Uk House Prices To Crash

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Our next door neighbour put her house up for sale last November at just under £180,000, it was sold last month for just under £160,000.

The house is not old, Wimpey built in 2004.

If you haven't a property to sell there are some bargains about at the moment.

Definitely a buyer's market, in my opinion.
 
It's not really a seller's one!!

I know of a several properties that have been on the market for months and months with no interest - even after price drops. People aren't even viewing properties - I know of an immaculate house with a lot of land and stables which would be a dream home for most people - in around 9 months it has had two viewings.

From what I'm being told, even after prices are lowered (drastically in some cases - there's a lovely cottage near me that's been on the market around a year now, already the prices has dropped £50k from £355k to £305k which is a big chunk) people still aren't buying - it seems the main problem isn't that the market has crashed per se (as TS says, the price increases are slowing up rather than house prices dropping through the floor) since still nothing is going cheap, it seems to be more that the market is stagnating since people aren't really buying at the moment.
 
Good house

A GOOD HOUSE WILL ALWAYS SELL, what has changed is it is now harder to borrow money, but the demand for houses has if anything become grater there are to many flats not enuff houses, they have not built any 2 bedroomed houses so that is the thing to get your hands on
 
It's simply Economics 1.i. Supply and Demand.

Demand side.
Banks are restricting flow of necessary finance, greatly reducing number of buyers.
Cost of finance, if obtained, has risen, detering those that can just about afford to buy.
Public sentiment, directed by whatever source, is that prices will be cheaper tomorow. Thus people defer purchase.
Summary: There are not many buyers.

Supply side.
Normal market supply continues, eg. changing jobs, divorce, death etc.
Cost of retaining house increased, prospect of further increases looms, therefore sale attractive to those who are financially stretched as well as forced sales.
Public sentiment. Prices falling I'm going to lose my equity. Take the money and run.
Summary. There are lots of potential sellers.

Result:Supply exceeds demand. Prices will move down.

OOPS! A U-turn by TS you say. Not so.

Many of the factors on both sides are manageable to at least some degree. Finance costs, availabilty of funds can be addressed to restore a more natural balance.

What cannot be addressed is public sentiment and this is, to my mind, the factor that can exacerbate a potentially resolvable problem turning it into a crisis and equally turn an apparently insoluble vicious circle into a normal market.

A decent government, or coalition of governments can address those factors that are to some extent manageable but it is an increasingly difficut task to manage public sentiment not least due the the evolution of the media. Everyone, from the learned to to the loony, including those motivated by self interest ,such as speculators, can a have an impact.

This and this and the accelerating disappearance of responsibile reporting in the news media creates public sentiment that can turn and twist like an errant tornada. flattening facts and creating havoc. It can change in an instant or even vanish.

An obvious example of the malevolent nature and impact of public appears regularly when there are disruptions in the supply of petrol. Certainly in recent instances there has been enough supply to meet normal demand but PS strikes. Queues form, prices rise, and demand is several times times normal levels. Result real and unnecessary shortages.

Extrapolate the fuel example into the housing market and it is evident that PS can destroy lives and livelihoods. That is is why I get heated on this and related subjects, sometimes overheated. For the latter I can only apologise.
 
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Labour say jump - the BBC say how high?

Tout Seul said:
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"
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Given the choice of believing the BBC or The Times, I know which I would prefer to believe.

