May House Price thread
 

Thought I'd start a new thread as the April one is huge already! (clearly a very popular subject in NSR ;) )

UK house prices set for 14 pct 1-yr fall-market data | Markets | Markets News | Reuters

Halifax data is showing that we're in for a 14% fall in prices over the next year, with prices having already dropped 5% since August 07.

The figures just seem to be getting worse (or better depending on your point of view!)

I do find it pretty shocking that only 6 months or so ago you could switch on the TV and people like Kirstie Allsop were suggesting FTB'ers "do whatever it takes - get on the ladder while you can! - prices only go UP!" (clearly in her interest that prices keep booming as shes a property investor..) A lot of FTB's will be losing their homes as a result of her vested-interest advice. Really pis$es me off - no different to someone on TV ramping shares IMO :mad:

Whats she goinna do -go on the game ? :rolleyes:

was the kirsty program a current of a repeat from years ago?

It's not that bad!!! I dont really know what everybody is worried about. We just gotta ride it out. We all knew it was going to level off, maybe drop a little bit. These people are only making predications.

If my house drops 14%, so will the next house im gonna buy, so it all equals itself out. I think the only thing we need to worry about, is if intending to buy in the next few weeks. We need to be careful not to end in negative equity. Even then, if you do end up there you just got to ride it out and carry on paying your mortgage. You wouldn't of bought the house if you could not afford it.

Can you imagine all the homes that have been sold and bought in the past year, we are talking thousands, and now someone has turned around and said "oh by the way your house is worth 14% less than what you paid for it". The whole country would be fooked, everybody would be neg equity!! Somebody would have to step in.

I think we need to let what's going to happen, happen! then go from there.

Reposessions rocketing.

people can't borrow the money to pay off the debt that paid off the other debt that paid off the remortgage that paid for the RR Sport that replaced the 1.1 Fiesta.

Oh well

I don't think that many FTB'ers will have taken her advice, after all they wouldn't have been able to afford to ! Even then, it would only really affect them if they planned moving in the near future

I dont think there will be a huge amount of people losing their houses, just a lot that will have to tighten their belts, no new car, no holiday, no running up the credit cards.

For most FTB's even though they have over extended to buy somewhere, as long as their mortgage payments dont go up massively ( which was the problem with the last big recession, most of the repossessions were from people who had their mortgage payments double in a couple of months and physically couldnt afford the repayments ) and they are still working, then they can still pay the mortgage.

If prices do drop by a big chunk and leave people with negative equity, the mortgage lenders will just introduce 'special' mortgages for them at a higher interest rate.

House prices are not falling all over the UK though, its a generalisation of the UK as a whole.

I moved into my current property in June 07, and had it valued 2 weeks ago at +£39000. Very recent sales in my street of similar homes have sold for between £35-45000 higher than what i paid for mine last June.

I do live in Aberdeenshire though so this may be the reason why (Nationwide still showing 18% annual gains for this area)

I wonder what happens to the UK average home figure when a couple of £1m priced 2 bed Fulham flats fail to meet their top end and sell for £650k.

Just the same way London salary sways the average UK salary.

If London and the south is falling, then its a sure certainty that the whole of the UK is:Whatever_

Aberdeen is strong thankfully and i dont see that changing:thumb:

It's all regional and where you are in the country, i dont believe Britain as a whole is in risk of a crash. The 1% YOY falls as reported by halifax/nationwide recently i believe is a lot of nonsense swayed by sales in the 'city'. My house is worth considerably more than what it was this time last year. (£39k in 10 months)

They are, month on month, but not yet year on year
r
The Nationwide quarterly figures posted up in the April thread are divided in to regions, and every single one shows a drop.

THough of course, the South will experince the biggest drops, as that has the furthest to fall. Lasst time round the North fell around 10-15%, where as the south fell 30% or thereabouts.

So You are right to say the drops won't be uniform. But everywhere *is* dropping.

The very people who don't want a slump are the ones who are having to admit it is happening.Halifax et al.

Before they would have dressed up the position in flowery language to keep confidence high.

Quite why all the B Socs keep producing doom figures for all to see I don't know.Can't be helping them in anyway to do this.

Anyway,surest sign is the problems with builders and new builds.Think one of the big boys has actually stopped building and hardly anyone is going to look at new developments

Pete.. (Page 7)

http://www.nationwide.co.uk/hpi/historical/q1_2008.pdf

Got a long way to go before YOY falls :) Granted they have dropped a little MOM though but still showing +18%

Scotland as a whole has quite a bit of catching upto do before prices are brought in line with England and that may be its advantage when taking on this ''crash''.

We shall see. I've just put my 1 bed flat in Aberdeen on the market. I firmly believe that the prices have flattened now. I'm not expecting a crash though.

I only bought 18 months ago and Its been valued at 45% more than I paid. I could not afford it now if I was just entering the market, despite earning £10k above the average wage. Its not in a plush area either and I just cant see how that is sustainable.

Aberdeen is no more immune to mortgage conditions than London or Edinburgh for example. If people cant borrow, they cant pay the prices.

My house has gone up £1000000000000000 in the last month alone!

