Uk House Prices To Crash

  • Thread starter Thread starter Kathy
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Sorry, didn't you get the joke? Desert Orchid. I was just jumping on your sarcastic bandwagon! :brows:

Desert Orchid

There will be no house price crash.

I really wonder who's spreading these ridiculous rumours. The Portuguese police?

There might be a short-term blip and a slightly less short-term stagnation but the housing market in this country is extraordinarily stable.


Kathy Posted: Sep 16 2007, 11:24 AM

Unfortunately, the type of response I was expecting.

The ability to discuss certain issues on this forum is slowly becoming an uphill struggle.

Desert Orchid
Posted: Sep 16 2007, 11:30 AM

Kathy, I knew you were going to say that.
 
The price of a house is only of any relevance if you're trying to sell it, otherwise it's just a value that is fixed by what someone else is prepared to pay. You don't have to sell. The big difference between this alleged crisis (prices went up 2% where I live last month) and the one engineered by the Tories is in the interest rate. It wasn't the fall in the value of property that crippled people during the early 90's, but the interest they had to pay on the mortgages, which meant they couldn't take equity out of their diminishing asset to off-set this, especially if people lost their job inbetween.

What we're witnessing is the emergence of a 'property rich' and 'property poor' class, which is becoming very divisive, especially as it discriminates generationally. People who own their own properties have been able to take out second mortgages against the value of their homes and hence pay themselves an additional quasi salary, and hence sustain an artifical spending boom based on credit secured against a speculative bubble that has been allowed to build up around the value of a house. In some cases they've elected to buy another hose and become landlords and thus further add to this division by trapping people into a rented sector which they are ever less likely to be able to escape from. In other instances they've just gone on a spending spree and sustained a consumer boom underwritten by their asset rather than their true income.

We have a current proposal to build a so called 'Brown town' or 'eco town' to give it it's prefered name for 15,000 homes a couple of miles away from me. This is being resisted by all the usual NIMBY's but I'm very sceptical as to whether the government really want to go through with this (the idea of building new affordable houses has been mooted since 1997 and the evidence still suggests that supply falls well below demand).

So far as I can see, the one group of people with the authority to make this happen (the Government) have the biggest incentive to ensure that it doesn't (The Treasury). If supply was allowed to meet demand, then the price would fall in line with the equilibrium thus cutting off at a stroke the very source of income that has been used to sustain this artifical spending boom and the prolonged period of relative economic growth.
 
It was reported yesterday's news that prices had fallen 6% in the last year but prices were still "significantly higher" than two years ago. It's still hardly a crash.
 
House Price Crash....nah.....what would a Building Society know!

House prices falls gaining momentum
Published: Thursday, 10 July 2008, 10:03AM

House prices are falling at their fastest rate since the 1990s crash, Britain's biggest mortgage-lender Halifax has said.
The high street bank said prices shed 6.1 per cent of their value in the last year and have fallen by a total of 8.9 per cent so far since January.
Economists are predicting prices will drop by up to 12 per cent in 2008.
The average property price dropped by 2 per cent during June, following a slide of 2.5 per cent in May, to stand at £180,344.
Halifax said the average home now cost the same as in August 2006, although prices are still 2 per cent higher than two years ago and 40 per cent higher than five years ago.
The figures are in line with those reported by Nationwide Building Society last week which showed that house prices fell for the eighth month in a row during June, dropping by 0.9 per cent.
Meanwhile, a new report has said a couple on low incomes would have to save more than a year's worth of their take-home pay to get on the property ladder due to high house prices, large deposits demanded by lenders and high stamp duty levels.
The Royal Institution of Chartered Surveyors said the difficulties now faced by people getting on to the housing ladder are now only slightly below their worst ever level in the third quarter of 2004.
A couple with take-home pay of £27,516 a year would have to save an average of £27,738 to meet the upfront costs of buying a home during the second quarter of 2008, more than 100 per cent of their annual income, and well up on the low of 21 per cent of their pay needed in 1996.
And home-owners are unlikely to receive a boost from the Bank of England's Monetary Policy Committee in the near future.
The MPC, which announces the results of its two-day interest rate setting meeting later, is widely expected to keep the official cost of borrowing on hold at 5 per cent due to inflationary pressures.
© Independent Television News Limited 2008. All rights reserved.
 
We have had many years where the monthly prices have often exceeded 2.5%., it got soooooo boring that most people decided not to mention it.

Despite the so called crash of the 1990's, and after taking 20% off the current for sale prices of comparable houses in our area as a downside, our house is worth (would be valued at) around 600% of what it cost in the latter half of the 1980's. I don't know the national figures on a comparable basis and haven't cared as we bought our house as a place to bring up our family and not as an investment.
Unfortunate for some but a crisis for most ????? Shock/horror sells newspapers. Much more of a concern is the growing number of job losses.
 
Tout Seul said:
Much more of a concern is the growing number of job losses.
Click to expand...

Ah yes, and despite not having lived beyond my means (I have no personal debt) and not having benefited one iota from this artifical consumer spending boom brought about by irresponsible lending, and people taking equity of their homes against a purely speculative bubble, yours truly looks like he's going to be one of its early victims. A combination of budget cutting from one side and corporate policy on the other means that I'm in something of a car crush, which as things stand I'm unlikely to escape from
 
For the benefit of everyone I've temporarily deleted the last 7 posts (Colin - yours merely to retain context) until I talk to the other mods.

Should this thread continue in the direction it was heading, it gets locked.

Those involved, please PM me or any of the other mods should you wish to air your opinion. Don't continue it here.
 
Well unemployment is the indicator that tends to lag the rest, so I suspect I'm unlikely to be the only one, it's just that this time I'm out of the blocks early.
 
Maybe a pillar of the Establishment but the BBC does its research. From the online news magazine 18/7/08.
"


1. HOUSE PRICES ARE UP
_44843328_regional_house_226.gif


Believe it or not, they're still going up in places and still higher than a year ago almost everywhere. It was roundly ignored last week in favour of more gloomy surveys but, according to the house price index compiled by the Department of Communities and Local Government, using data on all completed sales (and so more comprehensive than the partial surveys by the Halifax and Nationwide), in most areas house prices are still up on a year ago. Only in Northern Ireland do they show a fall. In London, the annual rate of house price rises actually went up - from 7.5% in April to 7.8% in May"
 
One thing I've noticed very recently is the glut of "for sale" signs suddenly appearing everywhere - around here, at least. I'm no economist but I'd have thought it would make a lot more sense not to sell now if things are as dire as many are saying they are! Obviously if people can't keep up repayments they're forced to sell, but I'm looking at family homes that have been lived in for over twenty years suddenly appearing on the market in recent weeks. They'll mostly be disappointed I'm sure - the biggest problem with the housing market at the moment as I understand it is that houses simply aren't selling, at any price.

Interesting information there TS - but a little irresonsible of you, shurely?! Why would you want to put up some facts, it only spoils the decent stories some are so desperate to peddle!
 
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