Tradefair & Financials
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Like many i reckon this year will be bad for the housing market , many sellers are now having to take 10% more off prices to sell , estate agents are begging vendors to reduce their prices or they go bust , they talked it up now they are talking it down , reports also coming through of estate agents closing through lack of business ....LOL .
The last 2/3 years has seen the extinction of the First time buyer who has been replaced by the amateur developers , speculators and brainless Buy to let mob { many seeing the rents not even covering the mortgage } all believing the hype in the media and watching property porn programmes on TV, brainwashed into thinking property only ever goes up .
The banks have been only to willing to give them the huge amounts of credit they need to fuel there delusionary property dreams , these banks have shown unimaginable irresponsible and reckless lending to inflate the housing bubble even more , but now the credit crunch is here Northern Rock has blown up and these banks can't sell there loans and mortgage backed securities on to greater fools { usually pension , insurance or hedge funds } so they have to keep the loans on there own books and of course are now being extra careful who they lend too.
So with the tightening in lending now here , prices should be unsustainable and i expect average NOMINAL falls of 15% this year in asking prices, BUT factor in some inflation and i expect REAL falls of 20% over the year **, furthermore many BTL 'ers are realising the games up and are desperatly trying to sell their failed " property investments " ...LOL.
** = 20% average , adjusted for inflation REAL falls will vary from region to region .
The biggest laugh of all will be the 1,000's of town and city centre flats all over the country , these will take the biggest hit , many of these were bought by clueless/naive BTL'ers , most of these plasterboard shoeboxes will be worth at least 50% LESS than what they were purchased for , this is already happening .....LOL ....in 20/30 years time half of these sh1t blocks will be demolished imo.
Any other betfairians got a view ?
The last 2/3 years has seen the extinction of the First time buyer who has been replaced by the amateur developers , speculators and brainless Buy to let mob { many seeing the rents not even covering the mortgage } all believing the hype in the media and watching property porn programmes on TV, brainwashed into thinking property only ever goes up .
The banks have been only to willing to give them the huge amounts of credit they need to fuel there delusionary property dreams , these banks have shown unimaginable irresponsible and reckless lending to inflate the housing bubble even more , but now the credit crunch is here Northern Rock has blown up and these banks can't sell there loans and mortgage backed securities on to greater fools { usually pension , insurance or hedge funds } so they have to keep the loans on there own books and of course are now being extra careful who they lend too.
So with the tightening in lending now here , prices should be unsustainable and i expect average NOMINAL falls of 15% this year in asking prices, BUT factor in some inflation and i expect REAL falls of 20% over the year **, furthermore many BTL 'ers are realising the games up and are desperatly trying to sell their failed " property investments " ...LOL.
** = 20% average , adjusted for inflation REAL falls will vary from region to region .
The biggest laugh of all will be the 1,000's of town and city centre flats all over the country , these will take the biggest hit , many of these were bought by clueless/naive BTL'ers , most of these plasterboard shoeboxes will be worth at least 50% LESS than what they were purchased for , this is already happening .....LOL ....in 20/30 years time half of these sh1t blocks will be demolished imo.
Any other betfairians got a view ?
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Price correction on way?
I will have to move this year should I rent? |
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we're in the middle of one
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I will buy a house ones it has become clear to everyone that a house is nothing more than a bunch of bricks that deteriorate over time, certainly nothing to invest in. That would be about 7 years from now.
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*once.. lol
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House Price Futures Trading
IG Indexand there future Halifax ave price market: Right now they quote March 08 @ 189.9k - 192.9k bid/ask and JUNE 08 @ 182.6k - 186.2k The ave house price from Halifax in DEC 07 was 197k so based on the middle of the quotes then prices are trading down 5.6k ( 2.8% ) for MARCH and 12.6k ( 6.4% ) for JUNE Spreadfair.......... June 08: 188.0-188.5 Dec 08: 180.0-183.5 Dec 09: 168.0-173.9 Dec 10: 168.9-171.9 Some hefty falls already priced in there markets , also a small arb opportunity with the June 08 numbers if you can be @rsed . |
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People have been saying for years that the prices of property can't keep going up and that it's over inflated - but no crash has happened yet and I don't see one happening this year.
Perhaps there'll be a slight reduction but long term I still think property makes a good investment (well, in the SE at least). Demand is greater than supply and that ain't gonna change so there's only one way prices can go. |
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demand is greater than supply? what does that mean?People want to own a house this is not the same thing as economic demand. Demand is a factor of price and ability/willingness to pay. With rising fuel bills,and deflated expectations of high return on property investment people will share houses, rent, live in moble homes, commute. They certainly will not buy if they think prices are falling. House sellers still trying to sell houses at great profit are soon going to wake up to economic reality.
