A few weks ago i put my house up for sale. It is in Crookes and it has appeared in the property Guide twice now. The estate agents, Haybrooks appeared to have done a really good job, having taken some good photos, given it an excellent discription and priced it, i think realistically, considering todays market.
Despite all this i havnt had one enquiry. I knew the market was bad but didn't realise it was so bad.
just wondered if any other sellers were experiencing the same.

If you have no enquiries then there are 2 reasons.
1) The pics are not attractive enough to get an enquiry
2) The price.
Have a look on rightmove.co.uk and search for properties like yours and see what the prices are - this is the kind of thing estate agents should do to get you a price.

Also if the prices seem ok on rightmove - see how long they have been for sale - you may find there are houses on there that have been for 6months plus so if you end up reducing price you will have the advantage!!

good luck

A few weks ago i put my house up for sale. It is in Crookes and it has appeared in the property Guide twice now. The estate agents, Haybrooks appeared to have done a really good job, having taken some good photos, given it an excellent discription and priced it, i think realistically, considering todays market.
Despite all this i havnt had one enquiry. I knew the market was bad but didn't realise it was so bad.
just wondered if any other sellers were experiencing the same.

I don't understand, you didn't know the market was as bad as you thought.

So how do you know if an estate agent priced it realistically?

Today, Sarah Beeney has said those who want to sell have to lower prices.

If an EA tells me my home is worth 250K, I would put it for sale at 150k, then maybe I'd have a small chance of selling, though next year will be worse again.

what complete tosh some people talk.

Your house will be over priced, check it out on rightmove and compare to others that are similar.

Are any houses selling around you? We're also on the market, and as far as I know no other houses around here are getting many, if any viewings, so in a way the asking price is less relevant - if and when people start dipping their toe back into the marketplace and looking to buy, surely they'll start viewing and then making offers, whether at "silly" prices or otherwise..? Only then, IMO, will we get an idea of the correct market value of houses, and until then reducing prices too much will just give buyers a lower price point to bargain down from, which might end up in them getting a bargain, but sellers being stuffed even further.
Just my opinion though (albeit an optimistic one!)

Are any houses selling around you? We're also on the market, and as far as I know no other houses around here are getting many, if any viewings, so in a way the asking price is less relevant - if and when people start dipping their toe back into the marketplace and looking to buy, surely they'll start viewing and then making offers, whether at "silly" prices or otherwise..? Only then, IMO, will we get an idea of the correct market value of houses, and until then reducing prices too much will just give buyers a lower price point to bargain down from, which might end up in them getting a bargain, but sellers being stuffed even further.
Just my opinion though (albeit an optimistic one!)

I agree with you Vicky, but sellers have had it good for many years now.

Everything changes. Buyers have been getting stuffed for years.

The only good advice I could give is simply whatever you may think you'll lose by drammatically lowering your price now will be 50-70% more next year.

There are predictions of 60,000 job losses every month for the coming years and banks simply have no longer got money to give away.

These are conservative predictions.

I'm currently buying and selling, if you want to give me the link to your house i'd be happy to have a critical look and tell you what i think. Pm me if you like.
Its possible we've seen it on RM already i could give you the reasons we haven't made an appt to see.

you'd be better withdrawing it from the market and sitting on your hands until the market improves. Don't lower the price, prices aren't the all important factor at the moment. People are spooked out of the market currently...housebuyers typically exhibit crowd like behaviour, they're either all buying or they're all the harbingers of doom and none are buying...you just need to be patient and wait for the market to turn...Once inflationary pressures have eased in the wider economy BOE base rates will fall and the market may turn...In the meantime it helps if supply is restricted...and pent up demand for houses grows...

A few weks ago i put my house up for sale. It is in Crookes and it has appeared in the property Guide twice now. The estate agents, Haybrooks appeared to have done a really good job, having taken some good photos, given it an excellent discription and priced it, i think realistically, considering todays market.
Despite all this i havnt had one enquiry. I knew the market was bad but didn't realise it was so bad.
just wondered if any other sellers were experiencing the same.

BertieBasset has summed it up well there though I personally wouldn't withdraw if you aren't exposed to any agents fees.

There's so little activity right now that price isn't an issue so don't be tempted to drop it. Even if you do drop it be aware that most deals are going through at around 10% under the asking price at the moment so you could end up in a situation that you can't accept in any case. It will change as things busy up again.

Hopskotch,

Bertiebasset has given you some excellent advice there and I'd take it.
There are no genuine buyers in the market right now, only dreamers living in bedsits making silly offers that nobody is taking.

There isn't a housing market at the moment so just waiting a while will net you the right price when things go back to normal.

Don't be down in the dumps. Thousands are doing the same.

If you sell at 10% off now you will kick yourself next year.

I agree that reducing doesn't help an awful lot at the moment. Our house in Woodseats has been for sale for ages now and a year or so ago they were snapped up within a couple of weeks. We have reduced twice now (although only just for the second time) but still not sold. We won't go ridiculously low just to get a sale as that would mean we could no longer afford to move, but I think it's ok to reduce as long as you get the same kind of reduction off what you are buying.

What road is your property on? Me and my girlfriend have been looking at loads of places in crookes/walkley area. Despite the apparent drop in house values, we're finding many that we consider to be overpriced. It appears that many people are trying to fight the true market.

Where is your property? Me and my girlfriend have been looking at loads of places in crookes/walkley area. Despite the drop in house values, we're finding many that we consider to be overpriced. It appears that many people are trying to fight the true market.

Or maybe some are trying to talk down the true market.

With all due respect if you don't have enough money to buy a house in Crookes/Walkley then you should look at an area you can afford.


It's pointless believing all the price crash hype. A month ago the papers were saying 30% off etc. Have you seen or do you know anyone who's had a bargain like that? Of course not.

People don't need to give away their biggest asset.

People don't need to give away their biggest asset.

And likewise people don't need to overpay for the biggest single purchase they will ever make.

This thread is full of people with their heads in the sand.

A house is worth what someone is willing AND able to pay for it.

The able bit comes down to how much they can borrow. With Lehmans bank on the brink this weekend, if you think the mortgage market is going to turn any time soon, you may find your self sadly mistaken (and regretting your blind optimism).

With all due respect, Sibley, the current state of the market is not all down to 'talk', its the inevitable consequence of the credit binge we have had for the last 10 years.

In todays Telegraph, Sarah Beeny says that any idiot could see this coming as far back as 2005 (as a result she has only been buying houses to do up and sell since then, not keeping them to rent out).

Perhaps it was just the clever ones that didn't see it coming..............

Or maybe some are trying to talk down the true market.

With all due respect if you don't have enough money to buy a house in Crookes/Walkley then you should look at an area you can afford.


It's pointless believing all the price crash hype. A month ago the papers were saying 30% off etc. Have you seen or do you know anyone who's had a bargain like that? Of course not.

People don't need to give away their biggest asset.

With all due respect I think your comment is a bit of a conclusion jump! I never indicated that we did'nt have enough money, just think theres some real dumps for sale which are ridiculously overpriced even considering the expensive area. We are intelligent enough to have done much research into knowing which area is right for us and what we can buy for our budget in those respective areas.

Admittedly, I don't know anyone who has had a bargain recently although I know people who have bought places which are right for them. I understand that people always want to make a profit and expect to sell for considerably more than they bought for, which is fair enough when they have done a lot of work and added value but not when they have done nothing apart from add to age deterioration.

I'd like to hear back from the OP regarding their property though. Maybe it has just not been very well advertised e.g on net etc.. If it adds anything to the discussion by giving my view as a 'buyer', we don't want to be next door or too close to student/rented properties and want an average to nice garden. Maybe that puts people looking to settle down off a little although I obviously realise that may not be teh case for the OP's house. Thats why im interested to know where abouts it is as some parts of crookes are lovely and others not so.

This thread is full of people with their heads in the sand.


I think you really mean people who don't want to sell their house cheap when the market is bad and would rather wait until prices pick up.

It might not suit you but that's the way it is.

The government will have to bail the banks out with the mortgage gaurantee scheme very soon. Once lendings relaxed you have no chance of seeing property prices drop further.

The banks have already started offering decent rates again.

I'd be really sorry to see people losing money because of hyped up crash talk. If you sold cheap now you would regret it for the rest of your life.

Better just sit tight.

If you own a decent property in a nice area you won't lose out.

All these crash talkers ought to buy what they can actually afford. They are just wasting estate agents and sellers time with silly offers. 10 years from now they still won't be on the ladder.

Are any houses selling around you? We're also on the market, and as far as I know no other houses around here are getting many, if any viewings, so in a way the asking price is less relevant - if and when people start dipping their toe back into the marketplace and looking to buy, surely they'll start viewing and then making offers, whether at "silly" prices or otherwise..? Only then, IMO, will we get an idea of the correct market value of houses, and until then reducing prices too much will just give buyers a lower price point to bargain down from, which might end up in them getting a bargain, but sellers being stuffed even further.
Just my opinion though (albeit an optimistic one!)

I think you're confusing cause and effect.
The reason people aren't buying is that the mortgage situation has changed and they can't borrow as much. So if you lower your price and they see that they can afford it then you'll get viewings.
The asking price is the key thing that determines whether you'll get any interest, if it's cheap enough then someone will be interested in buying it, if it isn't then they won't. So that 'cheap enough' price is the true market value.

Hopskotch,

Bertiebasset has given you some excellent advice there and I'd take it.
There are no genuine buyers in the market right now, only dreamers living in bedsits making silly offers that nobody is taking.

There isn't a housing market at the moment so just waiting a while will net you the right price when things go back to normal.

Don't be down in the dumps. Thousands are doing the same.

If you sell at 10% off now you will kick yourself next year.

Where does the blind optimism that things will "go back to normal" come from.

Normal has changed, this is the new normal. Mortgages are back to more sensible multiples, the interest rate isn't going to fall much as inflation is only barely under control and we are officially in a recession.
Market volumes will pick up again once the average selling price has fallen to the average amount that someone can borrow. And until the economy in general recovers (which could be anything from 6 months to 4 years) the upper end of the housing market will be depressed.

I can see a house out of the window on Kirkstone Rd that's been for sale for 6 months now at 115k. I have a look occasionally to see if they've dropped the price, but they obviously aren't in a rush to sell. Haven't seen anyone view it for quite a while now though.

you sound so sure of yourself, we should all listen up because Cyclone is here with all the answers....I don't think you even understand what inflation is!

Where does the blind optimism that things will "go back to normal" come from.

Normal has changed, this is the new normal. Mortgages are back to more sensible multiples, the interest rate isn't going to fall much as inflation is only barely under control and we are officially in a recession.
Market volumes will pick up again once the average selling price has fallen to the average amount that someone can borrow. And until the economy in general recovers (which could be anything from 6 months to 4 years) the upper end of the housing market will be depressed.

you sound so sure of yourself, we should all listen up because Cyclone is here with all the answers....I don't think you even understand what inflation is!

So is that the extent of your counter argument? The best you can do is point out that I sound sure of myself, whereas the predictions you made, you sounded so unsure? And then insult my intelligence, yeah, that makes you're arguments sound much more convincing. :loopy:

Your comments highlight that you use terms very loosely and without really understanding their meaning

So is that the extent of your counter argument? The best you can do is point out that I sound sure of myself, whereas the predictions you made, you sounded so unsure? And then insult my intelligence, yeah, that makes you're arguments sound much more convincing. :loopy:

Cyclone's nuggets of advice...listen up everyone, Cyclone says all this so it must be true! Hang economic theory and behavioural science in these matters, the voice of truth speaks!

"The reason people aren't buying is that the mortgage situation has changed and they can't borrow as much.

So if you lower your price and they see that they can afford it then you'll get viewings.

The asking price is the key thing that determines whether you'll get any interest,

Normal has changed, this is the new normal.

interest rate isn't going to fall much

we are officially in a recession

And until the economy in general recovers (which could be anything from 6 months to 4 years) the upper end of the housing market will be depressed." pmsl

Sorry, not read all the thread but did you get a few valuations? have you got a link to the property?

If your in no rush to move, just keep it up for sale and leave it there .......... the right buyer will come along, eventually, even if it takes 12 months. I personally wouldnt drop the price just yet. Is it priced over £175k? .... im sure i heard on the radio that houses under this figure are now exempt to stamp duty (but i could be wrong) .... if so, it might be an idea to drop it to just under £175 ..... as long as its not a huge discount

Your comments highlight that you use terms very loosely and without really understanding their meaning

Feel free to be more specific, if you actually have a point.
Was it inflation that you didn't like, the devaluation of currency. It's above the governments 2% target, significantly, the BoE is charged with controlling it and has only interest rates as a tool to do so.
Or was it recession, 2 consecutive quarters of negative GDP growth.

That clear enough for you?

Cyclone's nuggets of advice...listen up everyone, Cyclone says all this so it must be true! Hang economic theory and behavioural science in these matters, the voice of truth speaks!

"The reason people aren't buying is that the mortgage situation has changed and they can't borrow as much.

So if you lower your price and they see that they can afford it then you'll get viewings.

The asking price is the key thing that determines whether you'll get any interest,

Normal has changed, this is the new normal.

interest rate isn't going to fall much

we are officially in a recession

And until the economy in general recovers (which could be anything from 6 months to 4 years) the upper end of the housing market will be depressed." pmsl

And you counter opinion is

"Bertie is right, don't listen to Cyclone, his views are rubbish".

At least I had a view, rather than just 'don't listen to him'.

Your level of discussion belongs in a school yard. Maybe you could try countering some of my opinions with logic or fact, rather than just saying "you're wrong, listen to me instead".

I actually posted you a list. Repeating myself, as you still haven't addressed it, you don't appear to understand inflation and unless you secretly have GDP figures that no-one can possibly have until Oct we're not in a recession.

Your subsequent posts are proving my original point. :loopy:

Feel free to be more specific, if you actually have a point.
Was it inflation that you didn't like, the devaluation of currency. It's above the governments 2% target, significantly, the BoE is charged with controlling it and has only interest rates as a tool to do so.
Or was it recession, 2 consecutive quarters of negative GDP growth.

