The UK housing market 2012 and beyond

You could ask the North of the UK about negative equity with a market value reduction of 60% from the peaks in 2007/2008. That coupled with the fact 100% (and worse) mortgages where commonplace does mean its a bit of a factor. Lets forget about the interest only mortgages hurdle down the line too.
Saying that, population size / number of houses / rental income does mean house prices probably wouldn't get down to a 'true bottom'. Pound devaluation/collapse change could be argued by both sides.
I'm not sure where the southern Europe line is in England.

60% of Market value wiped in the north.

Must be a very small place or uv got ur wires crossed.

Question of weather houses r gona go up or down is a tough question and depends on a number of external factors as well as a few internal ones, both of which r unpredicatable at best (well I dnt seem to have a clue).

Depending on wat part of country u live I'd say they r pretty cheap ATM.

I live in bham and 100k gets u a pretty good  3 bed home in good condition and in a very good area if not the best.

I'd say 100k is pretty cheap considering petrol was heading very close to £2 a litre and hit well above 1.50 a few weeks back.

So my guess is they can't go much lower. If they do then we r all in serious sh1t. Forget about waiting for the economy to pick up, it's never gona get better.

Think the property Market in uk is totaly dependent on borrowing. So wen and if the banks start to give credit, loan, mortgage etc the property market will boom again no doubt. Agreed

I'd guess it is like the great inflation/deflation debate. The market wants to recorrect but the government has strived to stop this happening. The fight is ongoing. It would be a brave man to call it definitively. On balance I'd favour the line that in a fiat system there is no limit to the number of noughts the government can put on the currency. Given that the question remains how badly do they want to support things? Pretty bad is my hunch. I'd slightly favour holding something, anything, of value at this stage.

Very nice. "Great inflation/deflation debate", "market wants to correct", "fiat system", "slightly favour holding something, anything, of value at this stage".......there's something for everyone in that joke.

And in other news, water is wet.

The system has already failed, only the central bank illusion of a system remains.....and there is NO inflation/deflation debate. This is not speculation, it's mathematical certainty. But I don't expect halfwits who just know enough to be dangerous to know or understand that. You are one of them.

So much anger.

Ino this may come across as a bit stupid but this is the way I see it:

i'm not gonna speak about the uk housing Market as I dnt know too much about it. But I can speak about the Birmingham housing Market as iv lived here all me life as well researching property pretty profoundly over the last 2 years in this area.

And this is my conclusion and I can't see things going anyother way.

1) int rates surly can't go up but we may see it hitting zero  for the first time since f00k knows.

2) property has to increase IMO over the next 40 months. For this to happen banks must start to loan. 

3) if property dnt increase, banks won't loan, if this happens the rental Market won't know where to go PAIRSHAPED yo.

4) if property goes down a bit more and suddenly the rates rise which is gona happen no doubt in the next few years the country will come to an halt.

The overall result is the banks have screwed this country and its people. They have skanked every penny out of us and shut shop and let the riots begin hotel Rwanda style and race won't be the issue here. Who would have guessed uk would have fallen victim to the banks.

History tells us banks screw every country they have been in apart from lololololol. I'll let u guess.

Could it be any other way. I think not

the housing market is stagnated because no one can sell and no can buy

certainly from what i am seeing anyway.

the only people who are buying are cash rich buyers trying to snap up a bargain.

Worrying for the UK gov't is the fact that renting is becoming more popular and is the current trend and people are starting to realise that owning your own home isn't all its cracked up to be.

Unfortunately this is unacceptable for the UK Gov't as our economy is highly correlated to the equity we have in our homes (i.e. spending money we dont actually have) therefore it is unsuprising to see them try to promote lending by the banks with various ill-thought out schemes.

Exactly d1phe. That's exactly my point, no1 can buy and no1 can sell ATM.

Think the future is very unsure.

I'm gona make a stupid predication and say the banks will lend alittle more in nov dec 2012 and that will increase very slightly in 2013.

It's not realy a predication, well half predication half hope

Feck me carlos. You are priceless. Good on yer son. Predicate some more.

Y r just chattin rubbish eo. 

Tell us ur opinion on wats gona happen in the next few years as some are interested and the thread is all about that eo or just shut up and go away.