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Just read today that, in Dublin where there has been a 10 yr property boom, there are now 40,000 vacant apartments. Prices are dropping.
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http://www.rte.ie/business/2008/0121/houses.html
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There is a very large problem in Ireland thanks to the normalisation of rates in order to gain entry to the Euro.
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lots of people are taking their houses off the market due to falling prices and hips, supply will then dry up, and the only houses on the market will be repossesed houses and property being sold by buy to let speculators that have got themselves in trouble, so there will be high demand not much supply and estate agents in trouble.
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klaksvik 21 Jan 13:13
People have been saying for years that the prices of property can't keep going up and that it's over inflated - but no crash has happened yet and I don't see one happening this year. Perhaps there'll be a slight reduction but long term I still think property makes a good investment (well, in the SE at least). Demand is greater than supply and that ain't gonna change so there's only one way prices can go. Yet another deluded fool believing prices only ever go up , are you a estate agent or have a vested interest in the housing market by any chance ? And thinking that property is STILL A GOOD INVESTMENT .....LOL , most newbie investors are caking there pants as for many rents arn't even covering the mortgage , then theres voids , maintenance , agency fees plus loads more expenses , many are now desperatly trying to sell up and get out of the market , a bit like rats leaving a sinking ship . Property will no doubt be a good investment sometime in the future when you can get a rental yield of 10% or more , but defo not now . There is NO supply problem the amount of stock agents have it at high levels , over a million properties for sale on Rightmove at the moment , few are buying partly because of fear and also because the banks are no longer lending the ridiculous amounts that were needed to keep the bubble going these last few years . Anyone who bought a property last year will find the property isn't worth what they paid for it , UNLESS the've renovated it or extended it . Property market = one big PYRAMID SCAM built up by the banks and vested interests and now crumbling and collapsing at it's foundations ..........CRASHHHHHHHHHHH |
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Grey Shark
A good friend of mine said exactly those words to me this morning, that is the pyramid scam. I also had a visit from a mate of mine this afternoon who owns 50 odd houses and he hasn't bought one in the last 3 years. He reckons there will be plenty of stock in the auction rooms this time next year. By the way he wouldn't touch apartments with a barge pole and is a multi-millionaire. |
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New mortgage package out soon
BOGOF it really is happening. heres a link to some interesting views to open your minds 5 pages in all the site really does have a grip on whats happening. topics i am only reading now in press are old news the media wont tell news only tat celeb storys I read a great heated debate about housing on this site a view years ago and the chickens are all comming home to roost http://www.housepricecrash.co.uk/forum/index.php?showtopic=64290&hl=grumpy+old+man |
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why do so many people use the term" pyramid" to explain things they dont understand
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We have 2 neighbours with almost identical houses. One is on the market for 270 because he paid almost that for it 3 years ago, and the other has reduced a few times from 250 down to 220. In 9 months he still hasnt sold. It is a very desirable location btw, and in the heyday, you had to fight to get our hands on these.
On the whole its coming down, has to, end of matter. My current thoughts are that 2 years time will be the bottom and time to reinvest, though no rush to as it goes up slowly and down quickly. What I never get about these debates is why people dont look at past cycles and ask the question, what is different to stop it happening again? Oh, er, nothing! Question as good as answered there. If you have followed your local market, you should be able to see that whilst some property is still asking for headline optimistic rates, you can also find several comparables for 20-30% less. The "crash" as it were is when everyone accepts the new price and then it only falls a little more. So, take 35% of the silly prices and 15% of the senible prices and that will be your entry point in a couple of years. |
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To those that still live the isolated supply and demand dream, here is some food for thought.
The demand is for homes, not ownership. In times of downturn renting is accepted as a good move, whereas in upturn it has a stigma. Why are property developers laying staff off? GF works for large property company, and they are making cutbacks, and lots of sales staff that were on short term contracts are not being renewed. Talk is of staff redundacies in next few months. Perhaps the supply and demand equation means that these properties will fly out of the door, regardless of missing the staff that they have happily employed for ten years to help sell them? I think not. Wake up and smell the coffee for your own sake. Do not buy, dont kid yourself that you can sell for yestedays prices. If your in it for the long term, (or stuck), then take some sollice in the fact that rent yeild should increase in coming years. |
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Jim Henson
Great anecdote there m8 , as you have noted the reality is a lot of areas have seen little growth in prices in the last 3 years , the national price indecies have been buoyed by London/south east , N Ireland , east Anglia plus a lot of manipulation of statistics just like how the figures on immigration , inflation etc. is manipulated . You talk of past cycles the 70's crash was masked by inflation , the 89-92 crash was a combination of inflation and nominal falls , some people couldn't give property away in the mid 90's . Then theres Japan at the end of there bubble in 1990 they were doing 100 year mortgages ...LOL .....it was so out of control there that half there banks went bust and property prices still havn't recovered to 1990 levels yet . Hope your G/F job is ok . Wilson Pyramid scam it is , your m8 who hasn't bought for 3 years is like myself and others who sold up or stopped buying , the professionals just watched in awe these last 3 years as all the muppets amateur developers/investors , sheep like BTL mob piled in , watching all the property porn programmes on TV fancying themselves as BIG property magnets , and now so many want out LOL . As for those new build apartments many are selling at auction for up to 50% LESS than what they were bought for 2,3 or4 years ago even at 50% less it's still not worth buying these glued together card board boxes . getup Thanx for advertising the site , i have veteran status on it , there are a few headcases on there but it's a real eye opener to whats really going on in the world of financial engineering , the name of the game for most western governments is to get as many people as possible into as much manageable debt as each individual can manage , and what better vehicle to use than property . The modern kind of slave is a debt slave . |
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GF job should be ok, she has ten years sevice and fairly senior. She would walk into another job anyhow I think.