That clear enough for you?

you'd be better withdrawing it from the market and sitting on your hands until the market improves. Don't lower the price, prices aren't the all important factor at the moment. People are spooked out of the market currently...housebuyers typically exhibit crowd like behaviour, they're either all buying or they're all the harbingers of doom and none are buying...you just need to be patient and wait for the market to turn...Once inflationary pressures have eased in the wider economy BOE base rates will fall and the market may turn...In the meantime it helps if supply is restricted...and pent up demand for houses grows...


you sound so sure of yourself, we should all listen up because Bertie is here with all the answers....I don't think you even understand what inflation is!

Can you see the irony (probably not, keep looking though).

If you posted a list I'm sorry but I can't see it.

You've made several posts, you insulted my intelligence and repeated several times that I was the 'voice of truth' and said that I seem very sure of myself.
You haven't actually made any response to a single point I've made that couldn't have been made by a child. You could simply point and go "nahh, nahh, na nahh, nahh" if you wish.

repeated again, you use terms you clearly don't understand. The consequences of your actions is to mis-inform others who are genuinely looking for help.

And you counter opinion is

"Bertie is right, don't listen to Cyclone, his views are rubbish".

At least I had a view, rather than just 'don't listen to him'.

Your level of discussion belongs in a school yard. Maybe you could try countering some of my opinions with logic or fact, rather than just saying "you're wrong, listen to me instead".

you've quoted it yourself above...oh dear cyclone's blowing himself out... :hihi:

If you posted a list I'm sorry but I can't see it.

you've quoted it yourself above...oh dear cyclone's blowing himself out... :hihi:

You'll note that the post I quoted was from before any of my posts.

And it's not a list, it's a paragraph. How can something you posted before, be a response to my comments. Are you confused about how responses have to come after the thing they respond to?

repeated again, you use terms you clearly don't understand. The consequences of your actions is to mis-inform others who are genuinely looking for help.

Yes, you keep saying I don't understand.
You don't provide any evidence to back that up, you haven't tried to define the terms yourself, you haven't posted links to definitions, you haven't explain how my understanding is lacking.

Can you see why just repeating "you don't understand" isn't a valuable contribution to a debate?

Cyclone is now "the Office for National Statistics that haven't actually been collected yet". He has a view of where the economy is after the third quarter, but we're not actually finished with the third quarter yet...

He can't substantiate his views about inflation because his posts up until now show that he doesn't really understand what it is...and he's now trying to save face by going off topic....



You'll note that the post I quoted was from before any of my posts.

And it's not a list, it's a paragraph. How can something you posted before, be a response to my comments. Are you confused about how responses have to come after the thing they respond to?

inflation is a continuous increase in the general level of prices...presumably now you can see why you've been spouting such rubbish

Yes, you keep saying I don't understand.
You don't provide any evidence to back that up, you haven't tried to define the terms yourself, you haven't posted links to definitions, you haven't explain how my understanding is lacking.

Can you see why just repeating "you don't understand" isn't a valuable contribution to a debate?

And once again you just keep claiming that I don't understand.

In the spirit of your posts.

No, you don't understand inflation, basic economics or how to hold a sensible discussion.

Have you substantiated anything yet? No, all you've done is repeat "you don't understand" and claimed that an earlier post was somehow a response to a later one.

inflation is a continuous increase in the general level of prices...presumably now you can see why you've been spouting such rubbish

That's describing the same thing. If currency devalues then a commodity will cost more, duh.

Hey, looks like you don't understand the relationship between currency, pricing and inflation. :hihi:

from a previous post of yours you're just a saddo who looks out of his window at who goes in and out of someone's house all day...strange!

I'm not here to teach you economics, I simply think your punk understanding of economics is very dangerous. Go read...

And once again you just keep claiming that I don't understand.

In the spirit of your posts.

No, you don't understand inflation, basic economics or how to hold a sensible discussion.

Have you substantiated anything yet? No, all you've done is repeat "you don't understand" and claimed that an earlier post was somehow a response to a later one.

it's a standard definition of inflation and your rejection of it highlights your total ignorance of economics...and evidences that you don't understand the concept of inflation.

That's describing the same thing. If currency devalues then a commodity will cost more, duh.

Hey, looks like you don't understand the relationship between currency, pricing and inflation. :hihi:

no it wont unless the commodity is imported. This is another example of your slack understanding and trail of half truths of economics throughout this post.

If currency devalues then a commodity will cost more, duh.

Hey, looks like you don't understand the relationship between currency, pricing and inflation. :hihi:

I too am trying to sell but also had no views - and I had it valued by 3 agents with similar prices. The estate agent is suggesting I do a 5 % vendor deposit as they reckon that will draw in the first time buyers (i.e. on completion 5% of asking price goes to buyers mortgage deposit so they can get a lower percentage loan to value). Has anyone else tried that? did it get you viewings / or better still a buyer? 5% sounds a only little drop but that added to the estate agents cut means I get £9k less than my asking price at best.... Just wondering if other vendors have found it's a good idea? Seems just dropping prices doesn't always equal a sale, so thought it's worth trying something a bit different.

I have to move down south for a new job so just waiting for the market to improve sadly isn't a straight forward option for me.

no it wont unless the commodity is imported. This is another example of your slack understanding and trail of half truths of economics throughout this post.

Bertie, what line of work are you in, out of interest?

tree-frog, you seem to have been put in that newly created twilight zone between £175k -£200k so it would pay to take care with any decisions that you make. The psychological effect is for buyers to encourage vendors to drop to <£175k in order to save a couple of grand of stamp duty, it it costs you £20k to save them £2k. Your negotiating skills will come in to play if that does happen. Wee Gordy and his band of little elves really has made a hash of things.

Sadly in the meantime there is cold comfort to learn that you are in the very same position as everyone else. There is simply next to nobody out there willing to buy at the moment until the wider economic picture becomes clearer... which it will. Perhaps it is time to consider becoming both a landlord, and a tenant?

from a previous post of yours you're just a saddo who looks out of his window at who goes in and out of someone's house all day...strange!

I'm not here to teach you economics, I simply think your punk understanding of economics is very dangerous. Go read...

And from your entire list of posting here you're a saddo who thinks that insults and contradiction amounts holding a discussion. It doesn't, go and learn how to have an adult conversation.

it's a standard definition of inflation and your rejection of it highlights your total ignorance of economics...and evidences that you don't understand the concept of inflation.

I didn't reject it, are you slow or something? I said it's exactly the same as the definition I gave.

no it wont unless the commodity is imported. This is another example of your slack understanding and trail of half truths of economics throughout this post.

Yes it will, it's part of why inflation exists in the first place.

People demand pay rises, the cost of raw materials increases (because the workers want more pay), the cost of secondary manufacturer increases (ie commodities being sold). The cycle is complete and the increased pay that was demanded buys just the same as it did before. Or to look at it the other way around money is worth less, the currency is devalued by the % that prices and wages inflated.

I don't know why I'm bothering to explain this, it's pretty clear that you don't understand inflation or basic economics and more to the point you don't really care.

I do have to laugh at the people in this thread who think £200k for an average house in an average area is "normal". Get a grip, prices went mental high (7 times average salary, 125% LTV, self-cert and "affodability" mortgages (based on <5% interest!) - how exactly was that going to last?.

Prices are finally beginning to revert to a sustainable level. If you think prices have dropped a lot already (12.8% for those who haven't been paying attention), you're going to be in for a big shock in 12 & 24 months time. 12 months ago when I said prices would fall, people said no they won't. Now they are falling, those people naturally say "well they won't for much longer!" :rolleyes:

But what of it? Who cares if prices fall? An estimate not long ago reckoned that 80% of Brits are BETTER OFF when house prices fall. Unless you end up in negative equity (and HAVE to sell), or plan to DOWNsize, this means you. Just think, that next step up the ladded just got (for arguments sake) £10k closer. (Plus, don't forget, that £10k = £20k by the time you've paid that off via a mortgage!)

Long may the crash continue! :)

EDIT to post up a link which may be of special interest to those who think "the government should do something".
http://www.independent.co.uk/news/business/comment/margareta-pagano/margareta-pagano-the-last-thing-our-housing-market-needs-is-to-be-propped-up-929651.html
:)

in a closed economy with no foreign trade exchange rates have no consequences...I bet you think you're the expert on everything, certainly not economics as you don't have even a basic comprehension.

Yes it will, it's part of why inflation exists in the first place.

People demand pay rises, the cost of raw materials increases (because the workers want more pay), the cost of secondary manufacturer increases (ie commodities being sold). The cycle is complete and the increased pay that was demanded buys just the same as it did before. Or to look at it the other way around money is worth less, the currency is devalued by the % that prices and wages inflated.

I don't know why I'm bothering to explain this, it's pretty clear that you don't understand inflation or basic economics and more to the point you don't really care.

you didn't give a definition of inflation despite several requests....

I didn't reject it, are you slow or something? I said it's exactly the same as the definition I gave.

in a closed economy with no foreign trade exchange rates have no consequences...I bet you think you're the expert on everything, certainly not economics as you don't have even a basic comprehension.

as you didn't reply to my question of your line of work, it seems you have some houses you are trying to sell (are you an estate agent or a developer?)

with your full grasp or economics, should you not have seen this crash coming?

i see you are trying to rent out the ones you can't sell - that must be hitting your cashflow (hope your bank manager is an understanding soul)

with all these factors, I won't be taking advice from you on the property market, thanks all the same.

in a closed economy with no foreign trade exchange rates have no consequences...I bet you think you're the expert on everything, certainly not economics as you don't have even a basic comprehension.

Whereas you do, and you've proven that by continually just going " you're wrong".

I suggest we stop this, it isn't going anywhere, it was never going anywhere from your first childish response. State your own opinion, and if you wish to argue with mine do so, but don't just keep saying "you're wrong" or "you don't understand", it doesn't help anyone and just wastes my time and everyones bandwidth.

Just to restate. This is what my opinion is. In which I say that inflation is barely under control (enough for BB to decide that I don't even know what inflation is apparently).
Just to back that up
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/12/bcninfla112.xml
http://www.marketoracle.co.uk/Article5149.html
There are more obviously, but 'inflation out of control' seems to be a popular headline.
Interest rates are not going to fall fast and mortgage multiples are not going to go back to 5* 100% or more.

The reason people aren't buying is that the mortgage situation has changed and they can't borrow as much. So if you lower your price and they see that they can afford it then you'll get viewings.
The asking price is the key thing that determines whether you'll get any interest, if it's cheap enough then someone will be interested in buying it, if it isn't then they won't. So that 'cheap enough' price is the true market value.
__________________
Normal has changed, this is the new normal. Mortgages are back to more sensible multiples, the interest rate isn't going to fall much as inflation is only barely under control and we are officially in a recession.
Market volumes will pick up again once the average selling price has fallen to the average amount that someone can borrow. And until the economy in general recovers (which could be anything from 6 months to 4 years) the upper end of the housing market will be depressed.

wrong! Nothing for sale, all rented out. Keen to buy.

as you didn't reply to my question of your line of work, it seems you have some houses you are trying to sell (are you an estate agent or a developer?)

with your full grasp or economics, should you not have seen this crash coming?

i see you are trying to rent out the ones you can't sell - that must be hitting your cashflow (hope your bank manager is an understanding soul)

with all these factors, I won't be taking advice from you on the property market, thanks all the same.

I've provided explanations of terms and concepts you were using very loosely. I'll let you get back to spying on the neighbours....


Whereas you do, and you've proven that by continually just going " you're wrong".

I suggest we stop this, it isn't going anywhere, it was never going anywhere from your first childish response. State your own opinion, and if you wish to argue with mine do so, but don't just keep saying "you're wrong" or "you don't understand", it doesn't help anyone and just wastes my time and everyones bandwidth.

No you haven't. You've provided a definition of inflation, which happens to be the same as the definition I used. Hardly proof that you are some economics master whereas I know nothing.

If you wish to continue being stupid, tell me, what was it in my original statement (posted just above for you) with reference to inflation that gave you any problems.

Do you disagree with my statement that "inflation is barely under control"? Do you desperately wish that you're going to be right and that interest rates will fall?

the interest rate isn't going to fall much as inflation is only barely under control

Which sparked you into a childish retort

you sound so sure of yourself, we should all listen up because Cyclone is here with all the answers....I don't think you even understand what inflation is!

Explain if you can how saying that inflation isn't under control indicates that I don't understand it.

And whilst we're at it, explain why sounding sure of myself upsets you.
You're not very timid yourself when putting forward your view, do you just get angry when someone disagrees?

didn't you say you weren't going to reply anymore????

You didn't use a definition of inflation. Can't you remember what you did or didn't write?

Anyway how many people have been in and out of the neighbours house so far this morning....? I'm sure you'll know... :loopy:

No you haven't. You've provided a definition of inflation, which happens to be the same as the definition I used. Hardly proof that you are some economics master whereas I know nothing.

If you wish to continue being stupid, tell me, what was it in my original statement (posted just above for you) with reference to inflation that gave you any problems.

Do you disagree with my statement that "inflation is barely under control"? Do you desperately wish that you're going to be right and that interest rates will fall?



Which sparked you into a childish retort



Explain if you can how saying that inflation isn't under control indicates that I don't understand it.

And whilst we're at it, explain why sounding sure of myself upsets you.
You're not very timid yourself when putting forward your view, do you just get angry when someone disagrees?

Any chance of you two settling this out of view of the rest of us ?....let us know who won though...Ta

Are you going to substantiate this for example?????!

Cyclone quotes stats from data that can't even be collected yet, nevermind published. Classic!



and we are officially in a recession.

.

didn't you say you weren't going to reply anymore????

You didn't use a definition of inflation. Can't you remember what you did or didn't write?

