Only when house prices come down will they lend more freely, because the money they do have will go further.!!/quote]

Er, what?

They also risk pumping money into a falling asset if they lend big mortgages now.

It is not the expensive end of the market that has been affected - it is the riskier bottom end.

The way I see it, banks/building societies don't have as much money to lend as they used to.

Yes but this is temporary.

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.

IMHO the banks are well aware that they can control the apparent value of housing assets quite easily by turning the mortgage tap on and off and issuing regular index reports on the effects.

Looks pretty simple from a business perspective.

The business perspective is risk/reward.If they don't lend, they don't make profit.If they don;t make profit their shareholders get mad and they lose their jobs. With any loan there is the risk of default.So the more solvent you are the easier it is to borrow.There are plenty of solvent houseowners in the UK - after all 40% of them own outright with no mortgage.That's why the remortgage market is continuing normally.

Normality in the first time buyer market may have become a little distorted mainly because of the loose controls on the new broker system - which is one reason it is currently effectively suspended.

A 10% deposit and more direct lending looks like becoming the norm again - but remember - up until a couple of years ago even more was required.

Just watch the mortgage approval figures.When they start to rise again, the feed through to house prices will not take long.

lostinrates

phil_b wrote: »

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..

I don't disagree with you BUT reasons why people in my acquaintance have HAD to move/sell have included:

Relocation (unfunded) for work or new job (and necessity to live there)
To go into care
Selling inheritance property (requisite to pay inheritance tax)
Unemployment/redundancy
change in family size. (tbh the whole kids must have their own room thing annoys me, plenty of well ajusted children share with a sibling, but in a long term 'recession' some one could go from being single in a bed or studio to being a coule, to havin one or multiple children)
Divorce settlement (this really is a biggy)


I'm sure there are more..............

brit1234

pickles110564 wrote: »

Sorry to disappoint you Brit but green shoots appearing in our area, FTB's have started making a move.
They cant believe in all the hype / trash you keep uttering from your keyboard.:rotfl:

Really, they have suddenly saved up a 25% deposit in the last couple of months and have defied all the banks stricter lending conditions and tapped into a limitless source of credit.

Green shoots, don't treat us as idiots. :snow_laug

Prices will be about 3% down next month.

Kez100

pickles110564 wrote: »

Sorry to disappoint you Brit but green shoots appearing in our area, FTB's have started making a move.
They cant believe in all the hype / trash you keep uttering from your keyboard.:rotfl:

Ahhhh....that's why the borrowing rates went up today. Got to save these FTB's from themselves somehow.

Paul_N_4

EdInvestor wrote: »

At the moment that's correct.There's a lot of cleaning up going on, especially in terms of reducing the risk.But there will come a time when that process has finished . The other cleanup going on behind the scenes affects the securitisation system, which had got out of control.That too is being sorted and will revive later in the year

Is this one of your official predictions. Be careful, you were saying things were looking up back at the beginning of the new year:
http://forums.moneysavingexpert.com/showpost.html?p=7798285&postcount=46

5 months later...

The business perspective is risk/reward.If they don't lend, they don't make profit.If they don;t make profit their shareholders get mad and they lose their jobs.

As I said, of course lenders are still lending, but with caution, and are covering themselves by requiring big deposits. They've also raised rates in the face of dropping base rates. And not all lenders are public companies, so no shareholders to please.

That's why the remortgage market is continuing normally.

Not quite normally. Some lenders are insisting on a minimum equity percentage for remortgaging.

Normality in the first time buyer market may have become a little distorted

That's an understatement.

A 10% deposit and more direct lending looks like becoming the norm again - but remember - up until a couple of years ago even more was required.

Well we're agreed on that then. If this is the norm, it will have a prolonged impact on the number of FTBers in the market, reducing demand dramatically.