1question d1phe. Ur bang on that no1 can buy and no1 can sell. This is where we r now. But something has to give in the next 3 years. Interest rates can't stay 0% forever can they.

What will interest rates be for the next 2 years. I mean it's pretty certain there will be no change in interest rates in the next 6 months. But what will happen in the next 30 months or so.

That will tell us a bit about the market.

Any increases in interest rates and the housing Market gets flooded and houses fall by quite a bit

You want a predication or a prediction?

Here is one for free. Tomorrow will be sunny. Unless it rains. But then again it might be just cloudy.

Houses? I do think their intention is to keep interest rates as low as they are now. Barring calamity that is where I think they stay with the virtual stand off maintained and the market being framed at the edges with cash buyers, forced sellers or those who have to be in a certain area for work getting on with things with most others still locked out of the market as the banks continue trying wihtout success to repair themselves.

Please everyone go easy in the smileys, this is a sophisticated thread

carlos

BOE rates will no doubt stay the same until we come out the other side which could be a lot longer than 3 years.

We are starting to see Banks raising their fixed rate mortgages at the moment.  this may be an indication of either they think interest rates will rise long term or they are just trying to make more money - i suspect the latter

If that turns out to be the case, I think we will see a steady rise d13phe

i don't see any steady rises myself.

Coutts today predicts an 11% fall

I can see the Housing market stagnating for years and years personally.

the days of cheap credit and easy access is gone.  home ownership is now unavailable to the majority of the next generation whether the Gov't like it or not as the banks control the market.

Banks certainly control the Market, no doubt about that. Any1 thinking otherwise needs to purchase a brain.

However the rental Market is very high ATM and should play a part in pushing the housing Market up steadily (no boom) if interest rates stay low over the next few years.

Here's an example of y:

house in okish area in bham costs 75000.

25k deposit gives u a 50k mortgage (repayments over 25 years is 200sh a month). That's about a 320-350 profit a month if u include the £30 repayment a month. So it's like 4k profit a year for a 25k investment.

I still think the houses r a safe bet, if not as safe as they once were

This site should answer most of your questions:
http://web.ics.purdue.edu/~ssanty/cgi-bin/eightball.cgi

A few pros and cons.
 
Pro house price inflation:
 
7%+ rental yields (well certainly round my way) which is far more than you get from a bank
According to wiki (http://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom) average gross
Salary is 4100 euros a month that is about 40k a year.  Halifax
Give average House prices of 160k (a 20pc drop, but closer to a 33pc drop in real terms).  So house prices are
4 times average earnings – close to these historical norms that people are always banging on about. 
Population increasing far faster than house building
If sterling depreciates more houses become cheaper for foreign investors
Houses (particularly debt on houses) can be a hedge against inflation
 
Against HPI:
 
Banks aren’t lending as much
Youngsters can’t get a deposit together
Unemployment, no one’s got any money
Just the general doom and gloom surrounding the economy and fear of a financial Armageddon in the future and
That all bets are off regards thinking that our economic future is going to be anything like the sixty years from end
Of ww2 to the start of the current banking crisis.
With average salaries of between 20 and 30k (http://news.bbc.co.uk/1/hi/8151355.stm) and average HPs of 166k according
To nationwide houses are as much as over 8 times average salaries a long way from historical norms.
 
 
what are the official Figures used when talking about the earnings factors, or do people just use whatever they want depending
On which side of the argument they’re on?  And just because the factor was 3 to 4 (apparently) up to about 1997, why does
That mean it should always be 3 to 4?  My summary, and of course it depends on personal situation and location, buying for you
To live in yourself is a good idea (if you can get the deposit).  I think that buy to let is the easiest way to get rich.  Not saying it is easy
But it is the easiest.  What alternatives are there – investing in stocks and shares?  Getting a high powered job?  Starting a company, being
An entrepreneur?  Betfair?  Fk that, none of that sounds particularly easy, and far from safe.  You don’t even need to have increasing prices.