Anyway how many people have been in and out of the neighbours house so far this morning....? I'm sure you'll know... :loopy:

Avoiding the question eh, and just making little snipey remarks. Clearly a master debater.

You also can't read. I said I suggest that we stop this, not that I wasn't going to reply. I still suggest that we stop, but you're like a dog with a bone, you just can't let go.

Many of your posts are littered with inaccuracies. I'm not here to teach you economics as I've previously stated. You use a defacto style when writing which oversimplifies the situations you are presumably attempting to describe. There are big gaps in your understanding of economics. You could go and read more about the various concepts and definitions to slay some of your ignorance on the subject matter, you'll then be better able to give a more informed opinion.

Avoiding the question eh, and just making little snipey remarks. Clearly a master debater.

You also can't read. I said I suggest that we stop this, not that I wasn't going to reply. I still suggest that we stop, but you're like a dog with a bone, you just can't let go.

Are you going to substantiate this for example????

Quote:
Originally Posted by Cyclone

and we are officially in a recession.

.

Mark (BertieBasset), don't take offence but you are coming across as a little..... rabid. (Multiple question marks and exclamation marks always create an authoritative post!!!!!!!!!!!!!!!!!!one111!!! ;))

Maybe try to post a little more coherently and a little less personally? If you don't agree with Cyclone, fine, but don't attack him - it does nothing for your credibility. Why don't you try and show why you think he's wrong; perhaps link to [credible] sources that substantiate your points, in the same way you're keen he does.

Gents, in all seriousness now is a good time to draw a line under it and move on before the Mods cruise on by and make you draw a line by locking the thread or deleting all your posts.

Let's try to get back to something that vaguely resembles the OP.

I've done that if you read the previous posts. Maybe you ought to re-read his posts if you're trying to get a balanced view of who's attacking who

Mark (BertieBasset), don't take offence but you are coming across as a little..... rabid. (Multiple question marks and exclamation marks always create an authorities post!!!!!!!!!!!!!!!!!!one111!!! ;))

Maybe try to post a little more coherently and a little less personally? If you don't agree with Cyclone, fine, but don't attack him - it does nothing for your credibility. Why don't you try and show why you think he's wrong; perhaps link to [credible] sources that substantiate your points, in the same way you're keen he does.

I've read the lot, and that is my balanced view. You say Cyclone's posts are littered with inaccuracies - and perhaps they are - but don't offer anything to back up what you say so you don't look any better than he does. A least he appears to have his temper under control, but your posts sometimes get a little 'excited'.

Move your game up a few intellectual notches - both of you - I'm not being patronising as sure you can both do it! :P

tree-frog, you seem to have been put in that newly created twilight zone between £175k -£200k so it would pay to take care with any decisions that you make. The psychological effect is for buyers to encourage vendors to drop to <£175k in order to save a couple of grand of stamp duty, it it costs you £20k to save them £2k. Your negotiating skills will come in to play if that does happen. Wee Gordy and his band of little elves really has made a hash of things.

Sadly in the meantime there is cold comfort to learn that you are in the very same position as everyone else. There is simply next to nobody out there willing to buy at the moment until the wider economic picture becomes clearer... which it will. Perhaps it is time to consider becoming both a landlord, and a tenant?


My house is on at £129k so well below the new stamp duty level..... But I think you're right - there are just no buyers out there.
Had hoped could at least do part-ex for a new build but hardly any developers are now doing it on their sites and those who are (Barratts) only part-ex properties within 30 miles, so counts me out when I'm relocating 100 miles. Just hope there are people wanting to rent my house otherwise I really am truly stuffed!

But as a feeble hope to try and entice a buyer I am thinking of the 5% deposit option.... has anyone had any success with that????

(I agree with the other posters - Bertiebassett and cyclone - please can you settle your argument / debate off line and come back when you're done. It's getting tedious to wade through... sorry guys!)

I don't think on a Forum like this we're going to be using the Harvard style of referencing. If you disagree with any of the economic points I've made let's hear it...



I've read the lot, and that is my balanced view. You say Cyclone's posts are littered with inaccuracies - and perhaps they are - but don't offer anything to back up what you say so you don't look any better than he does. A least he appears to have his temper under control, but your posts sometimes get a little 'excited'.

Move your game up a few intellectual notches - both of you - I'm not being patronising as sure you can both do it! :P

another thread ruined.

my personal favourate is the post saying lets stop this now....about 8 posts back.

Are you going to substantiate this for example????

Quote:
Originally Posted by Cyclone

and we are officially in a recession.

.
Look on the bbc website...or any decent news site.....from the CBI.....we are in a recession

that may be linked to 5000 redundancies at Lehmans, and the other thousands of airline workers.

how many properties do you rent out Bertie?

no it wont unless the commodity is imported. This is another example of your slack understanding and trail of half truths of economics throughout this post.

But here in the UK, we import almost everything..don't you buy goods?

I don't think on a Forum like this we're going to be using the Harvard style of referencing. If you disagree with any of the economic points I've made let's hear it...

OK, do you think a recession, like the one we're almost certainly entering, will affect house prices? If so, how? If not, why not?

I believe house prices will continue to drop substantially, as:
- more people struggle to pay their mortgage (due to lack of work, plus not being able to afford to pay the bills (due to inflation));
- which means more properties are reposessed (20,000 in the first 6 months of this year, estimated 45,000 by the end of 2008 - NB: I can provide the source if required, I'll just have to go hunt for it ;));
- which puts extra cheap "bargain" repossed homes onto the market (lowering the price of non-forced sales as a result);
- which means the banks will be once bitten twice shy and will restrict lending even further as a result (i.e. smaller LTVs and smaller income/lending multiples).


And those are just my points about recession and how it will affect the housing market. I can go into detail about other aspects in other posts. :)

OK, do you think a recession, like the one we're almost certainly entering, will affect house prices? If so, how? If not, why not?

I believe house prices will continue to drop substantially, as:
- more people struggle to pay their mortgage (due to lack of work);
- which means more properties are reposessed (20,000 in the first 6 months of this year, estimated 45,000 by the end of 2008 - NB: I can provide the source if required, I'll just have to go hunt for it ;));
- which puts extra cheap "bargain" repossed homes onto the market (lowering the price of non-forced sales as a result);
- which means the banks will be once bitten twice shy and will restrict lending even further as a result (i.e. smaller LTVs and smaller income/lending multiples).


And those are just my points about recession and how it will affect the housing market. I can go into detail about other aspects in other posts. :)

Alot of common sense in your post SupraSteve.

Those with multiple properties to rent or sell will be in for a 'tough' few years.

Where is Bertie?

another thread ruined.

my personal favourate is the post saying lets stop this now....about 8 posts back.
To be fair it only said stop bickering and return to the original subject, plus it was only from a normal registered member, albeit an ex mod. ;) (For the record I had previously (immediately previously) posted similar!)

it's like casting pearls to swine with you lot, I'm not wasting any more of my time on you...

Alot of common sense in your post SupraSteve.

Those with multiple properties to rent or sell will be in for a 'tough' few years.

Where is Bertie?
I hope BTL lenders start making margin calls, that would sort out the chaff from the wheat. I wonder if Mark knows about those, he should do as a small-time property investor; they'll be in the small print on the mortgages he's signed.

it's like casting pearls to swine with you lot, I'm not wasting any more of my time on you...
Out of your depth all of a sudden?
Don't like hearing the truth?

Shame, I wasn't even getting started. I thought you were up for a debate, but like most with a Vested Interest, it's fingers in ears time la la la I can't hear you. :D

it's like casting pearls to swine with you lot, I'm not wasting any more of my time on you...

Ok then, maybe Phyllis and Tony can stand their ground, as you seem to be throwing your dummy out.

EDIT: Did you see the bbc website about the CBI and recession, the fact you had a go to Cyclone about?

He was correct and you were, as usual, wrong
http://news.bbc.co.uk/1/hi/business/7615207.stm

Now go off and clean your tenants toilets.

UK PLC is a bit screwed right now, banking was what we did best as a nation, and that is all in tatters now.

We don't make anything so the devaluing pound doesn't have much of a positive side as we don't export much - we're a net importer - so overall we're worse off.

Recession was inevitable, I said as much 6 months ago. We haven't seen the end of the banking troubles either, not by a long shot. Things will get much, much worse before they get better.

it's like casting pearls to swine with you lot, I'm not wasting any more of my time on you...

Don't do that BertieBasset - you have plenty of good stuff to contribute. We just don't need to endure the spat with Cyclone. :)

I hope BTL lenders start making margin calls, that would sort out the chaff from the wheat. I wonder if Mark knows about those, he should do as a small-time property investor; they'll be in the small print on the mortgages he's signed.

It isn't going to happen, period. Providing that repayments are maintained there is no need to express individual equity. The market simply isn't going to 'crash' in the way that some suggest. The economic model simply doesn't allow for it, even now with all the hysterical headlines.

If a genuine 'crash' were to occur then you will be more concerned about finding a soup kitchen and hot water. Don't wish for what you don't really want. ;)

Don't do that BertieBasset - you have plenty of good stuff to contribute. We just don't need to endure the spat with Cyclone. :)

I don't think it's specifically me, he doesn't seem to like anyone disagreeing with his expert opinion.
Suprasteve was the final straw, two people disagreeing is more than he can handle.

..................

It isn't going to happen, period. Providing that repayments are maintained there is no need to express individual equity. The market simply isn't going to 'crash' in the way that some suggest. The economic model simply doesn't allow for it, even now with all the hysterical headlines.
A moot* point perhaps; I suspect you're right and it won't happen, but not because economic model doesn't allow for it - it's in the Ts&Cs so I assure you, lawyers rule this world and certainly can make it happen if they choose too! ;)

Instead, I would wager it's more likely the banks don't want thousands of repossed properties on their hands (they aren't house sellers) and an equal number of debts still unpaid. Rather the more likely outcome is -as you say - so long as the BTL-er keeps affording their repayments, the banks will hold their breath and hope the mortgagee keeps their head above water until such time as property values return to -12 months ago when they will no longer care as their risk returns to zero. I don't expect that will be for at least 5 years, probbaly several years more.


In the meantime, BTL-loans will become a very different product to what we've seen. Long gnoe is the day of cheap credit and high LTV ratios.

(* = genuine meaning of the word!)

If a genuine 'crash' were to occur then you will be more concerned about finding a soup kitchen and hot water. Don't wish for what you don't really want. ;)
A little patronising maybe? Though knowing you through the forum I'll assume it wasn't meant to be. Although I obviously don't want to end up in a soup kitchen, I would very much say we're in a crash. How do you define a "genuine crash"; the usual benchmark is a fall of 10% or more from a recent peak, we're hit that (and I suspect we'll ultimately see the average house price fall by at least 30%, possibly 40% and quite possibly see 50% falls in some areas - more if you include inflation).

I worry that you are still in 'the denial stage', Tony. ;)

People think you're mad if you say I can see house prices dropping by 30%~50%, but why not? They went up 300% in 10 years, dropping 50% still sees them at 150% the level they were just 10 years ago!

A significant drop would bring prices back to being affordable, THE KEY measure of when buyers can think(!) about returning to the market. Property clearly isn't affordable now (especially with the sudden and extreme contraction of the lending markets - which despite your best wishes, WON'T be returning to the sillyness it saw 18 months ago, ever!) and is why the FTBers have all dried up. Amateur landlords will go bust, and those that survive will find (are finding!) financing their aspirations incredibly difficult, so don't look to them to replace the FTB and prop up the market.

The property market of recent years was all built on delusion and an artificial demand stemming mostly from rediculous lending that was partially fuelled by the false belief that "if I don't get on the ladder now, I never will" and that "property prices only ever go up!"; all these have quickly evaporated and thank goodness they have, a correction is long overdue.

^^ Some more of my 2p ^^ I have plenty more. ;)

I don't think it's specifically me, he doesn't seem to like anyone disagreeing with his expert opinion.
Suprasteve was the final straw, two people disagreeing is more than he can handle.
It certainly looked that way to me.

SupraSteve, I certainly didn't intend to patronise - my apologies if it sounded that way. :)

The matters of affordability and ratios are important indicators but it's probably a bit too easy to get sidetracked into these (quite blunt) markers. Everyone has different circumstances and my version of affordability might be very different to yours even if we look similar on the surface. I have never been an advocate of over-inflation in house prices, but I have always maintained that if you want somewhere to live then you should just go out and buy it. That holds as true today as it did a year ago. To suggest that I am 'in denial' is something of a misappropriation of my views.

Ultimately, funders only care about one thing - how do they get their money back with profit. Actually that's two things but we'll not split hairs. :) As you point out they have absolutely no interest in becoming landlords to thousands of individual tenants and they will move heaven and earth to avoid that.

Mortgage funding in the UK is a little different to the US, but far too many people look at the US and assume that it is parallel. It is not. For a start, a mortgage here stays with the owner, not the loan company. Therefore in the UK you cannot just hand back the keys and walk away from the debt - 'jingle mail' as it has become known in the US. Because of this there is more pressure on both the owner and the lender to sit it out.

Next, the US slide has been dragged out over years. Ours has taken months. During this time people have not suffered the protracted agony of being unable to meet payments. The short sharp shock looks far more dramatic, but it should turn out to be a better situation. Everybody suffers together. The market grinds to a halt like hitting a brick wall.

However we should not make the mistake of assuming that people don't want to move or don't have the wherewithal to move. They simply are not moving until the picture becomes clearer.

Now there remains the huge caveat of the soup kitchen scenario (ie total economic meltdown) but in all honesty there are just no realistic indicators that this will happen at the moment.

The ongoing (and predicted by me) reorganisation of banking is a good thing, and it will continue. Lehman's is just one example. There will be more. They might take the form of mergers, buy outs, bond underwriting.. who knows, but the upshot is adding strength to the sector.

Something else that I predicted will be financial 'products' the like of which we have not yet seen. Well, we have seen government backed soft loans, part ownership and there are more ideas waiting in the wings.

