UK housing market is 'overvalued'
30 July 2007, 12:12 PM
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UK housing market is 'overvalued'
What many of us have thought for some time seems to be confirmed by this report:
BBC NEWS | Business | UK housing market is 'overvalued'
So it seems the potential is there for house prices to 'realign' by losing at least 20% of their value at some point. Possibly after the next couple of interest rate rises.....
UK house prices are at least 20% overvalued
High levels of debt make the UK economy one of the most vulnerable in the world to higher interest rates, it added.
High levels of debt make the UK economy one of the most vulnerable in the world to higher interest rates, it added.
So it seems the potential is there for house prices to 'realign' by losing at least 20% of their value at some point. Possibly after the next couple of interest rate rises.....
30 July 2007, 12:25 PM
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Counter that with a report I was reading last week, that says demand is still far outstripping supply. If that's the case, I can't see a 20% correction happening anytime soon. Unless of course, those next few rate rises release a tidal wave of properities onto the market.
30 July 2007, 12:29 PM
#5
Counter that with a report I was reading last week, that says demand is still far outstripping supply. If that's the case, I can't see a 20% correction happening anytime soon. Unless of course, those next few rate rises release a tidal wave of properities onto the market.
Kick all the layabouts out of council houses ,sponging of the state for rent,money and council tax. That should free up 1.5million homes
30 July 2007, 12:29 PM
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20% is a lot less than they have gone up in the last 5-10 years though isn't it?
As flightman says, for every report that says on thing, there is another that says the opposite. Just depends which one will benefit each individual more as to what one they want to believe.
Scoobynet monthly checkbox - HOUSING CRASH PREDICTED THREAD - TICK
As flightman says, for every report that says on thing, there is another that says the opposite. Just depends which one will benefit each individual more as to what one they want to believe.
Scoobynet monthly checkbox - HOUSING CRASH PREDICTED THREAD - TICK
30 July 2007, 12:38 PM
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And if 20% scares/makes you smile, then this report is just over 6 weeks old:
House prices 'are 65% too high'
The housing market in Britain is up to 65% overvalued and needs further interest rate rises to cool it, international economists warned yesterday. The Organisation for Economic Co- operation and Development revealed that UK property prices are among the most stretched of any major world economy.
At the same time, finance experts warned that the Bank of England could increase interest rates to 6% before the end of the year.
The prospect will alarm homebuyers who are already struggling to meet their monthly mortgage payments after four hikes since last August. Annual payments on an average £150,000 mortgage are already £1,200 higher than this time last year.
The Paris-based OECD said it was worried about the valuations of homes in a range of countries following a world-wide boom. It said a slowdown is long overdue and that a property crash cannot be ruled out.
House prices 'are 65% too high'
The housing market in Britain is up to 65% overvalued and needs further interest rate rises to cool it, international economists warned yesterday. The Organisation for Economic Co- operation and Development revealed that UK property prices are among the most stretched of any major world economy.
At the same time, finance experts warned that the Bank of England could increase interest rates to 6% before the end of the year.
The prospect will alarm homebuyers who are already struggling to meet their monthly mortgage payments after four hikes since last August. Annual payments on an average £150,000 mortgage are already £1,200 higher than this time last year.
The Paris-based OECD said it was worried about the valuations of homes in a range of countries following a world-wide boom. It said a slowdown is long overdue and that a property crash cannot be ruled out.
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30 July 2007, 12:45 PM
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Note the use of the phrase "up to", which, of course, means "less than" - just like it does when companies issue misleading adverts for "up to" some large discount on kitchens, carpets, furniture and the like.
30 July 2007, 01:50 PM
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yup 1% is UP TO 50% 
People buy when prices are going up, they don't when they are going down.
Once everyone knows prices are going down, no-one will buy as they'll be waiting for the market to bottom out, this in turn will cause more rapid price falls. As to WHEN this will happen, who knows, don't think it's far off though.
Basically, people jump on the sailing ship, however they jump off the sinking ship far faster than they walked on.
NO-ONE knows what will happen, anyone that says they do are full-of-crap. However, we can say what we believe is more or less likely. I'd say a fall/correction will(is) happen(ing) is more likely than the prices continuing upwards at any sort of significant. Only time will tell if I'm right or not.
1% is UP TO 50% People buy when prices are going up, they don't when they are going down.
Once everyone knows prices are going down, no-one will buy as they'll be waiting for the market to bottom out, this in turn will cause more rapid price falls. As to WHEN this will happen, who knows, don't think it's far off though.
Basically, people jump on the sailing ship, however they jump off the sinking ship far faster than they walked on.
NO-ONE knows what will happen, anyone that says they do are full-of-crap. However, we can say what we believe is more or less likely. I'd say a fall/correction will(is) happen(ing) is more likely than the prices continuing upwards at any sort of significant. Only time will tell if I'm right or not.
30 July 2007, 02:33 PM
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With the government letting in 2.5million new workers (not to mention the huge numbers of spongers) since 2002, they all have to live somewhere. With limited land available and planning regs as they are is it any wonder prices keep going up and look silly on any rational sense of value (ie average wage)?
Can't see a 20% fall any time soon.
Can't see a 20% fall any time soon.
