Hanslow

On the up apparantly (if you read the first part, if you read the second part it's still declining )

http://news.bbc.co.uk/1/hi/business/4314754.stm

Feel free to discuss the validity of these claims and the current state of the market. It'd help to make my day go quicker

davegtt

Sell sell sell, if you believe PSL theyre gonna crash tomorrow

InvisibleMan

all depends if the pubs open....

pslewis

If they are rising at 1% .... 1/2% .... 2% .... its too close to 0%!!

And, as those with a brain know, when you get that switch-over happen they will tumble! No-one will buy when a -1/2% is posted .... then it will be -3% .... then -6% .... then -15% .... then -30% .........

Pete

ajm

anyone filled up with petrol today? Get in there quick while there's still some left!

TopBanana

Yet more bull from Halifax trying to talk the market up.

What they don't tell you is that volume (i.e. demand) is drastically lower - this suggests to me only the most desirable houses are selling, skewing this figure upwards. Before long, every other seller will have to lower their prices in order to compete. Then the nicer houses start to look too expensive, and so on.

Also, Halifax are reporting agreed mortagages instead of completed transactions.

Henrik

iTrader: (5)

Why is the beeb reporting this as positive news anyway?
It would be positive if prices fell for almost everyone in the UK (excluding those who bought near the top).

Luckily, NationWide and RICS are reporting falls

Petem95

Its exactly as Pete says, house price inflation has been positive for a long time, now its hovering AROUND 0%.

Also as TopBanana says, the report is from HALIFAX!! The Uk's biggest mortgage lender, who have a vested interest in creating a positive impression of the housing market because they will profit from it.

The Land Registry is the only real index to believe, and that looks like showing -5% this year (and thats overall UK remember, South West is already down 8% this year).

robski

LOL talk about over simplification.

There has been a massive reduction in the number of people moving house, but thats supply and demand, plus the hype that happened. Also media reporting of potential house price falls will make first time buyers think twice.

I agree with Petem95 that actual prices paid are a better indicator, but there is also a lag with the LR figures, typically they lag c3-4 months behind the "highstreet" prices being agreed at the doors.

I think what we are seeing is the market stagnation that most of us who have watch the property market for years expected. All the hype, the low supply (relative to demand) onto the market etc combined with low interest rates has pushed houses to their limit of affordability. You NEED the FTB to stimulate the market and signs are that they are either holding back waiting to see if the house prices crash, or are pushing for a better deal. People wanting to move are accepting the offers or aren't moving, offers ripple along chains and hence lower the prices people actually pay.

Supply is high(ish) and demand is low so prices are competative, the buyers are now dominant in that they can make reasonable offers now, only people desperate to move will accept low offers, others will just refuse and sit tight.

Not many people HAVE to move, you see this in defalted housing markets, a lot are "happy" to sit tight, maybe do that extension with a top up mortgage rather than moving.

The actual price of a house isn't significant for most people, its the repayment amount that is. With high employment you get low repossessions until something affects these peoples ability to pay - income / interest rates. Either of these things will potentially cripple someones abilty to pay, and can be the thing that forces them to sell. You ain't going to see free falling prices without one of them factors coming into play. Sure you will probably see buyers getting good deals which will create the headline "house prices are falling", but the reality for a lot of people will be that they are rooted to the house they occupy, they cant afford to move up without a good price on their house, but the offers they get will be from people in a position of power so they will be lower = market stagnation.

Last time I remember this type or market I saw a lot more FTB houses being built as the builders can sell them, the FTB can get the house without slow moving chains so they go for these new builds. I expect to see more FTB orientated property being built now rather than the normal 4/5bed detached house estates which make great profits for the developers compared to FTB houses.

The real thing to watch is the general state of the economy, signs of a downturn will affect employment which will affect peoples ability to pay, forget headline grabbing "house rise/drops" they dont make you better or worse off unless you are planning on selling imminently.

unclebuck

That rules you out then.

Henrik

iTrader: (5)

The thing is though, that there is reports of job losses coming in thick and fast at the moment.

Also, debt is at an all time high, and inflation is higher than 2%.

Now, when inflation gets higher, the BOE generally rise interest rates to counter the inflation, and if you have a mortgage that is perfectly servicable at 4.5%, you might be struggling if interest rates hit 6% (This would affect late buyers or people who have withdrawn equity).

Note, I don`t mean "you" above as in "you personally", but in the more general sense.


England should have had a recession ages ago, but borrowing let the mania continue and rise to new heights. Now, when the recession hits, it will be a lot worse than it would have been a couple of years ago, e.g. because of the increased debt.

The government should have tried to counter the process of rising house prices, but they let it continue unabated and they also massively increased public spending.