But the big one so far is an event from the weekend that has escaped most people. A $70bn money pool being formed by ten of the worlds largest banks (including Barclays). This is their own cash that provides additional liquidity of up to $23bn each.

Now, if they believed that there was imminent meltdown they wouldn't each be chucking their own money into a collective pot would they?

I'm currently buying and selling, if you want to give me the link to your house i'd be happy to have a critical look and tell you what i think. Pm me if you like.
Its possible we've seen it on RM already i could give you the reasons we haven't made an appt to see.

We have been on the maret for 6 months and not had a viewing, have reduced it 5000 to 119950. If you would have a look at our property it is on the winkworth site. 3 widdop close, sheffield 13.

I too am trying to sell but also had no views - and I had it valued by 3 agents with similar prices. The estate agent is suggesting I do a 5 % vendor deposit as they reckon that will draw in the first time buyers (i.e. on completion 5% of asking price goes to buyers mortgage deposit so they can get a lower percentage loan to value). Has anyone else tried that? did it get you viewings / or better still a buyer? 5% sounds a only little drop but that added to the estate agents cut means I get £9k less than my asking price at best.... Just wondering if other vendors have found it's a good idea? Seems just dropping prices doesn't always equal a sale, so thought it's worth trying something a bit different.

I have to move down south for a new job so just waiting for the market to improve sadly isn't a straight forward option for me.

I think this is something estate agents have thought up to keep their share of the sale value even though the seller is paying part of someones deposit.

If the price is dropped by 5% both the estate agent and seller loose money. But if you keep the same sale price and pay a 5% deposit to the buyer the estate agent takes a larger share of the sale because i suspect its calculated on the full sale price.

SupraSteve, I certainly didn't intend to patronise - my apologies if it sounded that way. :)
No offence taken, like I said - I think I know you better so I figured I'd read you wrong. :)

...Everyone has different circumstances and my version of affordability might be very different to yours even if we look similar on the surface.
Agreed.

...but I have always maintained that if you want somewhere to live then you should just go out and buy it. That holds as true today as it did a year ago. To suggest that I am 'in denial' is something of a misappropriation of my views.
That last bit was perhaps a little tongue-in-cheek on my part.
However, I certainly don't agree with your statement that if you are buying somewhere to live then get stuck in. Let's take an extreme example for discussion's sake; I bought the 'average house' for just under £200k (Halifax figures) 12 months ago, on a 25 year repayment mortgage at a nice round 5%. Now as you will no doubt know, in the part of a loan you are paying mostly interest and a smidge of capital, per payment. (And the opposite is true towards the end of the loan, of course.)
So, in my example, looking at the last year Excel's 'Loan Amortization' tells me I will have paid the bank £20,400 (12 x £1700) but only taken £4,126 off the amount I owe. I've chucked nearly £16k down the drain - I certainly don't match that by renting!
Now, in that time house prices fell on average by 12.8%. Let's be generous and say I was lucky and mine only dropped 10%. "It's in a nice area" ;).
So my house is now only 'worth' £180,000. Ok well I'm £20k down. Actually it's worse than that as if I'd put off my purchase and bought the average house today instead, My mortgage would be £20k less, which you can basically double by the time the loan is paid off - so £40k worse off! eek! OK, if you're in it for the long term "who cares"? I flipping do, long term or not, it's £40k! lol

Now look at the mortgage payments on the 'average' - £180,000 - house, 25years at 5%. £1052. Yes, nearly £650 a month better off. For 25 years!
Or, pay the same amount, £1700 - the mortgage is paid off 10 years earlier. For the following 15 years I'm £1700/month better off than if I'd bought just 1 year earlier.

It doesn't make sense to buy (at least not 12 months ago), whichever way you look at it.


To pick up your other remark above, how over-inflated do you think house prices currently are? The 30% most commentators reckon, the "up to 50%" Nationwide's boss recently spoke of, or another figure? :)


Mortgage funding in the UK is a little different to the US, but far too many people look at the US and assume that it is parallel. It is not.
I agree, but 2 quick points that link-in:
- UK banks bought a lot of the mess the USA is facing
- for the record we do have our own sub-prime, it was those with 100%-125% mortgages. Look at the defaults in those areas; and look back at how few it took to cause a scare regarding - and almost instantly kill off - Northern Rock (the biggest UK sub-prime lender).

For a start, a mortgage here stays with the owner, not the loan company...Because of this there is more pressure on both the owner and the lender to sit it out.
Agreed. But ultimately if you can't pay you can't pay and you will be repossessed; dont' forget we're looking at 45,000 properties this year alone! More property hits the market and more buyers are removed from the pool.

Next, the US slide has been dragged out over years. Ours has taken months.
Do you think we're at/near the bottom then? I see this taking another 18~30 months until we plateau. (I don't think the US are at the bottom either, but they are cloder to theirs than we are to ours). Many people say look at the US and that's where we're be in 6~9 months time. I'm not sure it's quite that simple, as you say there are some fundamental differences, but there are a lot of similarities too.

...The market grinds to a halt like hitting a brick wall.
It's not far off. Repeated attempts by UK government to "do something" only prolong the agony. It's frustrating, but politically I can see that they don't have much choice, not with a GE looming in the medium term.

However we should not make the mistake of assuming that people don't want to move or don't have the wherewithal to move. They simply are not moving until the picture becomes clearer.
Agreed. They are too scared they'll sell at a discount and then not see the same discount on the new property. Who can blame them in such a rapidly moving market.


Now there remains the huge caveat of the soup kitchen scenario (ie total economic meltdown) but in all honesty there are just no realistic indicators that this will happen at the moment.
I liked "at the moment" ;) I agree however. It's not tin hat time. (at least not yet ;))

The ongoing (and predicted by me) reorganisation of banking is a good thing, and it will continue. Lehman's is just one example. There will be more. They might take the form of mergers, buy outs, bond underwriting.. who knows, but the upshot is adding strength to the sector.
2 sides of the same coin; people will see banks going under left right and centre and I think although this will force a reorganisation (and rethink on sensible lending! ;)) it'll take a while for confidence to return. I suspect you think this whole process will happen quicker than I do?

Something else that I predicted will be financial 'products' the like of which we have not yet seen. Well, we have seen government backed soft loans, part ownership and there are more ideas waiting in the wings.
Fat lot of good they are. Encouraging someone to get into a falling market is almost criminal. Shared ownership rarely is and this should be discouraged at all costs IMHO. It's schemes like this that helped cause the over-inflated prices in the first place; they're part of the problem, not the solution.

But the big one so far is an event from the weekend that has escaped most people. A $70bn money pool being formed by ten of the worlds largest banks (including Barclays). This is their own cash that provides additional liquidity of up to $23bn each.
Call me a sceptic but that sounds very much like an insurance scheme for the first to fail, and a way of showing UK government/BoE "we're doing something".. sub-text: now can we have some more cash please? ;)

Cor, post of doom! :D
Sorry about that, I did trim as much as possible from the quotes!

We seem to be getting away from the facts of the matter.

Houses haven't actually dropped 30% or more.

It's just a bad time to sell.

Sit tight and wait for prices to rise.

Bedsit people please don't waste any more homeowners time with silly offers.

We'd never accept you in our neighbourhood anyway.

Your where you belong right now.

SupraSteve - cripes, what first! :D We're not far apart actually other than on the glass half empty or full stakes. I won't do it all because we'll be here all week on three posts.


Pecuniary 'loss': You can calculate what you like, but only the individual can asses the value to them. If you buy now and prices go up you have lost. If you buy now and interest rates triple in ten years you have lost as well. In the meantime where do you live, and how much do you want to subsidise somebody else's property rather than making your own home. It's a personal choice really.

Over-inflation: I didn't say that properties were overinflated, I said that I wasn't an advocate of over-inflation. The difference is subtle but clear. The market will ultimately decide as it is doing today. Real values (not forced prices) are static.

UK sub-prime: Yep it's there, but it is such a tiny tiny part of the market that we shouldn't get too excited.

Repossession: You shouldn't suggest that values materially affect repossession. Not being able to pay in 2008 is exactly the same as not being able to pay in 2006.

Bottom of the market: I don't have a reliable crystal ball but there are others that share the same view as myself - we're pretty much there with a slowdown in decline to be expected over the next six months or so. Easter, Easter, Easter, Easter.

Return of confidence: I have more than most and I'm closer to the sharp end than most, but then I'm also not prone to hysterics :hihi:

Purchase schemes: Caveat emptor, but not everyone wants or needs to to put their life on hold. If you want it, buy it, enjoy it and think of the day in 25 years when its all yours. If you wait two years you will be two years older when you own it and next to bugger all better off in real terms.

Liquidity Pool: There is probably more news around on it now than there was only a few hours ago. Check it out and be encouraged. It isn't a UK scheme, and it has nothing to do with government.



Cheers SupraSteve, it's really nice to have a grown up discussion about this. :)

We seem to be getting away from the facts of the matter.

Houses haven't actually dropped 30% or more.

Are you sure?
www.propertysnake.co.uk


Stick radio4 on NOW - an hour program about banks being fudged & what might happpen next is just starting. :)

We seem to be getting away from the facts of the matter.

Houses haven't actually dropped 30% or more.

It's just a bad time to sell.

Sit tight and wait for prices to rise.

Bedsit people please don't waste any more homeowners time with silly offers.

We'd never accept you in our neighbourhood anyway.

Your where you belong right now.


sorry mate, I'm a 'detached' person that sold up and put my money in the bank. I don't want to buy your house of you. I'll wait until it comes up for repossession.

and I won't give you any money when you are selling the Big Issue either.

SupraSteve - cripes, what first! :D We're not far apart actually other than on the glass half empty or full stakes. I won't do it all because we'll be here all week on three posts.
Good point, well made! lol

In the meantime where do you live, and how much do you want to subsidise somebody else's property rather than making your own home. It's a personal choice really.
True, true. However - "homeowners" rarely actually are, they are just renting 'their' house from the bank. ;)
I take your point about personal choice, but I stand by my comments and don't think there can be anyone out there who bought 12 months ago who wouldnt' have been in a much, much better position than if they'd waited till today.

Whether people thinking of buying today would be better waiting 12 months... who knows. I suspect this is one of the few places where we differ in opinion. We shall see who's right in a year I guess - I'm anxious (and slightly nervous!) for that time to pass now, after putting my views & predictions out into the open and you doing the same! :D I'm confident of my views, as you are of yours and I'm sure niether of us would gloat at the other when you turn out to be wrong -I mean when one of us is wrong. ;)


Over-inflation: I didn't say that properties were overinflated, I said that I wasn't an advocate of over-inflation. The difference is subtle but clear.
Cunning.
The market will ultimately decide as it is doing today. Real values (not forced prices) are static.
I don't think they are. Do you genuinely believe prices aren't falling? That the average price has been dragged down purely by forced sales?

UK sub-prime: Yep it's there, but it is such a tiny tiny part of the market that we shouldn't get too excited.
Tell Northern Rock that. And Bradford & Bingley, Alliance & Leicester.

Repossession: You shouldn't suggest that values materially affect repossession. Not being able to pay in 2008 is exactly the same as not being able to pay in 2006.
Not sure what you meant there, but a big flooding of cheap property, and an equally sized number of pepler burned by being a "homeowner", will have an impact. IIRC 16,000 people were repossed in the peak 12 months of the 1990's crash - what's happening now is huge in comparison (as, of course, are the reported falls).

Bottom of the market: I don't have a reliable crystal ball but there are others that share the same view as myself - we're pretty much there with a slowdown in decline to be expected over the next six months or so. Easter, Easter, Easter, Easter.
Stop me if I'm putting words into your mouth, but I sense you feel Easter might be the bottom?? :hihi: JASON (July, Aug.... November) are normally the best months for EAs. Look how bad they are presently. I can't see things picking up that quickly and 'out of season'.

Return of confidence: I have more than most and I'm closer to the sharp end than most, but then I'm also not prone to hysterics
Me neither. I think I'm very well informed and have a solid foot on the ground, (so far I've been right about the last 12 months) but - tis true - only time will tell. :)

Purchase schemes: Caveat emptor, but not everyone wants or needs to to put their life on hold.My life isn't on hold - quite the opposite, renting gives me such incredible freedom! :)

Liquidity Pool: There is probably more news around on it now than there was only a few hours ago.
Liquidity isn't the problem, and increasing it won't help (http://http://www.reuters.com/article/reutersEdge/idUSN1358253120080913?pageNumber=1&virtualBrandChannel=0).

Since the credit crisis mushroomed in August 2007, the Fed has poured cash into frozen financial markets, created lending facilities to tide over firms in need of emergency funding, and lowered its federal funds rate by 3.25 percentage points.

None of that saved Lehman Brothers from its current predicament. The few remaining measures that are available to the Fed may not be very effective in settling markets either if Lehman cannot find a buyer.

The central bank would undoubtedly offer assurances that it stood ready to provide liquidity to financial markets but that is not the issue afflicting markets.

"We have tons of liquidity, but the problem is that some of the financial pipelines in credit markets are clogged and velocity has slowed down," said Sung Won Sohn, an economics professor at California State University.
ok so it's USA not UK, but it's a same order solution WRT banks failing & what might/might not help them survive.

Cheers SupraSteve, it's really nice to have a grown up discussion about this.
Same! :thumbsup:

On the issue of renting/buying, it's misrepresenting it to talk about paying or subsidising someone elses mortgage. Treat it like a business decision, if it makes sense financially to rent, either for a time or for your entire lifetime, then do so. You can make some calculations easily enough, obviously you can't accurately predict future interest rates, or how the rental market will change, but you can make sensible estimates.
I think it works out better to buy, but you wouldn't whilst the market is falling, as soon as possible after it bottoms would be when you wanted to, although judging that is also not as easy as it sounds.

This is getting very deep.

At the end of the day it is a desicion for each individual to decide wether to buy or rent. I personally would never go back to renting. You never feel it is truely your home. Owning your own home (often with a bank) is a feeling only those who have done it know.

