Debate House Prices
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BBC: How far will house prices fall?

WTF?_2
Posts: 4,592 Forumite
http://news.bbc.co.uk/1/hi/business/7445864.stm
According to two of the UK's biggest lenders, prices have fallen off a cliff in the past few months.
The Halifax says prices dropped by 6.6% between December and May, with 6.3% coming in just the last three months.
The Nationwide reckons they have fallen by less, down by 4.7% in the first five months of the year, and by 3.2% in the past three months.
..
If we extrapolate from the Halifax's 6.8% drop so far this year, then 2008 will end with house prices down by 15.8%.
If we think the rest of the year will be just like the past three months, then prices will be even lower - down by 21.3% by the end of December.
The Halifax's most recent prediction was that house prices would fall by mid-single digits both this year and next.
Not surprisingly it is currently revising its thoughts.
The bank's chief economist, Martin Ellis, admitted that as prices had already fallen by nearly 7% there was a good chance they would fall further by the end of the year.
Hats off to the media, they spent years looking the other way regarding the dangers of the crazy boom in houses which was destined to end in disaster - but when they get on a bandwagon, they really get on the bandwagon. Too bad all this sudden media interest comes to late to help people who might have been able to avoid the mistake of buying an overpriced property.
According to two of the UK's biggest lenders, prices have fallen off a cliff in the past few months.
The Halifax says prices dropped by 6.6% between December and May, with 6.3% coming in just the last three months.
The Nationwide reckons they have fallen by less, down by 4.7% in the first five months of the year, and by 3.2% in the past three months.
..
If we extrapolate from the Halifax's 6.8% drop so far this year, then 2008 will end with house prices down by 15.8%.
If we think the rest of the year will be just like the past three months, then prices will be even lower - down by 21.3% by the end of December.
The Halifax's most recent prediction was that house prices would fall by mid-single digits both this year and next.
Not surprisingly it is currently revising its thoughts.
The bank's chief economist, Martin Ellis, admitted that as prices had already fallen by nearly 7% there was a good chance they would fall further by the end of the year.
Hats off to the media, they spent years looking the other way regarding the dangers of the crazy boom in houses which was destined to end in disaster - but when they get on a bandwagon, they really get on the bandwagon. Too bad all this sudden media interest comes to late to help people who might have been able to avoid the mistake of buying an overpriced property.
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Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
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Comments
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There are some interesting bits in the whole article.
"If lenders continue to back away then the pace of decline could be sustained for some time," said Ed Stansfield at Capital Economics.
"There is every chance of a larger than 8% fall this year and more than 20% fall in total," he said.
However, he points out that the aggressive price falls revealed by the Halifax and Nationwide have not been replicated in other surveys.
Department of Communities and Local Government (DCLG) says prices are still 5% higher than a year ago, while the Land Registry for England and Wales also reckons they are higher, though by a lower 2.7%.
So although the market has clearly been slowing down, perhaps the process has not been quite as dramatic as some lenders and commentators have suggested.
Freedom is not worth having if it does not include the freedom to make mistakes.0 -
I don't think the full extent of the falls can be accurately predicted.
People in general don't just chop big precentages off their sales prices, it takes months of EA discussions to take small percentages off, and these mount up over time.
The coming year(s) will be interesting to observe.......John :beer:
Life's too short.........0 -
I don't think the full extent of the falls can be accurately predicted.
People in general don't just chop big precentages off their sales prices, it takes months of EA discussions to take small percentages off, and these mount up over time.
The coming year(s) will be interesting to observe.......
Once you are out of contract, the EA has no requirement to market or attempt to sell a property.
In a rising market it is sensible for EAs to try and get anything and everytnig on their books. In a falling market, why waste time with people who are not willing to sell?0 -
Once you are out of contract, the EA has no requirement to market or attempt to sell a property.
In a rising market it is sensible for EAs to try and get anything and everytnig on their books. In a falling market, why waste time with people who are not willing to sell?
I take your point, but surely someone will end up selling the property for an individual. Would an EA really cut their nose of to spite their face in this manner quite so easily?
In a falling market, when EA's will feel the pinch, surely anyone's business is good business. Would they not just draw on all their persuasive powers rather than tell a prospective seller to bogof?John :beer:
Life's too short.........0 -
It's the few bigger falls that will make the smaller falls revisit their price.
If yours is for sale at £100k and your neighbour flogs his off for £80k then that information is in the public domain, so it makes yours look over-priced to the savvy viewer that's got their eye on prices.
That means if you leave yours on at £100k you'll get offers at £80k AND your buyer will be looking elsewhere for his bargain. And he'll find it!
Your house is only precious to you. To others it's just one of their options and price is important in the buying decision.0 -
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pickles110564 wrote: »People will always sell at the correct price.:rolleyes:
And that's the problem at the moment. Sellers want £x, buyers can only afford or a only willing to shell out £x-y. Either buyers will have to pay more or sellers will have to cut their prices for the market to start moving.
The former happened in 2005. I reckon the latter will happen in 2008 but I have no way of knowing and nor does anyone else.0 -
I sold one of my properties only last week & achieved £5k less than the asking price, but that was to a FTB couple at the lower end of the market (based on £125k initial asking price). However, the market is fickle & I was lucky.
Many sellers will no doubt have to drop prices (sometimes significantly) in order to get a sale.0
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