MrBig1

Average House Prices Losing £4000 a month - that's £5:50 every single HOUR!

Brace Yourselves!

Gear Head

iTrader: (2)

And you don't think that people like you are adding to the problem? Pete is it?

jacrobat

Well the concensus seems to be about a 25% fall and today we hit 12.5% from the peak so we are halfway

MrBig1

Market Forces my dear chap, market forces .... the same force which drove the prices UP - who was complaining about them then? Only the poor first time buyers who were priced out. It's their turn now.

dpb

Sooner the better

MrBig1

Today widely revised to 33% drop peak to peak ... average price to be around £120,000 in 12 months.

bighead

iTrader: (1)

DONT WORRY GUYS....it will go up again eventually as always , because of less less land to build and more and more people needing houses to live in , I've seen it all before

Gear Head

iTrader: (2)

Is that figure from the same people that predicted that oil would hit $300 a barrel by the end of the year?

PeteBrant

Forget the house prices, its the house sales that is the alarming figure - Mortgage approvals have dropped by 95%. House prices are somewhat irrelevant if no one is buying them.

Mortgage Lending 'Drops 95% in a Month'

Gear Head

iTrader: (2)

Well what else do we expect to happen when it forced down our throats everytime we turn on the tv? I can see now...

'Houses prices are falling!' 'You see, we should wait until they drop even further dear.'

'Banks reduce credit.' ' We may aswell wait to buy as it will be cheaper soon!'

The media didn't cause this problem I know, but they sure as hell haven't helped the situation either!

PeteBrant

The ratio between average house price and average wage was unsustainable. it was 9:1 in 2007 - The highest it has ever been. Had the market continued as it was, then it would have been 12:1 by 2012.

When people have to borrow over 100%, and borrow several times thier salary, then it is clear it is unsustainable.

It will only return to the values we saw previously when peoples salaries allow the market to lend at a sensible rate to support such prices. In other words, when the average wage hits around £40K, (it is currently around £24K) then you might see the average house price back up towards £200K

We will never see such irresponsisble lending/borrowing again, the banks simply will not lend such amounts. So I wouldn't pin your hopes on a return to previous prices any time soon. This adjustment had to happen.

Unless you are in any threat of negative equity you have nothing to worry about anyway. It's all relative if you are simply upsizing etc.

davegtt

Nobody has to borrow over 100%

Gordo

So what? Why is this bad?

a) most people only have one house. it is effectively an illiquid asset - i.e. they're never going to sell it to realise the value as they have to live in it.
b) if you ever want to move house then a fall in prices is good as it makes the gap to the next one that much smaller
c) it only becomes an issue if you're in a negative equity situation and want to move. this is a risk with any asset purchase.

the main impact I guess is the negative sentiment attached to it by the media. the media (and government) made people feel richer because property was going up in value. they weren't - in reality they just borrowed more. now that's correcting itself (which everyone knew was coming) surely it has to be good in the medium term?

Gordo

SJ_Skyline

MrBig1

I never said it was bad ..... personally, it is great news for me ...... but, for some, it could be very sad indeed.

FlightMan

At the risk of picking up and infraction, what is the problem?

Falling house prices are only a problem if you want to sell. Buyers love 'em, as do 1st time buyers. If you're selling and have plenty of equity, then it's not much of a problem either.

The unrealsitic cost of house prices casued this crisis, and the sooner they come back to realistic lavels the better. IMHO the sooner the average house is 3.5x the average salary, the better.

FlightMan

A friend of mine was offered a £450k mortgage 6 months ago, open for 6 months, by a high street BS. He couldn't find a property he liked, so he went back last week to get a new offer. £350k. " Changing circumstances" he was told. " Oh, and if you want a £450k house, no problem. Just get a £100k deposit. "

The world has changed people. get used to it.

PeteBrant

I would say that depends.

People were borrowing an extra 25% in order to make the bare shell they just paid £200K for, habitable.

Mitchy260

Lending criteria has not changed, you can still borrow the same multiples as you were able to do so this time last year.

If house prices drop to levels some people are predicting, watch out for a flood in houses for let as people buy multiple homes.

Average household income is around £40k per annum so average house price should theoretically be ITRO of 3x this amount at £120k.

God knows why people assume 1 x average Joe on £25k pa should be able to afford an average home, he should be able to afford a 1-2bed flat/terrace more like.

I think they'll fall down to around £145-150k then stagnate there for 6mths before rising again.

OllyK

Well not for a good 10 years or so anyway.

OllyK

I think dave's point is that nobody is holding a gun to peoples' head and saying you must buy this house at 100%, they could continue with whatever they do at the moment, parents, renting etc.

PeteBrant

I just cannot see banks being willing to lend at such levels ever again - Given the enourmity of the last 6-12 months in the financial sector.

We will return to fairly strict rules on mortgages, I believe.
Of course, but there is no denying there has been huge pressure to be a home owner from all angles.

Devildog

This is interesting - just ht my inbox.

..............................

Property market in August 2008


We use property sales from the Land Registry & Registers of Scotland to create an average property price for each region, and compare this against the average in the previous month - as above - and year.

London: +0.7%; +1.7%
South East: +0.0%; +1.3%
East: -1.1%; -2.9%
E Midlands: -1.9%; -5.1%
North East: +0.7%; -0.1%
North West: +0.3%; -2.0%
South West: -0.5%; -3.4%
Wales: -2.5%; -4.4%
W Midlands: -1.0%; -3.8%
Yorkshire: -0.9%; -2.0%
Scotland: +5.3%; +10.1%
Edinburgh: +5.6%; +9.0%
Glasgow: +5.6%; -17.6%

(% changes to average price - previous month, then year)
...................


Note that it applies to actual sales figures, not lender information or government spin. It indicates that the average change in England over the last month is -.8%

So, if Pete's drivel is to be believed, the average house price in England is £500,000.

So I call sensasionalist and typical bollox from Scoobynet's own version of Marmite

PeteBrant

I tend to use the Nationwide figures as a measure.

House Prices home page

As long as you use the same stick each month, you havbe a fairly good measure.

But I would be utterly amazed if those figures were accurate devildog, London up 1.7% on the year? South East 1.3%? not a chance.

NotoriousREV

Interesting figures Devildog, but surely skewed by the number of sales? If sales are in sharp decline (mortgage down by 90%) and I'll bet it's people at the lower end of the housing market that are struggling to get finance, so fewer lower priced properties are selling which will drive up the average. Maybe.

Devildog

Not a chance based on what though Pete?

They are based on actual house sales.

BTW - I've just stuck my house details into the calculator, and the result is way off what I know to be the actual case.

Dream Weaver

House price drops are a good thing, it all needs to equal out and we need to get rid of the credit revolution of people borrowing money for everything!!

The only barometer I use is my local estate agents, and houses for sale near to me, I dont care about the national average, or houses for sale down South. They have dropped very slightly, so a house that was £299k last year is now £280k so not a huge drop.

Just checking my agents now actually - plenty under offer, and all for decent money still.

Terraced houses are still in high demand and are a similar cost to what they were last year or slightly up - they haven't risen as much as they were doing, but they haven't fallen.

Devildog

Maybe, but the numbers of sales are irrelevant in the context of questioning the pish that Pete (Lewis) posted.

FlightMan

In my area, 4 bed detached were selling for £320k 12 - 15 months ago.

They've now being advertised for £270k.

lozgti

Boooo.Scoobynets really changed.

Someone used to post this kind of thread and three hundred people would reply saying it hasn't happened for five years so it never will happen

That reminds me.The Immigration threads have stopped too.Has everyone gone home?

A