We had our house valued by the bank yesterday to see how much equity we had and we were very suprised at the outcome. Not only had the value risen since we last had it valued last year but it had risen by at least 5%. Not bad in a falling market. And not bad when it was the bank that commisioned the valuation for their own purposes.

Again, I'll not take every point if only for the sake of our sanity and eyesight :D True, true. However - "homeowners" rarely actually are, they are just renting 'their' house from the bank. ;)
I take your point about personal choice, but I stand by my comments and don't think there can be anyone out there who bought 12 months ago who wouldnt' have been in a much, much better position than if they'd waited till today.A detail point but an important one - a mortgage is a loan that is secured on the property. The mortgagee is the legal owner and remains so until something happens in through the courts to change that. Courts don't give possession orders lightly, and certainly not on the whim of a lender.

Whether people thinking of buying today would be better waiting 12 months... who knows. I suspect this is one of the few places where we differ in opinion. We shall see who's right in a year I guess - I'm anxious (and slightly nervous!) for that time to pass now, after putting my views & predictions out into the open and you doing the same! :D I'm confident of my views, as you are of yours and I'm sure niether of us would gloat at the other when you turn out to be wrong -I mean when one of us is wrong. ;) We do differ here. I fundamentally believe that you should buy a home to live in it. If it is a business then you should treat it as such, along with the risks and rewards that go with it.

Let me just make a small comparison to see if I can change your mind. Think of homes like cars. Would you hold off buying a car for a year if you needed one? Do you fret that a car doesn't go up in value every day? If you were a trader would you expect to buy below the market to make a profit or would you expect the market to go up automatically in order for you to get a profit?

Not sure what you meant there, but a big flooding of cheap property, and an equally sized number of pepler burned by being a "homeowner", will have an impact. IIRC 16,000 people were repossed in the peak 12 months of the 1990's crash - what's happening now is huge in comparison (as, of course, are the reported falls).

Even now, there are no indicators that this will happen. The wider economy is what causes this, not house prices.

You're the wrong bloke to say this to, but 11 years of Labour and their pish poor financial regulation has to take the blame. ;)

We had our house valued by the bank yesterday to see how much equity we had and we were very suprised at the outcome. Not only had the value risen since we last had it valued last year but it had risen by at least 5%. Not bad in a falling market. And not bad when it was the bank that commisioned the valuation for their own purposes.

Yes, banks are very good at valuing houses. thats why we are having the credit crunch.

The market is the only true way to test the value of your house. I can guarantee you wouldn't get what the bank has valued it at.

Maybe try living in your house rather than getting it revalued all the time to see what notional profit you have made.

Yes, banks are very good at valuing houses. thats why we are having the credit crunch.

The market is the only true way to test the value of your house. I can guarantee you wouldn't get what the bank has valued it at.

Maybe try living in your house rather than getting it revalued all the time to see what notional profit you have made.

We had it revalued to borrow extra aginst it. As it happens our bank offered us a better deal on an unsecured loan so we didnt need to borrow from our mortgage provider.

This thread has decended into a massive discussion but has anyone heard back from the OP about where his/her house is?

if house prices revert to their levels circa 1987, just before the property boom of the late 80's, it is a far more true reflection of the value of property. The market is still far too over valued, I suggest its slashed by 50%

Y'see people chuck around these arbitrary numbers without having a clue what they mean.

It costs around £80k to build a new typical semi before land, funding, fees, or that horrible dirty profit that 'greedy property developers' apparently aren't allowed to earn. Just how are prices going to go to 1987 levels?

Let me just make a small comparison to see if I can change your mind. Think of homes like cars. Would you hold off buying a car for a year if you needed one? Do you fret that a car doesn't go up in value every day? If you were a trader would you expect to buy below the market to make a profit or would you expect the market to go up automatically in order for you to get a profit?
I can see what you're trying to get at. But you can't compare cars & houses.
I don't need to own a house (in fact I don't need to own a car but pretend I did for the commute or whatever). Cars rarely go up in value, whereas everyone knows "property always(!) goes up in the long term".
You wouldn't expect a car's value to rise, unless you are the teeny minority of people who are buy exotica with a huge wating list or a rare classic.
Cars also cost peanuts; I could bu an old banger with a month or twos savings (in fact I regularly do! :D) houses are generally several times your salary and take most of your working life to pay off; houses are a MUCH bigger financial decision and much more important to get right first time.


You're the wrong bloke to say this to, but 11 years of Labour and their pish poor financial regulation has to take the blame. ;)You know as much about my polictical preferences as my dad knows; i.e. precisesly none! ;) No further comment your honour. ;)

Y'see people chuck around these arbitrary numbers without having a clue what they mean.

It costs around £80k to build a new typical semi before land, funding, fees, or that horrible dirty profit that 'greedy property developers' apparently aren't allowed to earn. Just how are prices going to go to 1987 levels?
I read Barratt average cost to build, including land, is £47k. I think tha includes land purchse. I guess that includes flats too but they don't do many of those (?) and the lowering effect would be countered by all the detatched & bigger homes that they build.

Anyway it won't cost them that now; not with all the trades becoming more & more desperate for work (more supply & less demand = lower prices), and everyone writing their land bank values down. 30% to date and falling fast!

A property is only worth what someone is willing to pay for it; saying £80k is too cheap doesn't mean much when global fundamentals have moved so much.

We're out of greater fools I'm afraid, so there is only one way for prices to go from here. (I've been predicting this crash for a couple of years).

Simple economics. Lower prices means lower wages. You can't have it both ways.

Sweatshop Britain?

To sumarise my biggest points about the housing market and why I think it'll fall a long way yet:

Housing IS overvalued, and this is reported in the media so the public 'know' it now and will believe it even if Tony/etc think it's still "worth" more. Overvalued to the tune of 30%-50% depending on who you listen to.
There was false demand. People borrowing 125% LTV have all gone (and rightly so!). People borrowing 100% have all gone (there are no 100% mortgages any more, yay!). People lying on self-cert mortgages have all but gone. People borrowing 7x their salary have all gone. Until prices fall to affordable levels, next to no-one will BE ABLE to buy
Britain has had cheap credit for far too long and false "growth" as a result. Releasing equity left right & centre without a thought for how they'll pay off 1/4 million in their lifetimes and maxing out their many credit cards, HP, Buy Now Pay next Christmas etc etc etc. The banks have turned and it's time to start paying back what is owed further reducing people's affordability to buy stuff/service mortgages.
Banking reforms are coming, as mentioned. Also however, the banks have lost trillions of dollars over this, and will want to make more profit once things settle down to recoup some of it. We'll be paying for that whether we like it or not.


...continued.. (firewall limits)

.....carrying on from above...


Inflation & the cost of essentials; yet more strain on people's wallets.
Interest rates & LTV when remortgaging. Interest rates offered have risen, especially when the LTV ratio is poor and the bank has a larger risk. Negative/reduced equity will put many "homeowners" onto the Standard Variable Rates instead of the lovely 5% deal they got 2 years ago. This brings HUGE increases to their monthy premiums, leading to less spending power and in the worst cases...
Reposessions - think we've covered that a fair bit.
Most of the BTL sector is dead. Few products available, of those that remain LTV ratio has to be very strong. As a result; reduced demand from the amatuers/those who stretched themselves. No more buy house A, remortgage and use the equity as deposit on house B... (Extra note: A house of cards if ever I saw one!!)
Indicators - 1 quick & dirty example: auctions are seeing 50%-70% of their stock go unsold and auction houses half empty when just 18 months ago they were brimming. Of those that do sell, the average prices is 23% down on 12 months ago.
Sentiment. Never, ever underestimate sentiment. I did and prices rose more than I thought they could. Now the market has turned; it's an oil tanker, it takes aaaaaaaaaaages to change direction but once it has - and it has now - it'll go in that new direction for a long time to come!



EDIT - forgot falling land prices and building (labour) costs. Duh!
EDIT2 - and the emerging recession! Gah such a biggie too! I'm a muppet.
:)

Simple economics. Lower prices means lower wages. You can't have it both ways.
You've just repeated what I said. Cause/effect, effect/cause - whatever, Lower demand = more competition = lower wages = lower prices! :)

Sweatshop Britain?
No, just not excessive rip-off Britain. Since when did builders start being worth more than doctors?

This thread has decended into a massive discussion
I'd hardly call it decending! :P

Y'see people chuck around these arbitrary numbers without having a clue what they mean.

It costs around £80k to build a new typical semi before land, funding, fees, or that horrible dirty profit that 'greedy property developers' apparently aren't allowed to earn. Just how are prices going to go to 1987 levels?

How did they manage in 1987, has the price of bricks gone up by 200% since then? Or sand maybe?

Simple economics. Lower prices means lower wages. You can't have it both ways.

Sweatshop Britain?

That relationship doesn't exist. My pay is completely unrelated to house values and has been since I started working 8 years ago.
On the basis of pay and house values being linked, my parents first house cost them about £1000, so they should now be earning 6 figure salaries each. (They aren't).

Are we toast yet?

AIG has ‘a day’ to stay afloat
http://www.ft.com/cms/s/0/271257f2-83f1-11dd-bf00-000077b07658.html

AIG-backed ETF Securities products plummet
http://www.citywire.co.uk/adviser/-/news/market-and-shares/content.aspx?ID=314454
Among the worst-hit products are ETFS Livestock, which has plunged 81.06% since yesterday's close, while ETFS precious metals and ETFS petroleum have dropped 50.68% and 51.01% respectively.

:eek:

Every market has taken a hammering in the last few days, the average seems to be around 5% dropped. It's largely a notional value anyway, but it's an indicator of general confidence.

I wonder if AIG will find a white knight. I don't think so, I think that Barclays and BoA pulled out of the Lehams rescue because they could cherry pick assets from the receivers cheaper than they could buy the whole thing.

1 day to get $75Billion! They're screwed.
It's the knock-on effects I'm VERY concerned about.

Overnight $LIBOR rates.... lol:

http://ftalphaville.ft.com/lib/inc/getfile/1997.png

Sorry Tony, I don't think the money markets will free up any time soon!

An easy mistake; to extrapolate a single event into an entire world economy.


I do hope you aren't forgetting about the soup kitchen.

An easy mistake; to extrapolate a single event into an entire world economy.


I do hope you aren't forgetting about the soup kitchen.
Oooh hangbags! What was that for?!

A few weks ago i put my house up for sale. It is in Crookes and it has appeared in the property Guide twice now. The estate agents, Haybrooks appeared to have done a really good job, having taken some good photos, given it an excellent discription and priced it, i think realistically, considering todays market.
Despite all this i havnt had one enquiry. I knew the market was bad but didn't realise it was so bad.
just wondered if any other sellers were experiencing the same.

I have 2 properties on the market at present 1 is sold at a £27,000 loss
It Was a 2007 new build And had been on the market for nearly 10 months before it sold
The other one is waiting to go through auction been on a year and looking at losing around 15 to 20k on that too in auction

AIG have been bailed out by the BOA overnight. Where does that leave us. Well licking our wounds and hoping for better luck this side of the channel. Its suprising how many banks are linked to AIG. Anyone with any debt is linked in some way shape or form.

AIG have been bailed out by the BOA overnight. Where does that leave us. Well licking our wounds and hoping for better luck this side of the channel. Its suprising how many banks are linked to AIG. Anyone with any debt is linked in some way shape or form.
Hi Phylis! :wave:

You just raised a wry smile on my face. You realise the contradiction in your own statement, I assume? UK residents are £1.44Trillion in debt (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3579142.ece) (with £225Billion of that on credit cards alone!). EDIT - and didn't I read recently that you are about to MEW?! (Mortgage Equity Release)

P.S. It's not the BOA that have loaned AIG the money, it's the Federal Reserve.

I have 2 properties on the market at present 1 is sold at a £27,000 loss
It Was a 2007 new build And had been on the market for nearly 10 months before it sold
The other one is waiting to go through auction been on a year and looking at losing around 15 to 20k on that too in auction
Thanks for being so open FUTO. Unlucky timing. I hope you did better elsewhere and that this won't sting too much. :(

Oooh hangbags! What was that for?!Apologies if that comment appeared sarky, it wasn't intended. [Note to self: don't post after a couple of post work beers]



FUTO, were you living in these properties or anticipating selling on at a profit on completion? I certainly don't want to become personally critical, but I would be professionally interested in your views on that kind of housing market activity, especially if you have 20/20 vision arising from hindsight.

I've just heard that Lloyds are likely to buy HBOS (http://www.bbc.co.uk/blogs/thereporters/robertpeston). Watching the headlines yesterday I figured HBOS was doomed in todays tradings; the general public got a wake up call as to their condition. Currently trading at 130p, up from 88p earlier today! I suspect that's on the back of these takeover talks.

Not about to MEW, i have taken a personal loan instead with HBOS as it happens. Rang them this morning to check all is well and they say that they have no financial problems and it is rumours on the stock markets.

Not about to MEW, i have taken a personal loan instead with HBOS as it happens. Rang them this morning to check all is well and they say that they have no financial problems and it is rumours on the stock markets.

wow - did you speak to the boss himself?

or do the people on the phones get involved with merger discussions with Lloyds TSB? What a democratic organisation.

its interesting that you can get a better rate on a loan than on a mortgage equity release. No surprise the housing market is crashing!!

Not about to MEW, i have taken a personal loan instead with HBOS as it happens.
Sorry I wasn't prying. TBH it's probably for the best that you're keeping the loan seperate from your home's value, it'll make remortgaging time a lot less stressful.

Rang them this morning to check all is well and they say that they have no financial problems...
Um, what else would they say?
...and it is rumours on the stock markets.
Rumours made the price go back up, without those they are up poop creek.

...but I would be professionally interested in your views on that kind of housing market activity, especially if you have 20/20 vision arising from hindsight.

Here is a bit of insight for what it's worth Tony - a fair few Brummy houses that went to auction today, most were unsold (http://www.nowinnofeesolicitorsuk.co.uk/hpc/test/readData.php?mode=a&id=11373) (lots with zero bids). Of the handful that did sell, prices were down between 8% and 69% on their recent purchase price.