The economic outlook is not very rosy at the moment, unfortunately.

davegtt

1.5% doesnt make much difference to someone morgage unless they have something silly like 250k+ I have a 90k morgage and 1.5% doesnt make crippling rises (unless off course someone has an interest only morgage but not many people have these.....)

Its all speculation, always has been always will be. people have been banging on about crashes etc for far too long now to be able to say told you so when it does eventually happen.... I do believe we will see something in the terms of a recession but not just yet....

Henrik

iTrader: (5)

Well, we both know that we could argue about this until we're both blue in the face and it wouldn't change each other's standpoints on this issue.

However, I'd just like to point out a flaw in your argument above: Just because you only have a 90k mortgage, doesn't mean there are not lots of people who have a much bigger mortgage, either due to buying an expensive house in the first place (e.g. late FTB's) or by rolling other debt (e.g. car purchases, credit cards etc etc) into the houes loan (overspenders).

I know several young people who have mortgages in the order of 170k, and many are coming off two year low fixed rates onto variable rates. A rise from (say, for a fixed mortgage taken out two/three years ago) 4% to a variable 6% will hurt for many people. A lot.

Henrik

iTrader: (5)

http://www.uknetguide.co.uk/Finance/...mortgages.html

You might argue that 18% (in 2003 when prices were more affordable anyway!) is not a lot, but i think it's a lot more than enough to dent the housing market if those people have to start selling off their houses.

davegtt

its not a flaw in my arguement though is it because I said, and I quote

so nerrr lol

seriously I know what yours saying but I dont believe the amount of people with £200k morgages have ALL overspent, Id say on a percentage level those people make a small percentage of the overall market.

Again IMO off course

davegtt

blimy, if those figures are credible then Im actually very suprised... fair play to digging that out.

BUT, thats 18% of people in that particular year.... overall as a percentage Id be interested to know how many people have interest only morgages over those with repayment for say the last 20years.... that might give you a better idea on how it might effect the market

pslewis

[QUOTE=davegtt]1.5% doesnt make much difference to someone morgage [QUOTE]

Let me guess?

You failed GCSE Maths, didn't you??

Fact .... Mortgage Rates are about 4.5% APR ... if you are paying more then you are paying too much.

An interest rate hike of 1.5% would mean a REAL increase in repayments of interest of 33%!!! Yes, 33%!!!!

In the 'Good-Ole-Days' when the Mortgage rate was, what? 10% ... the REAL increase on the back of a 1.5% rise would be 15%!

Therefore, each rise in mortgage rates today will hit MUCH harder than they ever did.

Add to that the fact that there is much more debt about and you have a recipe for disaster if intetest rates move upwards.

I am ok, no debt - large income - low outgoings .......... but some are going to get really hurt

Pete

davegtt

Pete, if your as clever as you try to make out why dont you rread what I wrote and realise I was talking about Repayment morgages

90k morgage over 25 years paying 4.5% is £506 a month..... the interest rises to 6% and the payments rise to £587....

A whole £81 not exactly a big increase is it? especially when you think people earn £50k and cant live on less

go crawl back under your rock....

davegtt

and no I passed my GCSE maths thanks, also passed my A level maths in 1/4 the amounts of lessons someone studying for A levels would usually have. Not that A levels mean much these days

pslewis

OK, £90k over 25 years years at 4.5% = £337 interest and £505 repayment

at 6% = £450 interest (up 33%!) and £586 repayment

As a large proportion of loans these days are Interest Only .... there is a real risk!

The average Mortgage rate over 30 years has been 10% ....

When your payments have gone up to £827 (10% Mortgage rate) from £505 ..... I think even a smartarse like you will start blubbing and crying!! And I'll buy your house for £5:99

Pete

davegtt

A large portion are not interest only if you believe the figures Henrik has just kidly posted for all to see....

and you will buy my house for £5.99? I always knew you was a dreamer lewis

Henrik

iTrader: (5)

Yeah, unfortunately I couldn't find data for 2004 (2005 unlikely to be out yet ), but i think it serves as a good indication as of what the situation is likely to be in 2004 and 2005 also.

I don't know percentage-wise over the whole period (e.g. from now and to 25 years back), but if lots of people who have bought in the last 3 years are starting to fall behind with mortgages, then I think this will negatively impact the housing market (not least sentiment if people start hearing about reposessions), as I think there have been "enough" FTB's over the last 3 years.

davegtt

I do understand where your coming from, I just dont believe the majority of FTBs have all over stretched themselves with silly amounts.... not saying many havent but overall Id say the market is stable enough in that sense. defiantely large rises will make people feel the pinch, more so those on the higher scale but Id say the rises would have to be more than 1.5% which doesnt look too likely atm