Just exchanged contract for our first new house! Get in.

Sod being a pesimist all your life!

 

Good for you, hope you spend many happy years there.

 

If it's your home to live in for at least 10 years I doubt you will be worried about the massive drops between now and then.

 

indeed

 

What happens there, happens here a few months later.

Their housing market rallied .... now it is collapsing.

Our market rallied later part of 2009 and into mid 2010 .... now it will drop back severely I believe.

 

I'm watching the market closely. Thinking of buying Xmas/New Year but may delay a year.

 

Sales in Persimmon Homes and Charles Church are still selling well and prospect sales are looking even better.

 

house prices will never come under the price pressure they do in the states -- simple supply and demand economics.

they have collapsed in the US and what is very worrying for the US middle class is that they see no mechanism by which it will increase to levels seen in the last 5 years

even if they drop by X% -- it will only be in the short term, and only for really sh1te properties/new builds etc

apart from that agree 100%

 

Good on you fella .
Despite what the doommongers on here say ,you are doing the right thing .
A good investment for you ,that you can enjoy for years to come .Then in 10 years or so I expect you will find that it will be worth considerably more than you paid for it .(I take it you bought it at the right price !!)

Reading more and more reports that the country is getting back on track .
Enjoy Fella .!!!

 

This will be our first house together. Mrs and I have lived in flats for the last 7 years, so its about time!
We managed to part ex our flat against our new house. We got £120k for the flat. 3 weeks ago, Ward-homes had it advertised at £125k, then £120k and now £115k! So I think we got a good deal. Plus there is a 5 year warrenty on everything in the new house, even appliances. Moving next weekend!

I didn't think our flat was worth £110k to be honest. So to get £120k for it, plus another 10k off the asking price for the house, I think we did quite well. Plus, it is only 2.5miles from my work!

 

Disagree. The supply and demand argument might be the only one the Estate Agents have left now, but there could be 100 potential buyers for every home, but if none of them was able to borrow the required amount to buy it, none of them would get the home. For the home to sell, the price would have to fall to a level where a buyer could actually buy.

Money has never ever been so 'cheap'. It's been very easy to borrow vast sums, at all time low rates of interest. This is already changing - it's getting much harder to borrow money (banks having to maintain more capital to sure up accounts), interest rates are at an all time low and will only go up, the economy is very uncertain so banks are being more careful who they lend to.

House prices may have fallen something like 21% between 2007-9, and are now 10-12% or so lower than 2007 peaks, but there is LONG way to fall. Current price levels are simply not sustainable.

Or more likely a poor investment which may well be worth less in 10 years than it is now. The days of housing being a one-way bet are well and truely over, but it seems a lot of people who have no understanding of economics fail to see this.

Saying that chrispurvis100, good luck with the purchase. Enjoy it, and don't think of it as an investment! (which houses should not be)

 

but again the market will come to the rescue -- the demand for money will create the supply

 

It obviously doesn't work like that!! Money is not a commodity!

The banks don't think "oh loads of people want £500k mortgages as house prices are so high - let's lend everyone £500k!" They look at what people can AFFORD to pay back based on their financial circumstances. Up until recently lenders have been slack and lent out way too much - this has ALLOWED house prices to be maintained at such high levels. The problem is people were borrowing far more than they could pay back and the banks lost out massively as a result, and this ended up with the entire financial system almost collapsing (are you aware of the 'Financial Crisis' and worst recession since the 1930's?..). The banks wont make the same mistake again in a hurry, and governments wont let them.

Result? Someone who might have been able to take out a £200k mortgage in 2007 might now only be able to borrow £100k. Factors? Banks have less money to lend, borrowing costs for the banks are higher, economic climate is much worse means more chance of borrower defaulting (due to job loss etc).

If you look at current house sales volumes they are, and have been for some time, extremely low. This is because there are hardly any first time buyers (they can't get into the market, because they can't borrow the money to buy). As a result most sales are existing home owners moving house.

At the end of the day to get the FTB's back house prices need to fall significantly. It's almost like check-mate at the moment - sellers refuse to lower prices, but buyers can't afford to pay the current prices. Reality is slowly sinking in, and either prices are going to fall moderately for some years, or they'll tumble - maybe due to forced sales from people losing jobs (public sector cuts starting 2011 for example).

Prices can only come down. Significantly. If you can put forward a valid argument to suggest otherwise, I'd be interested to hear it!

 

yes it is

 

Could you explain how that works please?

 

The banks wont make the same mistake again in a hurry, and governments wont let them.


Oh really ,why is it that the Banks are already dishing out Millions in bonuses again so soon after being bailed out .??????
This was never to be allowed again, but short memories have some .!!!!!
I agree the only thing stopping the next wave of house price rises is a lack of funds for 1st time buyers .But again this will be eased and get things moving again ,due to need . A need for people to be able to live somewhere .And as trends are now moving towards more single people ,(as opposed to married couples etc) the need for more property increases .
So in this ever increasingly populated little island ,property Will become more valuable .Hence my view that property will start to increase in price again sooner rather than later .

 

I'm expecting further falls, but have just had an offer accepted on a lovely house. Got it for a steal and even another 20% drop will be insulated against with the plans we have for it - hopefully.

Bought to live in for 20yrs+, so not too worried.

Got a 5yr fixed rate deal at a low % rate due to our large deposit.