SupraSteve, I don't want to bring the tone of the thread down and I don't want to be too disparaging of your enthusiasm, but you really are making a number of fundamental errors in your assessments and supporting evidence. It's well trodden ground that I don't have the energy to go through yet again.


(absolutely on offence intended in the above)

SupraSteve, I don't want to bring the tone of the thread down and I don't want to be too disparaging of your enthusiasm, but you really are making a number of fundamental errors in your assessments and supporting evidence. It's well trodden ground that I don't have the energy to go through yet again.
OK, anyone else want to step in? :)

Tony, I do respect you but think you're very wrong in your expectations for the market and find your comments somewhat tiring. It's a shame you don't want to continue a conversation we were both enjoying just 48 hours ago. :(

I've posted my reasoning - 12 whole points in fact! Points which I would say are more than being proven as sound - and have also even checked back through house price threads for yours so you don't waste energy on the likes of me(!); but only "I'm closer to the market than most" crops up as a recurring theme. I'm sorry, but that means absolutely nothing. You may have a property 'portfolio' (I don't know the full extent of it nor should I), but it doesn't make you an expert or mean you're any better connected than me. How is Richard Branson by the way; still dead? ;) Sorry, a cheap jibe perhaps but one that was too hard to resist.

You have to admit though, you've made predictions - which to be fair haven't been completely dismissed yet - but that do look like they are on very shakey ground. We agree on the banking reform and the like, (as you admit it's really just house prices where we differ), but no material change in house prices +12 months from April (http://www.sheffieldforum.co.uk/showpost.php?p=3351678&postcount=46), and prices will be back up (http://www.sheffieldforum.co.uk/showpost.php?p=3563971&postcount=174) and lending will be easier in the near future...LIBOR is softening (http://www.sheffieldforum.co.uk/showpost.php?p=3566350&postcount=181)?!


I see little by the way of explaination for your views, and as you're not keen to divulge them there is little mileage in our conversation so I shall wish you well with your investments and leave our discussion there.

I'm not sure what point is at stake her, but here's my full 'prediction' from April 08

Short of a world war or the Russians going mad I'm going to stick my neck out here with something of a prediction.

No material change in the next twelve months. +/- 5%
Likely merger of two or more of the larger institutions.
New mortgage products the like of which we have not yet seen.
Steady price growth to be seen again by Easter of 2009.

On the face of it I have 50% absolutely bang on.
The other 50% will remain to be seen but I'm not doing badly so far am I? ;)

The evidence is that house prices aren't really changing, but that there are distress sales going through because volume is <10% of what it was a few months ago. The causal effect of that is clear.

Prices will be back up. As sure as eggs are eggs.

Lending is getting easier.

LIBOR is softening.
Here are the current, last months and last years rates:
Bond Buyer's 20 bond index 4.54 4.67 4.46
FNMA 30 yr Mtg Com del 60 days 5.32 6.33 6.27
1 Month LIBOR Rate 2.75 2.47 5.50
3 Month LIBOR Rate 2.88 2.89 5.59
6 Month LIBOR Rate 3.02 3.13 5.42
Call Money 3.75 3.75 6.50
1 Year LIBOR Rate 3.13 3.26 5.12



I'm not betting on any of the above changing one way or the other, but so far my strike rate seems pretty good.

On the face of it I have 50% absolutely bang on.
The other 50% will remain to be seen but I'm not doing badly so far am I? ;)

I do admit and did say you're not wrong (yet ;)). Your predictions are/strike rate is no better than mine however, although mine weren't posted here* so you'll have to take my word for it. ;)

* = partially this is your 'fault' :D. You stepped down as a mod and started posting thread after thread after thread of garbage, to make a point I hope! ;)) Both you & JoeP were greatly admired by me for your work round here, with you both seemingly sensing the forum was becoming 99% drivel and 1% interest, I also figured a period away was a dammed good idea.

The evidence is that house prices aren't really changing... -Now come on you can't honestly believe that! I know you are better informed than that and aren't the type to be blinkered, however entangled in the game you may be. Where does the figure of 12.8% average price fall down come from then? I assure you good sir, it isn't a statistical anomaly cause by the record low volumes of sales! Why are non-forced sales being reduced in price (www.propertysnake.co.uk) if this were the case? Why would house builders stop, if they can still sell for the prices they're used to seeing (or at least reckon will soon be able to)?

It's fine to dismiss my views perhaps, but why do you disagree with the likes of mortgage giants & leading edge that of Nationwide (50% down from peak) HBOS (20% down from peak this year alone) plus almost every ecomomic commentator going? (EDIT - these guys are all falling more in line with what I was saying 18 months ago, before any real sign that the market might turn.)

, but that there are distress sales going through because volume is <10% of what it was a few months ago. The causal effect of that is clear.

Prices will be back up. As sure as eggs are eggs.
Please show me how this casual effect is "clear"; do you have a source saying this is all a very temporary phase of disturbance, because I have plenty saying it isn't?

BTW, how can they go "back up" if they haven't really changed? ;)



Prices will go up or down and one of us will be right. At this point I virtually shake your hand and suggest we compare notes further down the line - Easter ish was your benchmark for prices to be back to 'normal' (i.e. peak prices & still climbing I assume?). For the reasons I stated earlier in this thread I see a much slower, much more drawn out affair, with prices falling for at LEAST 18 months more from now, a gradual bottoming (a minimum 30% down from Aug 07 peak, perhaps an overcorrection to the long term trend as is common at the tail end of a big crash - perhaps seeing prices fall as much as 50%) and an eventual, turn back into a rising market no sooner than 3 years, most likely 5 years, but quite possibly even further from now.

Oh, and for the record I too have a foot in the BTL camp, (and regularly deal in shares too, for that matter) so I'm not biased, "just realistic"!

My cards are now firmly on the table next to yours! :D

[EDIT - the LIBOR rates you quote don't seem to match with these (http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=141&a=11948), but then they are 7 days delayed. Still, the changes are nothing to shout about and I can't see them coming down much in the near future, not with all the genuine uncertainty in the banking world right now.]

Again, all the best with your activities, I hope you wish me well with mine; I'll let you know when I buy my first place, expect to wait 2~3 years to hear from me though! :)

I've just heard that Lloyds are likely to buy HBOS (http://www.bbc.co.uk/blogs/thereporters/robertpeston). Watching the headlines yesterday I figured HBOS was doomed in todays tradings; the general public got a wake up call as to their condition. Currently trading at 130p, up from 88p earlier today! I suspect that's on the back of these takeover talks.
Their condition seems to be surprisingly healthy, short selling appears to be what is driving down the share price.

The key disagreement between Tony and myself at least seems to be on the fact that house prices have dropped.
I say that the current prices they are selling at, and they are selling albeit in low volumes, is a true price, Tony says not.

I'm not sure what criteria you can apply to value something other than the price it is actually changing hands for on the open market.

No material change in the next twelve months. +/- 5%
Likely merger of two or more of the larger institutions.
New mortgage products the like of which we have not yet seen.
Steady price growth to be seen again by Easter of 2009.


Point 1 - you are the ONLY person in the world who believes this.
Point 2 - its a shame you didn't say takeovers forced by the Government/central banks rather than mergers in a traditional way.
Point 3 - do you mean higher loan to values and mortgage rates way over the base rate? Then I agree, you are right. Please don't say shared ownership because thats nothing new.
Point 4 - can't fault you on that, you aren't wrong.....yet.

I don't think that high LTV mortgages will be coming back. Certainly not ones >95 or 100 %. There may even end up being legislation to limit the maximum LTV that's allowed.

now that Lloyds control High Street banking, their lending practices will become the norm. So lending will become more restricted and mortgages harder to get.

the effect on house prices..................???????

now that Lloyds control High Street banking, their lending practices will become the norm. So lending will become more restricted and mortgages harder to get.

the effect on house prices..................???????

Whos to say that will be the case. HBOS hold the mortgage market at a 20% share. Thats one in every five. They must be doing something right.

Whos to say that will be the case. HBOS hold the mortgage market at a 20% share. Thats one in every five. They must be doing something right.

would you say the same about Northern Rock. They had a healthy share of the mortgage market too and ended up in similar dire straights as HBOS.

anyone can lend money at stupid rates and get lots of business, but its another thing when it destroys your business.

Whos to say that will be the case. HBOS hold the mortgage market at a 20% share. Thats one in every five. They must be doing something right.
I'm sorry Phylis but numbercrunch is right. Lloyds were in a strong position and able to merge (takeover in this instance) with the supposedly 2.5 times bigger HBOS (if you look at mortgage lending figures - your metric) because they had more sensible lending practices and as a result have HALF the number of mortgage defaulters right now. This spells just 1 view of the future - Lloyds were right, others were wrong, more stringent lending & investment practices will be the way forward.

People are still making the same mistake about the UK's medium term future; that the money markets will return to the way they were. It's simple impossible, and the future looks very different, thank goodness!

HBOS took similar risks to Northern Rock, and are now paying the price. Quite why they failed ahead of even weaker banks such as Alliance & Leicester and Bradford & Bingley is a subject up for discussion & interpretation, but one thing is for sure; they aren't far behind and could just was easily fail* or get snapped up for bargain basement prices.

* = they'd probably be allowed to fail, too - they're not as key to the UK & UK population as HBOS was.



EDIT - with reagrd to the subject of whether HBOS' lending practices are/aren't likely to change, please now see the post immediately below, no need to take my/numbercruch's word for it.

HBOS - Lloyds TSB merger likely to push up mortgage rates
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/18/bcnmortgages118.xml


LIBOR up...
Three month Libor (the London Interbank Offered Rate), which is used to price many mortgages, climbed to 5.87 per cent, up from 5.71 per cent at the start of the week.


HBOS' silly lending practices out of the window...
Lloyds TSB has a reputation for being the most conservative of high street lenders – one of the reasons why it is in a strong enough position to be able to make an offer for HBOS.

It has avoided lending to high risk customers, or being involved in the buy-to-let market, and it is unlikely to let Halifax continue extending mortgages to any high risk customer.

"Customers with big deposits and good credit histories will probably have little to worry about, but customers without those benefits could really lose out" said Ms Cumming.and
...the HBOS group...was still lending to people with just a 5 per cent deposit


Care to comment, anyone? It was said that my reasoning was flawed, yet my predictions are happening at warp speed in front of our every eyes.

But Supra Steve, HBOS was a success thats why they had 20% of the mortgage market.

In 'Phylis' world, HBOS have actually taken over Lloyds TSB.

In 'Tony' world, mortgages are getting cheaper and house prices are going to start rising again soon.

P and T have been encouraging people to buy on this forum for the last year. They have been on every thread with any mention of prices falling and now not being the time to buy.

How can they sleep at night..........?

I know your question was rhetorical, but I'll answer anyway. ;)

Phylis I feel is simply misguided (I expect a flaming for saying that). She borrowed 105% from NR to buy a property for £85k 6 months before the peak in a not-nice area of Sheffield where 'car crime is acceptable, you have to bolt everything down, there are druggies wandering about and you have to know who to avoid but apart from that it's lovely (http://www.sheffieldforum.co.uk/showthread.php?t=186704)'.

Fast forward 18 months and a similar house up the road (http://www.rightmove.co.uk/viewdetails-20859662.rsp?pa_n=1&tr_t=buy&mam_disp=true) (except it has a bigger back garden) has sold STC for £80k and TBH it and the gardens look to be in as good a condition as possible and very recently refurbished to a very high standard. Her house is still "worth" £105k though, of course. Prices would have to drop 20% for her to be in negative equity (http://www.sheffieldforum.co.uk/showthread.php?p=3637006#post3637006), which no one is talking about being remotely possible...are they. :suspect:
Even if that does happen (just a further 7.3% away), she'll get by because of course someone will offer her a mortgage, won't they?

Just remember, it's better to buy whenever (http://www.sheffieldforum.co.uk/showthread.php?t=334190&page=2) (and also here (http://www.sheffieldforum.co.uk/showthread.php?p=4010717), but this is my fave (http://www.sheffieldforum.co.uk/showpost.php?p=3272269&postcount=4) ;)) than to put some thought into it! (http://www.sheffieldforum.co.uk/showpost.php?p=4059320&postcount=89) :rolleyes:

Continued...

Tony, I'm not so sure about. He's a very bright chap so is either amazingly blinkered due to his vested interest in property going up, or is deliberately trying to manipulate the market and knowingly flog property at ever inflated prices to even 'greater fools'. One option is naive, the other quite unattractive which is why I'm struggling to accept either possibility; Tony is someone I respect.

IIRC I have never met him but would like to. I would like to imagine - despite his obvious distain for my views on the property & financial markets and likewise the home & global economy - that we are peers and would actually get on well down the pub! :bigsmile:
One thing I'm pretty sure of, he's not posting here any more because he doesn't want this thread bumping-up and people's attention being drawn to it, the views within, and the inablility to disprove/argue against what I've said; whether it's true or not, the more people who believe what I've summarised, the quicker prices will drop; which he wants to avoid/deny at all costs.

I do not wish ill on either of the above, quite the opposite in fact, but I'm just saying what I see. I've said I like & respect Tony, and Phylis likes cars so she's a good egg in my book, too. (I shall still don my flame-proof suit just in case! ;))


Everyone else seems to see and have started to understand what is really going on. Who could miss it with the multiple recent history-making activities! :hihi:

Anyway, what do I know. :rolleyes:

Ah so all is well in your world today supra.

Lets back track shall we.

I took out a 90k loan on an 85k property. This same house was valued by the mortgage valuer at 107k on Monday. So yes i am still well ahead on the negative equity front.


HBOS is still above the water and has only become in trouble due to the huge volume of shares sold this week resulting in huge losses on the stock market. HBOS is the biggest mortgage lender in the UK, not all of their loans are bad credit loans. Every bank in the world is currently exposed to default loans. The takeover by TSB will put both banks in a better financial position.