Let's see what The Times have to say about it 19/07/08
From The Times

July 19, 2008


House prices tipped to fall 20% in two years

Gráinne Gilmore, Economics Correspondent

The value of homes in Britain could slump by a further 20 per cent in the next two years as the number of buyers continues to fall, experts predicted yesterday.
Property values have already dropped by 10 per cent since prices peaked in August last year, wiping £20,000 off the price of an average home, figures from Halifax show.
But Howard Archer, of Global Insight, the economic consultancy, said prices would plummet by a further 20 per cent, or £40,000 on average, before the market begins to recover. “Continued falls in house prices are expected until the first half of 2010, taking the average house price to £140,104, down from £199,600 in August last year,” he said.
Vicky Redwood, of Capital Economics, presented an even bleaker outlook, forecasting that the housing market would not recover until well into 2011.
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Morgan Stanley, the investment bank, said that if prices fall by 25 per cent in the next two years, more than two million - or one in six borrowers - would be in negative equity. Prices have been dragged down by a lack of mortgages available to prospective buyers, as lenders, who have struggled to secure funding in the wake of the credit crunch, demand bigger deposits.
Mortgage lending in June, traditionally one of the busiest periods, plummeted by 32 per cent compared with the same month last year, figures out yesterday from the Council of Mortgage Lenders (CML) showed.
Michael Coogan, director-general of the CML, gave warning that the situation was unlikely to improve this year. “Activity during a traditionally busy time of year for mortgages has been muted by funding shortages and, more recently, dampened consumer demand. This picture will continue for the rest of this year,” he said.
This will come as a further blow to households struggling with spiralling food and energy prices. The average family is now nearly £470 a week worse off than this time last year, according to Asda, the supermarket.
Households had a monthly income of about £538 a week after paying tax during June, 3.2 per cent more than June last year, Asda's monthly income tracker shows. But this rise was more than offset by a 6.8 per cent jump in the cost of essential goods such as food, clothes, utility bills, housing and transport, with households spending around £407 a week on these items.
But there was a glimmer of hope for homeowners as Halifax, cut the rates on some of its home loans by up to 0.2percent for the second time in two weeks. This came after other major lenders, including Nationwide, Abbey and Lloyds TSB also cut their rates.
The rate on Halifax's two-year fixed-rate deal for borrowers with a 25 per cent deposit or equity stake in their property is now 6.47 per cent, down from 6.99 per cent last week. This will save a homeowner with a £200,000 loan more than £750 a year.
But despite this, hundreds of thousands of homeowners will still see their mortgage payments soar. Rates are far higher than they were before the credit crunch hit last autumn, despite recent falls in the base rate.
“Borrowers on tight budgets will have to plan ahead to manage higher mortgage payments than they have been used to,” Mr Coogan said. About 1.5 million homeowners will come to the end of fixed-term deals this year.
Three quarters of potential first-time buyers are abandoning plans to get on to the property ladder, a recent survey by Moneycorp, the foreign exchange group, suggested.
 
Kathy said:
Given the choice of believing the BBC or The Times, I know which I would prefer to believe.

...

This will come as a further blow to households struggling with spiralling food and energy prices. The average family is now nearly £470 a week worse off than this time last year, according to Asda, the supermarket.
Households had a monthly income of about £538 a week after paying tax during June, 3.2 per cent more than June last year, Asda's monthly income tracker shows. But this rise was more than offset by a 6.8 per cent jump in the cost of essential goods such as food, clothes, utility bills, housing and transport, with households spending around £407 a week on these items.
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Does that make sense to anyone?

No, me neither.

What Asda actually said is that:

"Families are more than £450 a year worse off than they were 12 months ago".

Source: The Telegraph http://www.telegraph.co.uk/news/ukn...rse-off-than-12-months-ago,-report-shows.html

The mistake is still on the Times story online:

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article4360193.ece

Someone's dropped a clanger.
 
Surprising that none of the comments on the Times website point it out.

Makes me wonder how many people actually read past the headline of these pieces.
 
A big problem with house prices at the moment - leading to a crash - is that they are just vastly overpriced by estate agents. A house in our village went on the market Feb time for £185,000 (its a tiny 2 up 2 down, mid terrace, but added extra of an acre of land). In 2006 we looked at a house 4 doors down that had 3 bedrooms and extra room downstairs, that was on market for £115k. Is house A's value a true represention? an acre of land around here is only worth £3k. Within a month there was no interest so she dropped it to 170k, it is now marketed as £150k but Under Offer. The lad whose bought it is a friend of mine and hes paid £132k which is a massive £50,000 drop in less than 6 months. But is it a drop or is that what its true value is?
 
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Also another friend of ours has their house up for sale in the same village. It went on the market 1st week in June as it was when we were on holiday at £189,950 its now £159,950. It probably needs to drop another £20,000 before anyone buys it. Round here houses are still selling but what is interesting comparing the final price paid to the valuation
 
Those stories will become more and more common, LE. Houses are only worth what someone is willing to pay. A lot of sellers are trying to hold out for what THEY think their property is worth and possibly based on how much they purchased it for and how much profit they feel they should be making. In reality, it's the marketplace that will very often dictate what the property and land is worth unless you are in the £1million plus bracket. In London for instance where, it is a well known fact, these properties are still selling quite quickly. If you took these properties out of the equation, we would would have a better idea of the real picture as I think these properties can very often distort the overall figures.

Remembering also that those people who are cash rich, own their own properties and are possibly retired are possibly unaffected by this current downturn. People can read into the "crisis" as they see fit. You would be amazed at how many people think just because it doesn't affect them directly then the news is purely scaremongering or a way just to sell papers. You have to be careful where you obtain the information, as Building Societies, Estate Agents and certain newspapers (oh, and the BBC) will obviously have a vested interest in the way certain subjects (such as a house price crash) are reported.
 