Yep, I gave in and bought despite my feelings re the country's state! It's been bought as a home and not to make money from - those days are over for a long time.

And yes, I got it at 2004 price, if not 2002.

 

So you low balled it. I heard of a few peeps doing that but others said don't bother trying.

 

It would be "Rude" not to low ball it !!!!!
People need to sell for many reasons and if the reason is strong enough you can make a real saving ,(as the buyer)which is what everyone should do .
A lot of the repossesions that happen are to people who did not go in at the right price ,eg amateur BTL ,ers who bought off plan and got carried away during the process ,paying far more than the property they were buying was worth ,allowing no flexibility .

When I bought my home ,it had been reduced twice ,but I still went in and told them it was only worth "X" to me and bargained from my low point to the max I would pay .

There are plenty of bargains out there ,you just have to find them .

 

absolutley bang on njkmrs -- and as I have been saying too (and posting) during and immediatly after the banking crisis.

The fact that bonus levels (Banking and Corp) are nearly back to pre crash levels comes as no surprise to me -- indeed I am surprised people are surprised

 

Indeed the good times are back. Why the news keeps talking about double dip recessions, worries about inflation, deflation, stagflation, spending cuts, lack of 1st time buyers, falling retail figures, lack of consumer demand, a rising tax burden and falling prices, I don't know.

Any fool can see it's only a rose petal covered path to paradise now.

 

No hodgy, money is not a commodity! An example of a commodity is oil. If demand increases you can drill an extra well and pump more. Here's something further reading for you;

http://en.wikipedia.org/wiki/Commodity

The lack of funds issue will be 'eased' due to the need?!... As I said to hodgy it obviously doesnt work like that! The exact opposite is happening due to the mess that excessive lending has created. The result of this restricted lending, combined with higher borrowing costs and a stormy economic outlook is that people can borrow a lot LESS!

Knock-on effect for house prices is that they will have to fall to a level where people can obtain the funds to buy. When this happens the market will get moving again (ie transaction levels will increase).

You and hodgy are looking at a very simplic view of things, and just not factoring in all the variables.

 

Petem95 has the market spot-on.

Whatever the buyer can pay (the amount of money lent to them + their deposit) will dictate House Prices. This is a simple truth.

Mr and Mrs X fall in love with a property (it is an emotive process) - they can afford £y (as the Bank will lend them 5 times their joint income) so they pay £y to secure the home of their dreams - and that property is worth £y.

However, if Mr and Mrs X can (under the new tighter regime) only afford £z - then, despite what the seller may think, that property is only worth £z. Now, only 3 things can happen .....

1. The seller refuses to drop the price (the current market conditions) and doesn't sell.

2. Another buyer steps in and is willing and able to pay £y and this powers House price inflation.

or...

3. The property price is dropped to £z and the seller sells, this drives prices lower.

----------------------------------------------

We are at 1. at the moment - sellers refusing to drop prices but buyers unable to buy.

Number 2. happens for the desirable properties which will always defy the market due to location or build.

Number 3. is where we are heading - in my opinion - as that's the only way to end the stagnation which is evident in the housing market.

 

This other buyer, is it Mr and Mrs P?

What happens if they ( Mr & Mrs P ) offer Z+, does that mean Mr & Mrs X who can only afford Z have to up their offer to Z+? Maybe by borrowing + from the Bank Of Mum and Dad? And who are they, Mr & Mrs Q?

 

you are using a very narrow definition of a "commodity"

I am using a much broader definition -- which is anything that is bought, sold or traded.

 

I know its difficult hodgy but we will get through to them somehow .!!!!!

 

I have my eye on a property which was placed on the market at an asking price of £349,950 in July 2008.


nike air ninja
foot loocker ninja

 

Life caught up with me. My rental sold and it meant either finding a quality new one or buying again.

I'm lucky in as I have a good deposit that the banks want and our joint earnings are decent, so a mortgage isn't an issue.

I still expect our new place to be worth less over the next 3 yrs though. It's bought to live in for us, so don't really care.

My low ball offer came in as the selller is 89 and moving in with her daughter.

Death, debt and divorce - they all force prices down.

 

I was convinced we were going to see major falls in property prices and it didn't really happen, ie the 30-40% real term falls. The prices were propped up by low interest rates, relatively low unemployment rates etc

Then it seemed we were set up for a double dip, and we are. Unemployment will rise as will taxes, benefits will be cut, but interest rates may well stay low.

Though I've been a property bear for about 6 years now, I'm not convinced we are going to see the degree of falls that some on here are saying. I wish we were as it would suit me down to the ground, but I'm not sure we will. Small falls yes, especially in real terms

It's also dawned on me that the property market on this small island is actually far more fragmented than I first thought. The falls will therefore be concentrated in certain areas, with many more or less escaping the worst of it. In sort after areas, people are still competing for property and always will.

In my local area, the really desirable stuff ie large family homes near all amenities/schools etc are still going for very good money. As much as at the peak.

The most recent set of auction details I've been sent do seem to have a higher than usual level of repossession properties in them, but I'm sure there will be plenty of investors ready to snap these up, they won't sell for peanuts.

It will be an interesting 18 months ahead, my suspicion is that if interest rates stay fairly low we aren't going to see huge falls. It's not what I wanted as to some extent my own personal investment strategy was dependent on this happening.