Tony, I'm not so sure about. He's a very bright chap so is either amazingly blinkered due to his vested interest in property going up, or is deliberately trying to manipulate the market and knowingly flog property at ever inflated prices to even 'greater fools'. One option is naive, the other quite unattractive which is why I'm struggling to accept either possibility; Tony is someone I respect.

IIRC I have never met him but would like to. I would like to image - despite his obvious distain for my views on the property & financial markets and likewise the home & global economy - that we are peers and would actually get on well down the pub! :bigsmile:
One thing I'm pretty sure of, he's not posting here any more because he doesn't want this thread bumping-up and people's attention being drawn to it, the views within, and the inablility to disprove/argue against what I've said; whether it's true or not, the more people who believe what I've summarised, the quicker prices will drop; which he wants to avoid/deny at all costs.

I do not wish ill on either of the above, quite the opposite in fact, but I'm just saying what I see. I've said I like & respect Tony, and Phylis likes cars so she's a good egg in my book, too. (I shall still don my flame-proof suit just in case! ;))


Everyone else seems to see and have started to understand what is really going on. Who could miss it with the multiple recent history-making activities! :hihi:

Anyway, what do I know. :rolleyes:


Steve,

I don't claim to have all the answers, but I think there are other possibilities. There is so much emphasis on the bad things happening now, that its not easy to think in any other way. The same was true 18 months ago....few people thought prices would go down like this...I certainly didn't. What Tony, and some others, are looking at, is other underlying influences....such as the low build rate currently, which cannot be quickly increased. The longer term housing need in this country is still not being met by most projections. Are we sowing the seeds for the next housing boom now? Some people think we are.

I'm still unsure what is going on by the way, but the events of this last week are not the only thing having an effect.

Ah so all is well in your world today supra.
It is and it isn't. I know this will probably infuriate you, but you seem to have your heart in eth right place and seem to be a nice person so I do genuinely feel sorry for you. For a start your maths is wrong (see below) but you've also got your head in the sand.

I took out a 90k loan on an 85k property. This same house was valued by the mortgage valuer at 107k on Monday. So yes i am still well ahead on the negative equity front.
Can you explain to me why your house over a third more (£27k more) than the similar one just a few doors down? Why would I buy your house for £107k when I could have that one for so much less?

Let's say it is anyway.
You thought you had a 20% buffer, it's not I'm afraid.
£107k -15% = £90k.
We're at a national drop of almost 13% already. 1-2 months time you're in negative equity. So what you cry, keep paying the bills and you won't get repossessed. True. But when you come to renew your mortgage, I'm afraid you'll not find things quite so simple; there won't be any 105% (LTV) mortgages. There won't be any 95% mortgages!

HBOS is still above the water and has only become in trouble due to the huge volume of shares sold this week resulting in huge losses on the stock market. HBOS is the biggest mortgage lender in the UK, not all of their loans are bad credit loans. Every bank in the world is currently exposed to default loans. The takeover by TSB will put both banks in a better financial position.
So why could Lloyds buy HBOS, if HBOS were so sucessful and strong - and according to your metric of mortgage share 2.5 times BIGGER than Lloyds? Please explain it to me, I clearly know less than you.

Lloyds are indeed exposed to default loans, but only HALF the number that HBOS were facing, which WAS what killed them off. Short selling - if indeed it happened - merely sped it up. The combined bank (almost a shotgun wedding with the government pushing it through) is in a better position, I agree - but the alternative was HBOS went to the wall. If that is your definition of "strong" I do have to wonder what is going on in your head.

I don't claim to have all the answers, but I think there are other possibilities. There is so much emphasis on the bad things happening now, that its not easy to think in any other way. The same was true 18 months ago....few people thought prices would go down like this...I certainly didn't. What Tony, and some others, are looking at, is other underlying influences....such as the low build rate currently, which cannot be quickly increased.
Aha, the percieved low housing supply, high housing demand.
It's simply not true Tomataheed; and besides, as I've said, the demand was false (e.g. >100% mortages, borrowing 4~5~6~7(!) times salary, amatuer BTL...) and the future borrowing won't look anything like it did 18 months ago.

Easy to say yet impossible to prove, but I did see this coming - and I'm not basing my future thoughts on the fact that it is happening, I've said the same for a long time now; based entirely on every economy and housing market associated factor my little brain can take in.

My property-buying mates laughed at me when I suggested the future house price market wasn't as rosey as they'd hoped, even my dad thinks I'm mad (whereas I know he is ;)), but I'm being shown to be correct and in recent months I've started being asked for advice. I'm VERY close to what's going on, I can only state that, not assure you of anything, but I have put all my thinking on paper (in my earlier post) so to speak, so time will tell if the future continues to unfold inline with my thoughts as it has to date, or if I'm wrong; but it's there for all to see.

Aha, the percieved low housing supply, high housing demand.
It's simply not true Tomataheed; and besides, as I've said, the demand was false (e.g. >100% mortages, borrowing 4~5~6~7(!) times salary, amatuer BTL...) and the future borrowing won't look anything like it did 18 months ago.

Easy to say yet impossible to prove, but I did see this coming - and I'm not basing my future thoughts on the fact that it is happening, I've said the same for a long time now; based entirely on every economy and housing market associated factor my little brain can take in.

My property-buying mates laughed at me when I suggested the future house price market wasn't as rosey as they'd hoped, even my dad thinks I'm mad (whereas I know he is ;)), but I'm being shown to be correct. I'm VERY close to what's going on, I can only state that, not assure you of anything, but I have put all my thinking on paper (in my earlier post) so to speak, so time will tell if the future continues to unfold inline with my thoughts as it has to date, or if I'm wrong; but it's there for all to see.

Do you not think that the additional 5-6 million people living here over the next 5-15 years will need somewhere to live? I'm surprised with a lot of what's happened over the last few months, but that doesn't mean that house prices will go down another 30%....they might do, but my view is that they won't. I am however, coming round to the idea that this oil tanker will take longer to turn around. I was anticipating better news next year, but its looking like it will take longer.

I would like to sell a house, but its not worth it at the moment. I'm renting it out, and waiting. Anyone that can wait, is waiting.

What's interesting about this crisis, is that previous economic troubles like this were caused by a bad economy causing trouble in the finance sector. This time it looks like the banks screwed up first causing all the trouble. As such, its a difficult one to predict.

Meanwhile, the company I work for has announced 24,000 redundancies thanks to HP buying us, so I've got bigger issues potentially !

Do you not think that the additional 5-6 million people living here over the next 5-15 years will need somewhere to live?


sorry, but where are these 5-6mn people going to come from?

the Eastern Europeans are starting to leave as their job prospects here worsen (have you heard about unemployment rising?), the Euro strengthens against the pound (effectively a pay cut for them), and all the bankers in London that employed them to clean their toilets get made redundant and start to clean their own toilets again.

historically, all population estimates have been reactive and proved wrong in the long run. In the 60's they estimated there would be 75mn here by now.

Also, as the recession bites, the number of single person households will drop. People will have to share more.

What's interesting about this crisis, is that previous economic troubles like this were caused by a bad economy causing trouble in the finance sector. This time it looks like the banks screwed up first causing all the trouble. As such, its a difficult one to predict.

Not true of the 1930's (which most resembles now). That was also caused by profligate lending.

Sorry to hear that last point Tomata. :( I hope you aren't affected or if you are that you find something else soon.

What additional 5-6 million people are you talking about? If you mean migrant workers, you're aware that they are leaving for better paid jobs in their homeland, I'm sure.

We have ~830,000 empty properties in the UK right now. Of those, I believe (so take it with a pinch of salt as I could be wrong) about 300,000 are ready to move into (e.g. empty rental properties, houses remaining unsold but unoccupied... the rest are earmarked for development of some kind, or are in extremely undesirable locations so no-one wants to live there, but they could easily be 'revitalised' or whatever). Have a look around, I only live <1 mile from work and pass 4 empty - yet perfectly nice - houses on the way in.

You can be assured that the banks (investment and high street) have ballsed-up big time, and that HUGE changes will result once the dust has settled; people still do not understand that the future looks nothing like the past, so basing assumptions about the future on the past is foolhardy. The banks invented ways of getting round legislation to hide bad risks and as a result invented money that never really existed; that it never did is now being show to be the case, but it's such an incest orgy mish-mash that STILL no-one fully understands what debt and risk is lying with who – hence the massive changes in financial institution’s outlooks almost overnight.

Most people would have laughed if just 1 week ago they were told that HBOS shares would join the unenviable ‘90% club’ then be taken over, AIG would require $85Billion of Fed funding and Lehman brothers, operating for 165 years IIRC would be wiped out. But it's happened, and in just 3 days.

Lehman brothers owe Citibank $130Billion. Lehman are toast. That missing money will no doubt be owed to many financial institutions across the world and it isn't coming back - plus of course that impending write-down it's not been declared yet by any bank.

Expect many more bad news stories before things settle down.

It is and it isn't. I know this will probably infuriate you, but you seem to have your heart in eth right place and seem to be a nice person so I do genuinely feel sorry for you. For a start your maths is wrong (see below) but you've also got your head in the sand.


Can you explain to me why your house over a third more (£27k more) than the similar one just a few doors down? Why would I buy your house for £107k when I could have that one for so much less?

Let's say it is anyway.
You thought you had a 20% buffer, it's not I'm afraid.
£107k -15% = £90k.
We're at a national drop of almost 13% already. 1-2 months time you're in negative equity. So what you cry, keep paying the bills and you won't get repossessed. True. But when you come to renew your mortgage, I'm afraid you'll not find things quite so simple; there won't be any 105% (LTV) mortgages. There won't be any 95% mortgages!

How many things would you like me to tell you about our house. Lets see it has a large garage and two off road parking bays, a conservatory and landscaped gardens front side and rear. Refurbed through out to a high standard including new kitchen, bathroom, rewire etc. the list goes on.

And if we are on the subject of maths you may find that 107k - 15% is actually just short of 91k. The surveyor gave a value at which the property would sell in the current market as it was a survey was for the lender. As the value was taken on monday i doubt it has dropped 15% in three days.

Phylis at the end of the day, if you're happy and in a stable position then great, I am very happy for you. :) You are the exception to the rule however, if your house has gone up in value recently. As you say it's the market value so good on you. For the record though, that other house has all the refurbishment you have, so that isn't a differentiator. A conservatory and garage does not £27k make.

If you can sit back and think that the global economy stuff doesn't impact you, HBOS were victims of nasty traders but were otherwise a shining example of a mortgage company, house prices only ever go up, there is no wrong time to buy, etc etc etc - that's cool. Either way, you're not worried about your position and I'm not wrried about mine, so all is well. :)

In answer to the point you make about the future looking nothing like the past...we're agreeing...sort of. I'm saying it looks nothing like the present either. It looks like more banks are going to go, and it looks like prices of houses will continue to drop. Extrapolating out to say that houses will drop another 50% ( as some are saying, not you I don't think) is not realistic in my view. Prices then drop below the build cost, so no one builds...and then there is a supply problem...so prices go up. Its not going to be pretty, but it won't always be this way.

If i was worried about my financial position i wouldnt be taking on more debt. I have always looked after my money and i always will. I never take on more than i can comfortably afford and always plan ahead. Just because we live different lifes doesnt make either one of us right or wrong.

sorry, but where are these 5-6mn people going to come from?

the Eastern Europeans are starting to leave as their job prospects here worsen (have you heard about unemployment rising?), the Euro strengthens against the pound (effectively a pay cut for them), and all the bankers in London that employed them to clean their toilets get made redundant and start to clean their own toilets again.

historically, all population estimates have been reactive and proved wrong in the long run. In the 60's they estimated there would be 75mn here by now.

Also, as the recession bites, the number of single person households will drop. People will have to share more.

From abroad...from increased birthrates in certain segments of society...the population has gone up to 60 million from about 58 million in the last few years after being quite static for a while...hasn't it? . There still seem to be plans to concrete most of an area from Leighton Buzzard to Southend in a big fat arc...All I'm saying is that there are other things going on as well as the current crisis..

Just because we live different lifes doesnt make either one of us right or wrong.
Completely agree. I've said what I think and you've said what you think, only the future will show who wsa closer to the mark on the matters where we disagree.

As I say, I like you (you like cars! :D) and wish you & yours well. You seem to have your finances under control, as I think do I. It's a non-story! :)

Completely agree. I've said what I think and you've said what you think, only the future will show who wsa closer to the mark on the matters where we disagree.

As I say, I like you (you like cars! :D) and wish you & yours well. You seem to have your finances under control, as I think do I. It's a non-story! :)

At last we agree on something (if only the cars, its a start):D

...

What's interesting about this crisis, is that previous economic troubles like this were caused by a bad economy causing trouble in the finance sector. This time it looks like the banks screwed up first causing all the trouble...

That's how it's being spun but the reverse is true in reality.

By allowing banks to generate more and more liquidity by creating debt and then hiding it's nature in derivatives no-one understood, the Treasury here and more particularly in the US has been able to obscure problems with the economy.

It's like an injured footballer playing on with cortisone injections until the injury worsens enough to need proper medical attention. The injury isn't actually due to the cortisone although it played a part in the level of treatment eventually required.

First time poster so "Hi"

I would just like to add that in my opinion SupraSteve is entirely correct with his future predictions.

To back this up I would like to make a few points of my own.

Firstly unless you are a cash buyer a propertry is only worth as much money as the bank is prepared to lend you. Banks are now lending considerably less so as a direct result of this one "FACT" property will fall in value to meet this new lending standard.

Why have they stoped lending as much money?

over the last decade+ mortages have been made into investments and sold on to investors. This means that the banks didn't directly carry the "risk" of the mortgages on their books. As a result they started lending more and more money to people that couldn't afford to pay it back And because they did not hold the mortgages on their own books, considered this lending to be OK.

However this backfired completely because people started to default and now the banks are unable to create and sell any more of these investments because they are so crap no one will buy them.