Your zero key appears to be a bit sticky :lol1:

HMG will lose out on a lot of stamp duty :eek:

Yes, sorry about that, I meant £10:lol1:

It is hard to say what the price fall is around here, as very few houses are selling.
We just put ours up and were told -6% from the peak last year. I am not expecting it to sell any time soon though.

If it does, I will have loads to choose from :)

I'm not so sure.

Housing Minister was on the radio this morning.They are pulling out all the stops to try and prevent it such as....

1. Telling lenders to 'work' with borrowers(meaning those that continually default,let them off as long as you can and hold off on taking them to court)

2.Free legal advice to be offered at county courts for those attending possession hearings (CAB people who will presumably be trying to strike deals to get suspended possion orders)

3.Encouraging people to speak totheir lenders early (prusamably those who are defaulting,have a grovel

4.Ask for 'payment holidays'

5.Try and switch to pay interest only.

Not that they are panicking of course.How about ditching HIPS for a start

There is a serious problem and the government knows it I reckon,they are just trying to supress the panic as long as possible.

Reminds me of the finger in the dam story.The housing market is a time bomb

It does need to level off, what with fuel costs, utility bills, stealth taxes etc etc, how is anyone meant to buy a house ?

150k is pretty much entry level in most places, 200k is more realistic, yet most people don't earn much more than 30k, if first time buyers want to have kids and end up loosing a salary for a while it makes it impossible, so we have a situation when the bottom end of the social scale breed with impunity but the ones with the brains and really afford to.

"It is important to recognise we are dealing with an entirely different situation in the market from what was experienced in the early 1990s," Housing Minister Caroline Flint said on Friday.

"The fundamentals of the housing market remain strong with high employment, low interest rates, and long-term demand for homes from first-time buyers."

I wish they would stop saying this all the time 'The fundamentals blah blah blah'

How about being realistic.

Houses are too expensive

Wages bear no resemblance to what people need to borrow

Mortgage interest rates are realistically abot2-3% higher than when we had the good times

Banks and Building societies have all turned into Scrooges

A lovely mix of trouble for 2008

Don't think of house prices like stocks that tend to take the elevator down when they crash. House prices take the stairs up and they take the stairs down. This is the beginning of three to four-year cycle at the end of which house prices will be at least 20% lower that's of course if the buy to let market doesn't implode like the sub prime market in America.

There are millions of buy to let mortgages in the UK. Energy prices and inflation are rocketing at some point the government is going to have to severely raise interest rates and these people with highly leveraged property portfolios are basically knackered if this happens.

The government should do the same as the US and lower taxes plus introduce fiscal stimulus. However they can't because they've borrowed so much money themselves.

Inside track et al have gone out of business

Estate agents are haemorrhaging staff at a phenomenal rate

Anyone that doesn't believe a historical correction is about to take place or is taking place should have a long think about it.

This is of course assuming you can find a bank to lend you the money to buy the next house......

This is of course assuming he wants to buy another house ;)

He could always buy one of these;

BBC NEWS | Business | Repossession orders climb by 17%

:eek2:

so for facts who on here has actually been refused a mortgage?

I know the rates have gone up but other than first time buyers with no deposit has anyone else actually had a problem. With all the press about falling prices etc I'm not surprised no one seems to be buying but how much is this people reacting to the papers and how much is actual fact they cannot borrow what they need?????

The government are actually admitting it is perhaps the biggest problem of all at the moment and telling lenders off for being too prudent.

The other problem is people coming to the end of fixed rate deals and finding most mortgages are running at about 7%.

Very different to the 4% at boom time.In fact nearly double

Mortgage lending in this country isn't currently a problem. So you shouldn't really have any trouble getting a mortgage. The sub prime situation happened in the USA apart from the UK investment banks it hasn't really affected the housing market in the UK.

However, if and probably when the buy to let market unwinds banks will have a massive problem lending to people for property. Nobody knows how bad the situation will be but it's looking more and more likely that when the government is forced to raise interest rates(8-10%) because of the rampant inflation we are currently experiencing the buy to let situation could cause huge problems. In the same way that sub prime affected America.

The whole premise of mortgage lending is that out of your income you will pay the mortgage first to prevent you losing the roof over your head therefore it is a relatively safe bet. The problem with buy to let is that landlords don't really have a problem declaring bankruptcy and handing the keys to the bank for the 20 city centre flats they purchased. Leaving the banks (crucially UK banks) with millions in debt.

most mortgages aren't 7% though if you have any equity you can still get below 6%
If you end up on your Lenders Standard variable rate then yes you are going to get screwed but unless you've been foolish and taken out a 100 or worse 125% mortgage you should still be able to move onto a better rate. Most who have owned their homes for even a 2 year fixed term should have enough equity through house price growth to be able to convince a lender its 85-90% LTV

But they aren't lending on the multiples they were before as I understand it?

depends where you ask etc I've a 10x multiple that went through at the end of March, as ever there are ways and means, the greater amount of equity helps but if you have 25% or more they'll still lend you plenty as they know they will get their money back.

House price crash is here - Citigroup | Dresdner Kleinwort | This is Money

I think banks will continue to demand higher deposits and lend lower multiples. Has to be a good thing, as if they'd not gone stupid with lending in the last 5-10 year then house prices wouldn't be at such stupid levels.

A lot of people who took out 2year fixes in the last couple of years are going to get shafted when the deal runs out.