30 July 2007, 02:42 PM
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What many of us have thought for some time seems to be confirmed by this report:
BBC NEWS | Business | UK housing market is 'overvalued'
So it seems the potential is there for house prices to 'realign' by losing at least 20% of their value at some point. Possibly after the next couple of interest rate rises.....
BBC NEWS | Business | UK housing market is 'overvalued'
So it seems the potential is there for house prices to 'realign' by losing at least 20% of their value at some point. Possibly after the next couple of interest rate rises.....
Do a search on Scoobynet and you'll realise that house prices will never fall ......... fact.
30 July 2007, 05:35 PM
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With the government letting in 2.5million new workers (not to mention the huge numbers of spongers) since 2002, they all have to live somewhere. With limited land available and planning regs as they are is it any wonder prices keep going up and look silly on any rational sense of value (ie average wage)?
Can't see a 20% fall any time soon.
Can't see a 20% fall any time soon.
Also prices will fall even if demand increases if banks are unwilling to lend such high amounts due to ever-increasing bad debt.
I think house prices are not really something to be worried about if we are talking about the potential credit crunch which could be in progress.
30 July 2007, 08:17 PM
#13
If banks actually practiced responsible lending like they claim to, the housing market wouldn't be in the over-inflated state its in now. Simple economics, if people have more money to spend, they're going to spend more money, and the lower the interest rate, the more banks need to lend to make the same profit..
Interest rates should have been raised higher months ago in order to head off the inflation - I don't think 5.75% is going to stop inflation now.. I think they're going to increase by at least another 1.25% before people feel the pressure and take the hint to stop spending.
(Yes, I DO know better than the Bank of England!
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30 July 2007, 09:00 PM
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I've got enough equity in my house to cover it, I can afford to double the mortgage if I need to plus I'm planning on staying here for another 25 years. Don't care which way the prices go, although I'd prefer up
30 July 2007, 09:11 PM
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30 July 2007, 10:19 PM
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Because if you read my post, I don't plan to move to any house for a considerable amount of time and when I do move, it will be to a smaller property (unless I win the lottery) and the area I live in is very nice as it is, thanks. As long as it's worth more than I paid for it/spent on the mortgage, I'll be happy.
30 July 2007, 11:50 PM
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I read a report t'other day that said levels of housebuilding will shortly drop away due to lack of land available. Mmmm ... remember school economics, demand vs supply?
TX.
TX.
30 July 2007, 11:54 PM
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Can't fault your reasoning
31 July 2007, 12:00 AM
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Besides, UK property companies have enough land ready for hundreds of thousands of new houses. And the public sector has even more.
31 July 2007, 12:33 AM
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What happens when the interest rates hit the youngsters credit cards that are renting most of these second/third properties?
Bet the 1st thing they think is "**** living on here, I'm off back home to continue living the high life". How does that leave the buy to let people with their higher interest rate mortgages?
Will they be go against the "I'm not gonna rent to immigrants/DSS" stance?
Bet the 1st thing they think is "**** living on here, I'm off back home to continue living the high life". How does that leave the buy to let people with their higher interest rate mortgages?
Will they be go against the "I'm not gonna rent to immigrants/DSS" stance?
31 July 2007, 01:00 AM
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at present im pretty damn knackered im living in a seaside town outside inverness wich property value is rising the fastest out of most seaside towns in the UK i have just been offered a mortgage and i just cant afford to get anywhere , houses are going up for offers over 95 and ending up at 130 odd its just ridiculous im thinking about moving away but then theres wextra pressure of new job etc etc !!
31 July 2007, 07:10 AM
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31 July 2007, 08:04 AM
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31 July 2007, 12:33 PM
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31 July 2007, 04:46 PM
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I just bought a house for £109,000 it was up for £130,000. Three bedroom semi, gardens on three sides, drive for three cars and very close to local park.
My point is that although the prices are high, no one is buying and will low offers going through the chain will result in lower house prices!!
I think
My point is that although the prices are high, no one is buying and will low offers going through the chain will result in lower house prices!!
I think
31 July 2007, 05:27 PM
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I just bought a house for £109,000 it was up for £130,000. Three bedroom semi, gardens on three sides, drive for three cars and very close to local park.
My point is that although the prices are high, no one is buying and will low offers going through the chain will result in lower house prices!!
I think
My point is that although the prices are high, no one is buying and will low offers going through the chain will result in lower house prices!!
I think
ohhhhhhhhh my god where are you from mate immoving down your way !!!
you can just about scrape a 1 bed flat up my way for 100k !!!
31 July 2007, 05:34 PM
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Houses and flats selling v v fast in my area still for v v close to asking price.
Just sold my flat in less than a week advertising through facebook for what i wanted (i pitched it 5k above what i wanted). Mate just sold his house to the first viewer for asking price (well i say 'just', i mean he's just completed today in fact, 'sold' it about a month ago). Another mate just sold his flat for ~50k more than he paid 8 months ago.
Sure there will be a crash soon though
Just sold my flat in less than a week advertising through facebook for what i wanted (i pitched it 5k above what i wanted). Mate just sold his house to the first viewer for asking price (well i say 'just', i mean he's just completed today in fact, 'sold' it about a month ago). Another mate just sold his flat for ~50k more than he paid 8 months ago.
Sure there will be a crash soon though