The REAL difference is that one is fact (actual) and the other is "tipped" to occur( just as winners often are or not as the case maybe). The BBC and the HMG figures are correct. The tipster is giving his view which to those reading might be taken as fact.

As you clearly state " I know which I would prefer to believe" that is your prerogative. Since that outcome is one would indicate that there will be prolonged problems in the economy it is certainly not one I would wish to believe.
There again if enough people wish it to happen then they of course will be right because the Public Sentiment factor will make it a self fulfilling prophecy. The article is also poorly written, inaccurate and irresponsible.
 
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Kathy said:
You have to be careful where you obtain the information, as Building Societies, Estate Agents and certain newspapers (oh, and the BBC) will obviously have a vested interest in the way certain subjects (such as a house price crash) are reported.
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Certain newspapers including The Times, presumably. Not that Rupert Murdoch would ever have a vested interest in he way certain subjects are reported, of course...
 
Quote;
In reality, it's the marketplace that will very often dictate what the property and land is worth unless you are in the £1million plus bracket. In London for instance where, it is a well known fact, these properties are still selling quite quickly. If you took these properties out of the equation, we would would have a better idea of the real picture as I think these properties can very often distort the overall figures. Quote

In this reality does the price of houses in London distort the recorded price of houses in Scotland?

Quote
"Remembering also that those people who are cash rich, own their own properties and are possibly retired are possibly unaffected by this current downturn. People can read into the "crisis" as they see fit. You would be amazed at how many people think just because it doesn't affect them directly then the news is purely scaremongering or a way just to sell papers."

As this could not possibly be a mis-directed barb towards me, I assume that that you are refering to the majority of Conservative Party supporters. If so it would seem a little harsh, as many feel as I do, that there is a responsibility to help those not as fortunate as they. To consider that such people don't care and are incapable of rational thinking and behaviour is a socialist fallacy.

Quote

"You have to be careful where you obtain the information, as Building Societies, Estate Agents and certain newspapers (oh, and the BBC) will obviously have a vested interest in the way certain subjects (such as a house price crash) are reported." Quote.

I would agree that many of these sources may have vested interests and that you are careful when you frequently quote them. Perhaps we can forgive poor old Auntie because she did at least accurately report Government figures.

That said who would you recommend that we trust?
 
And who is to say the government figures are accurate - apart from erm... the goverment who may well also have a vested interest in the way they report their figures!
 
Just been told the other house has sold and they're moving next week!.... they were desperate to sell so will be interesting to see how much for.

I also think its unfair to say cash rich people aren't interested in the current situation. My parents have no mortgage on their house and dad is retired, yet they keep a vested interested for mine and my siblings sake. There is no chance I can or will be able to afford a house, my brother and sister have both recently finished uni and are both starting postgrad in September(yes I was the black sheep of the family:D!!), they have £10,000 worth of debt each. My brother cant even afford to rent a house never mind buy one. Theres already been talk of them buying us houses and renting them to us, Im sure there are many other parents who are worried for their childrens futures and will help them out if possible to.
 
According to the BBC, repossessions now up to the highest in 12 years. In the first half of this year 18900 houses were repossessed - that's a 48% increase on the same period in 2007. Also 29% more people are now in arrears and this is sadly quite likely to increase.
 
On the bright side, the Halifax won't be using Howard in any more adverts because he's too jolly for these times.
 
Not so fast, Mr Flynn.

All together now: When you're down, and trou-u-bled, and you need a helping hand...
 
Brown and Darling's behaviour in the last few days in this area has been quite disgraceful. Instead of doing nothing, which would be the best course of action, they've flown a kite about a possible Stamp Duty holiday/deferral and then buggered off, effectively paralysing the already moribund market for a month.

And what on earth are they doing trying to encourage people to buy in a falling market anyway, it's totally irresponsible.

This wheeze was tried by Norman Lamont some years ago and ended up achieving nothing.
 
You're quite right, Venusian. The responsible thing would be to clearly state that there will be no relaxation of stamp duty so that the market is not paralysed.

What good would such a move produce in any case? It would constitute a very expensive subsidy, nominally to buyers but in reality to vendors.
 
Grey said:
What good would such a move produce in any case? It would constitute a very expensive subsidy, nominally to buyers but in reality to vendors.
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It would essentially be robbing the poor to give to the (relatively) rich. Say, at the bottom end of the suggested subsidy, you have someone buying a property at £130,000. They put down a deposit of 10%, that's £13,000, so they need to borrow £117,000 - at a loan of 4 times annual income that means the prospective borrower is on a salary of around £30,000 per annum, which is above the national average.

Anyway, it's probably all theoretical. the fool Brown's blown all the money, there isn't any left to pay for it.
 
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