Today she told how they had to terminate services to a developer who is rumoured to be going to the wall, and owes them 20K, most outstanding since June. I cant believe some people still cant see it tbh. We sold up last year, (after 2 years of trying), and are renting. Most of my mates, said I was wrong whenI did it, and the same ones are now saying its a good call. |
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Jim
Your in a similar posistion to me , we STR'ed {sold to rent } because we wanted to move to another area , but decided to carry on renting as the interest from the capital of our sold house paid the rent , council tax , utilities and all food with some left , a crazy situation . Are you on HPC site ? It's a bears picnic over there now ;) The speed of whats happenend since Northern Rock is amazing , the whole sentiment has changed the whole bottom of the market these last 2/3 years has been supported by speculation , BTL , amateur developers who just believed house prices would continue going up and now the whole bottom is collapsing as many try to sell out , but there to late .........LOL Panorama on BBC on Monday is about all the mortgage fraud thats gone on these last few years , how the banks were giving money to any one that wanted it which in turn helped inflate the bubble . Now the banks can't lend so ........no credit = no market ........CRASH DIVEEEEEEEEE |
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The only people really concerned about a short term drop in prices are the people who have been using equity in their homes to fund a lifestyle. It is all very well doing it with second homes but with your own??
Surveyors are to blame. Looking to justify values with comparables when market going up, but soon will be using same comparables to justify their down valuations. Desperate people selling/remortgaging will lead to surveyors panicing and driving market lower |
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just sold a shop and flat 22k a year rent for 300k at auction end of january, 9 different people bid, its not all doom and gloom but i did get a result
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Hold on a sec,a PYRAMID scam failed because what was being sold was not an essential need.Every generation needs housing,so instead of PYRAMID,think CHAIN LETTER.A chain letter only keeps going if theres a constant supply of people to sustain it,and in the housing market there will bedips,but the next generation keeps coming to the market with inflated wage packets to keep it going.
Isnt this similar to pensions,a man reaches 60 and his pension is being paid by 16/18 year olds upwards who are in employment now,and in turn in 42 odd years time when they reach 60 theirs will be paid by the next bunch of youngsters.Question,Isnt this how it works? |
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Yes. But mortgage lenders are tightening up big time. They are checking income on fast track applications, and asking bigger deposits for self certification. They are declining anyone with adverse credit and are not passing on rate cuts to borrowers. Mortgage approvals being down means there will not be enough buyers for the properties on the market. This is serious. Lenders do not want to take a risk anymore.
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Shelts ,
your on the ball m8 , mortgage approvals are well down , now running at approx 50% of what they were last year as , banks sh1t themselves about potential losses running into billions , and they can no longer push the Mortgage backed securities on to pension , hedge funds etc. so have to keep any NEW loans on there own books , hence why there so picky who they lend to . Also there around 2 million households currently coming off there low fixed teaser rate mortgages they took out 2 years ago when rates were very low and are now having to pay 100's more a month at the new set rate . Pipedreamer , the housing market has been like a pyramid scam these last few years as the bubble inflated out of control , as 100's of 1,000's of amateur investors and other fools piled in and loaded themselves up with as much debt as possible , because they believed all the hype , ramping media , manipulated statistics etc. , and now it's all gone wrong , the banks arn't lending so ........... NO CREDIT { mortgages } = NO MARKET { housing } = Market unsustainable at current levels .This is going to be one hell of mess , so much financial pain to come to so many who have been sucked into the housing market scam these last few years , repo's possibly going to break records this year as well .........and it was all so avoidable . |
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Excellent thread. There seems to be massive force of arguement on here for price falls. Extrememly interesting to see how this matches reality. When is the next indisputably; universally accepted; hard evidence coming?