Love that analysis rob. I'm thinking very similar. Excellent points raised. Thank u

40k average wage ?  are you on drugs ?

median wage is around 22k
median house prices are around 130k

that's around x6

1976  (in real terms)
wage median   22k
house median  88k

that's x4

reasons ...

lower interest makes borrowing cheap ,easier to borrow during the 00s with x5 salary accepted, easier borrowing pushes up prices

I think rob dillan meant average wages and average house prices.

However I do agree with most of wat his said after doing some research.

However I think ur bang on about using median as opposed to averages. It's a much better way to evaluateand far more accurate.


Big question here is if house prices drop which is very possible and tbh a bit bleak for most of us, what will happen to rent.

As far as I'm aware rent dnt go down. But say if house prices lose 40% of it's value wat will happen to the rent. Will landlords have to reduce rent also by say 40%.

But I can't see rent going down. Infact it's going a up a bit since say 2005.


Tough question I think. No certainty about it watsoever

carlos - my guess is that rent would come down as a lot of landlords weigh up their investments and yield .


so i would say ,if prices down 40% rent might be around 20-30% down at a guess

Fair enough. I. Couldn't disagree with that even if I tried.

Of course interest rates effect property. But these factors have never Bern consisted in housing Market history (uk) before. As renting in uk wasn't very popular in the 60s. Still dnt think it's possible but do people have a choice? 

See this factor of rent could cushion a house price crash. If they were gona fall by 40%, say if the Market forecasts that but with rent so high the might fall by 25%, maybe 15% and rent remains unchanged.

Do u see where I'm coming from.

Cant see landlords cutting rent, can u?

I think some bargains to be had, bought a property last year with savings as was earning feck all in the bank.

The rent goes straight into the bank, I will have the full buying price back in 9 years time.

Do UNO wat I'm saying geza. Ur on the level.

But guess wat mate they have gone down further from last year.

Guys who r selling r getting desperate. They r knocking alot of money ofvthe asking price. Even though they r still realy low.

Even though the situation is realy bad ATM, surly properties can't go down by that much. Surly not. They r as about as cheap as they can get IMO.

Eg house that costs say 150k in 2007april to 2008 august  is now on the market for between 105-115k with the seller knocking offaboit 15k of price. That means same housecan be purchsed for just over the 80k Market.

Repossessions will be cheaper. Let's say 65. Need to spend between 10-15k on it. Works out about 5-10l cheaper. Well it should be, depends on how bad the house issha gged.

Personaly I'd go for a normal property as it's ready to rent straightaway and no heahaches so repo's dnt always work out that much cheaper.

Carlos ,i  do see what you mean yes... and a good point .
In the UK we have what we call 'accidental landlords'  those who rented out the property because they couldn't sell ,some are still in that position ,also a lot of rents are decided by the govt in benefits form.

to be fair i am clueless about the future , but it will be an interesting one if interest rates do go up

Market is So difficult to predict. IMO it's never been more difficult to see where Prices r going. I have no idea myself now. Changed my mind too many times over the last 2 years.

the only thing i feel certain about is there will be no rising of prices - so i think from a rent point of view you'd be OK  ,plenty of empty properties in the UK up for rent

view it all from an impending disaster view and it will all be ok.

Ttt.  Still flat.

Down 1pc yoy.  I paid off 5pc of the debt in that time, no chance of negequ

Wats gona happen in the next couple of months. I can see no rapid rise

Will be up or down 2pc max imo in 2013.  So a small drop in real terms, all good news.

Bit of advice needed please -
Hoping to move house in the next 12mths, mortgage 31k to pay 15yrs to run house value around 115k. Was thinking of taking on a second mortgage, interest only, rent house 1 untill mortgage paid up then selling house 1 to pay off balance on house 2. Good idea i thought,house prices bound to rise in 15yrs, unless prices fall then i'd be screwed........

Interest rates are low - this discourages banks from lending as they don't make enough money out of it.

If interest rates increase, a lot of people would fail to keep up with their mortgage repayments.

A person working full time on the minimum wage should be able to get a mortgage to buy the sh1test property in town. In most towns/cities they can't. House (flat) prices need to come back to that level. It is just a matter of whether house prices remain stable and wages increase, or wages stay the same and house prices fall. Until that position is reached house prices are overpriced imo and the economy will keep on spluttering along.

So long as you can get a 7.5pc yield by renting out your property they are not overpriced imo.