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Evidence is difficult to come by, but seems there may be a get out of jail free card for many with lower Interest rates, house prices may cling to current levels or thereabouts. Question is . Why despite the evidence did the Bank of England raise Interest rates to 5.25% in frst place. If they had stayed there or increased we could be in for a much bigger problem. if rates fall a little more , there may be hope for first time buyers and remortgagers. This in turn will lead to a few more staying or jumping on the property bandwagon...
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I may have misunderstood your last post above but it seems to contradict your post of 19 Feb, also the Bank of Englands SUPPOSEDLY main job is to control inflation NOT the housing market , but it's currently caught between the two .
The BOE has made a mess of everything by keeping rates to low for to long and help allow excess and irresponsible lending which made the bubble inflate to the size that it WAS , about 18 months ago they started raising rates { too late though } , this is why people who took out fixed mortgages 2/3 years ago are NOW having to pay much more a month now cos of higher rates now . These people are now caught in a debt/mortgage trap , tuf sh-1t imo . Incidently the BOE raised to 5.75% not 5.25% as you said , 5.25% is where we are now as theres been 2 cuts recently . There are no get out of jail cards for people who took out huge mortgages , the housing market is now being shown for the LIE that it has been these last few years , it NEEDS , MUST and WILL correct and like all asset markets there will be winners and losers . |
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melv , outta interest whats your housing position ?
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People who have never owned a property and resent the gains others have made over the last 10 to 15 years tend to be unrealistically bearish and those on house price crash slightly barking to boot.
People who believe property gains can go on for ever have never heard of the economic cycle. |
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Sadly they include our distinguished PM who claims to have abolished boom and bust. He may be in for a bit of a surprise.
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www.housepricecrash.co.uk
its a negative website and for those who love to see the suffering but some useful articles everyday on the price crash |
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Greyshark. Not sure what you mean. On housing market not playing. No rent no mortguage. On price fall small bet with colleague on price fall. On interest rates th govt will makes sure everything is done to prvent house price collapse, icluding interest rate cuts. Too late IMO. Let buuble form for political reasons and lied when saying economy sound when built on a bubble. When will the bubble burst?- the longer it takes the worse it will be-----irresponsilble = gordon Brown.
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The juggling act is the problem. Inflation is high because Oil and energy prices are so high. This element seems to be out of anyones control. The next problem is the economy, which needs a kick start. Only way to get people spending is to give them some money back. Although the housing market is "sick" the lowering of Interest rates will ensure the housing market does not collapse. My previous posts on here were not suggesting total collapse. They were merely pointing out that things are slow at the moment and that it was difficult for some people to borrow money.
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Shelts
What planet are you on ? You want rates lowered so the sheep can go out spending more money they havn't got . The UK has more debt per person than any other western country including the states , and you want the debt bubble to inflate even more :0 ..........unbelievable You say if rates are lowered this "will ensure the housing market does not collapse " , well the've been lowering the rates in the states and over 2 million have lost there homes , 1,000's everyday still losing there homes . In Japan in the early 90's they took rates to zero ,millions still lost there homes and banks went bust , even now property values in Japan are still lower than what they were 15-20 years ago . " The economy needs a kick start " .....LOL......what economy we've sold off most our manufactoring , now we are a DEBT BASED economy where over 20% of the population work in financial services , selling credit , loans , mortgages ,insurance etc. how productive is that ? I think Gordon Brown would like your view of the economy , lets just increase the money supply even more , create more debt , enslave the masses even more , let banks and large corporations profits rise even more and call this economic growth............total b0ll0x . |
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Let buuble form for political reasons and lied when saying economy sound when built on a bubble. When will the bubble burst?- the longer it takes the worse it will be-----irresponsilble = gordon Brown.
Melv , agree with this 100% , it was all a illusion to give the voters a feel good factor , no more boom or bust Brown said but it was all a lie , Brown had one objective and that was to be PM and now he's there no one wants him . |
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Why do people think that lowering interest rates gives them more money?
Lowering interest rates devalues the pound thus making it more expensive to import goods. This means that anything we import will pretty much increase in price. So whilst you might be saving 50 a month on your mortgage repayments, you're going to be spending more money on things you buy that come from abroad. And there isn't much that doesn't come from abroad - petrol to run your car and gas to heat your homes for instance. |
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persimon order books down. Executive said market is tough. But is confident and said things are getting better. Two points what the heck could be happening to improve the market at this point? But more importantly. Ask anyone with a vested interested in selling houses such as right move and they will never say things are getting worse. why sould they encourage price falls and loose profit. Good job makers of addictive drugs such as anti-deprssants can be trusted to be honest; about wether they work; with the medical authorities isn't. Isn't capitalism superb lets get govt out of business.
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