This means that the banks now carry the risk of all new mortgage lending on thier own books, using their own money and all of a sudden the lending practices that we "OK" when they were selling the invesments to other people (including other banks and your pension funds) are not "OK" for themselves!!!

Lending will not be returning to what is was a year ago for a very long time. Housing is going to fall a long way.

A HOUSE IS ONLY WORTH WHAT A BANK IS PREPARED TO LEND YOU - THE BANKS ARE INSOLVENT.

A HOUSE IS ONLY WORTH WHAT A BANK IS PREPARED TO LEND YOU - THE BANKS ARE INSOLVENT.

Very good summary point there.

Hello & welcome :wave:

A little light relief ;)

http://roflrazzi.files.wordpress.com/2008/09/mr-t-i-pity-the-foo.jpg?w=451&h=617

Hi and thanks.

Most people are still in denile about what is about to happen to them.

I mean How much bad news do people need before they start thinking "****!! This is really bad".

The banks are going bankrupt, this is the worse financial crisis in over 60 years. It wont be OK next year, the year after or the year after that!!

If you see a light at the end of the tunnel......It's the front light of the frieght train thats about to run you over.

Check out this link for some decent information. It is by an American but does apply to the way are banking system works too.

w w w . chrismartenson.com/three_beliefs

If we're looking at US commentary, then this is a good background info article, too.
http://finance.yahoo.com/banking-budgeting/article/105782/How-We-Got-Here:-It's-Housing,-Stupid

Yes there are differences between UK & USA, but the same property bubble effect resulted (and is bursting) and our financial markets are so heavily linked they are almost one and the same.

Thanks for that.

I think people should look at what happened to Japan and their credit bubble. 10 years of deflation up to 90% off the value of some homes.

At least Japan had their exports & Savings to fall back on, what do we have...our financial services...opps.

our exports and manufacturing will probably do well as the pound weakens

our exports and manufacturing will probably do well as the pound weakens
What exports & manufacturing? That was the point.
(And if you can think of any, how much of their raw materials do they import?)

What exports & manufacturing? That was the point.
(And if you can think of any, how much of their raw materials do they import?)

I was surprised to hear on the radio the other day that the UK is still the 6th ( or 5th....can't remember ) biggest manufacturer in the world. I didn't think we made anything any more.

I'm sorry Phylis but numbercrunch is right. Lloyds were in a strong position and able to merge (takeover in this instance) with the supposedly 2.5 times bigger HBOS (if you look at mortgage lending figures - your metric) because they had more sensible lending practices and as a result have HALF the number of mortgage defaulters right now. This spells just 1 view of the future - Lloyds were right, others were wrong, more stringent lending & investment practices will be the way forward.

People are still making the same mistake about the UK's medium term future; that the money markets will return to the way they were. It's simple impossible, and the future looks very different, thank goodness!

HBOS took similar risks to Northern Rock, and are now paying the price. Quite why they failed ahead of even weaker banks such as Alliance & Leicester and Bradford & Bingley is a subject up for discussion & interpretation, but one thing is for sure; they aren't far behind and could just was easily fail* or get snapped up for bargain basement prices.

* = they'd probably be allowed to fail, too - they're not as key to the UK & UK population as HBOS was.



EDIT - with reagrd to the subject of whether HBOS' lending practices are/aren't likely to change, please now see the post immediately below, no need to take my/numbercruch's word for it.

HBOS had a perfectly healthy balance sheet and capitalisation. They've failed because of market manipulation.

Do you not think that the additional 5-6 million people living here over the next 5-15 years will need somewhere to live? I'm surprised with a lot of what's happened over the last few months, but that doesn't mean that house prices will go down another 30%....they might do, but my view is that they won't. I am however, coming round to the idea that this oil tanker will take longer to turn around. I was anticipating better news next year, but its looking like it will take longer.

I would like to sell a house, but its not worth it at the moment. I'm renting it out, and waiting. Anyone that can wait, is waiting.

What's interesting about this crisis, is that previous economic troubles like this were caused by a bad economy causing trouble in the finance sector. This time it looks like the banks screwed up first causing all the trouble. As such, its a difficult one to predict.

Meanwhile, the company I work for has announced 24,000 redundancies thanks to HP buying us, so I've got bigger issues potentially !

People obviously do want to live somewhere, but simply being here isn't sufficient to contribute to demand. In fact, wanting a house doesn't contribute to demand either.
You have to have the means to buy one to contribute to demand, and without a bank that will lend you the money, that means you are not part of the demand.
The change in loan criteria is a large part of what pushed this bubble, and the change back to conservative criteria is what's pushing the collapse, hastened by the credit crunch restricting lender even more and interest rates making it more expensive for those that can borrow.

HBOS had a perfectly healthy balance sheet and capitalisation. They've failed because of market manipulation.
Nice theory but not true Cyclone. You can't destroy a company by rumour-mongering alone. They were in the poop, a point proven by the fact the new LloydsTSB-HBOS 'superbank' is being doubted some sceptics; has IT in fact got enough reserve & good business to keep it going? Obviously the good standing of Lloyds was diluted somewhat when it paid £12Billion for the floundering HBOS, there are now concerns out there (I don't share them) the merged result will still find HBOS' troubles hard to deal with.

http://www.guardian.co.uk/business/2008/sep/18/lloydstsbgroup.firsttimebuyers
The deal was met with a cautious reception in the City. Lloyds TSB's shares fell 8% [actually 15% at close (http://uk.finance.yahoo.com/q/bc?s=LLOY.L&t=5d&l=off&z=l&q=l&c=)!] on concerns about the future capital strength of the combined bank and the realisation that future dividends may not be as generous. Lloyds intends to pay its final dividend in shares rather than cash to preserve capital.

EDIT - doesn't matter, removed it into a new post now.

HBOS had a perfectly healthy balance sheet and capitalisation. They've failed because of market manipulation.

Can someone explain this to me? If HBOS were in such a good position why didn't they just tell TSB to p*ss off?

Can someone explain this to me? If HBOS were in such a good position why didn't they just tell TSB to p*ss off?

Because they weren't. They had $120bn loan they had to refinance in the coming weeks. The cost of doing that in the current environment would have driven a huge hole in their finances.

Barclays has an equity ratio of 4.8%. Which is shockingly low, coupled with a number of writedowns and the cost of purchasing bits of Lehmans. I wouldn't be holding this stock tomorrow either.

Here is a good article (http://blogs.telegraph.co.uk/alex_singleton/blog/2008/09/18/short_selling_helped_promote_truth_about_hbos_and_ lehman_brothers) on why short-selling isn't the cause of HBOS' failure.

By betting on the price going down, short sellers were signalling publicly what they thought about HBOS's prospects. They understood HBOS's prospects and helped the rest of the market understand them. They helped us know about a problem earlier than we would otherwise have done. Is that such a bad thing?
Short selling will continue to be demonised, but we should be under no illusion that by curtailing it, the banking sector's problems would magically disappear. In fact, that could well slow down the recreation of stability and souder business models.

Here is a good article (http://blogs.telegraph.co.uk/alex_singleton/blog/2008/09/18/short_selling_helped_promote_truth_about_hbos_and_ lehman_brothers) on why short-selling isn't the cause of HBOS' failure.

There's a link in there to an article by the excellent Michael Lewis who says about those Wall Street CEOs,

"But interestingly, if any of these men had behaved well and resisted the pressures and temptations of the moment, his firm would have, for several years, dramatically underperformed the competition. Probably he would have lost his job.

Even O'Neal can probably look back on his performance and say to himself, ``There's nothing I'd do different, given what I knew at the time.'' "

Lloyds' chairman resisted being frivolous and has come out smelling of roses, but I the article has a good point and most people in similar positions globally would have been for the chop by the shareholders. I guess it's even better for those CEOs that got into the bad practices, as they'll have no doubt left with huge payouts. :rolleyes:

In answer to the Origional Posters question: "Is the Market that bad?"

Our monetary system requires the exponential growth in the creation of money just to operate normally.

All money is created through debt, i.e loans & mortages to us by banks and loans to the Government by the central bank. Please note that the banks and BOE are all private organisations.

All these loans carry an interest payment and as a result, At any one time there is never enough money in existence to pay back the money thats owed to the banks.

This means that we all have to get further into debt to service the existing debt.

If at any point we have mass defaults like we are seeing now, then the whole monetary system will collapse because it can only go one way.

So in answer to your question it is a resounding "Yes the Market really is that bad"

Our Goverments solution to this problem is to borrow more money from the central bank putting us further into debt with yet more interest payments. You'll hear it being described as "Pumped" or "Injected" but it really means "Futher into debt".

From this you can conclude 3 main points that affect the average person:

The whole system is a pyramid selling scheme enabling the transfer of wealth from those at the bottom to those at the top through interest payments.

At the same time all this new extra money that is being created devalues the existing money in circulation i.e your wages, Savings, Pensions and Investments. This is called inflation and you can see how much less your money is worth everytime the price of goods goes up to reflect all the new money that has been created.

Due to the fact that there is never enough money to pay back all the debt, debt is a form of bonded slavery.

... I guess it's even better for those CEOs that got into the bad practices, as they'll have no doubt left with huge payouts. :rolleyes:

Seems to be a common impression but to my mind they've been screwed more than anyone else. Any money they'll receive will be peanuts compared to what they would have expected and their outgoings will be massive. It wouldn't surprise me to see property values in The Hamptons go through the floor.

Seems to be a common impression but to my mind they've been screwed more than anyone else. Any money they'll receive will be peanuts compared to what they would have expected and their outgoings will be massive.
I'm constantly amazed how people earning £100k+++++ are still just 1~2 months wages away from not being able to pay their bills. Doesn't ANYONE live within their means? The $several Millions payouts the CEOs will get will help for a while, of course. I just hope their pensions & rewards weren't too heavily invested in banking shares & property.... oops.

It wouldn't surprise me to see property values in The Hamptons go through the floor.
You may have a point there (http://property.timesonline.co.uk/tol/life_and_style/property/buying_and_selling/article4778880.ece). Read the agents bit especially...

Thirty per cent of properties for sale have price reductions and there are five potential repossessions in Mayfair this year, which is unheard of.
You can now rent a flat in Chelsea for £450 a week that would have cost £1,200 a week last year. This is because we rely on City boys - and they aren't there any more.

P.S. Another article on short selling not being to blame (http://www.moneyweek.com/investments/stock-markets/short-sellers-didnt-cause-this-crisis-the-government-and-bankers-did-71329.aspx).

EDIT
P.P.S. And another (http://www.thisislondon.co.uk/standard/article-23557523-details/Only+a+fool+will+blame+us+short-sellers/article.do). Nice insight in that one.
“But look at it logically. We had this huge bubble of credit which was *engineered by the government. It suited Gordon Brown to have all this money around. It produced lots of taxes which he was able to use to finance political schemes. That bubble has now burst. Jobs are being lost. Not because I have shorted shares but because those *workers have been let down by policies that couldn't be sustained.”
“Only a fool would imagine short selling has any effect on these companies at all,” he said. “The rules here are quite clear. If you go around telling lies about a company to weaken its position because you are short selling, you are breaking the law and you can be *prosecuted. But if you tell the truth?” Cawkwell says getting to the truth about what is really happening in a company should be applauded, not legislated against.

“But look at it logically. We had this huge bubble of credit which was engineered by the government. It suited Gordon Brown to have all this money around. It produced lots of taxes which he was able to use to finance political schemes. That bubble has now burst. Jobs are being lost. Not because I have shorted shares but because those - workers have been let down by policies that couldn't be sustained.”

This is the truth of it but it's getting spun that it's all the fault of the evil bankers. And they say labour's spin machine is dead?

This is the truth of it but it's getting spun that it's all the fault of the evil bankers. And they say labour's spin machine is dead?
I agree, there isn't one person/organisation/government/governing body/country(!) that is accountable for the entire mess, it was a collusion between the lot because it suited them and the majority of the public didn't complain because they felt 'richer'.

People are waking up a little, at least they know what has happened, but the various media will undoubtedly spin it so it's someone's fault and the sheeple will believe them.

I agree, there isn't one person/organisation/government/governing body/country(!) that is accountable for the entire mess, it was a collusion between the lot because it suited them and the majority of the public didn't complain because they felt 'richer'.

People are waking up a little, at least they know what has happened, but the various media will undoubtedly spin it so it's someone's fault and the sheeple will believe them.

There are 2 reasons for linking to Robert Preston's blog on the BBC (http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/09/the_american_way_to_fail.html)

1. I thought this was an interesting quote, "The breathtaking rises in the price of bank shares this morning are symptomatic of a stock market that is bereft of reason and is being driven almost purely by hysteria and momentum."

2. If you look at the responses, there are a huge number that blame the banks and the banks alone. Either the board is being spammed by the Govt/Labour Party/Treasury/Vested-Interests or the sheeple still very much believe what they're being spun.

Short selling of financial institutions has been banned in the LSE for 120 days...

Not everyone agrees that this is actually a cause rather than a symptom
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/19/bcnshort119.xml

Certainly is exciting at the moment, in a stock brokers jumping from windows kinda way.

...or the sheeple still very much believe what they're being spun.

*DING* We have a winner!

"The fundamentals of the British economy are strong", etc etc. :rolleyes:


It is a very interesting time indeed chaps. All the normal rules are out of the window, the "hysteria" mentioned in the link/quote is a good description.

Well. I read this thread to see what the OP was going through as they have just put their house on the market and feel really sorry that no one has really addressed their problem but launched in to a debate about why this is happening and what the state of the housing market is in.

I will try to help.

Have you contacted the estate agent and got some feedback. There is a website that you can go on an get an estimated valuation, but I cant remember the name.
Also, have you thought about some open viewings.

Usually if a house isnt getting viewings it usually about the fact that it is either overpriced or the agents arent pushing it enough.
get on to the phone to them and ask what they have done to market it and if still no viewings it may be just overvalued though houses in Crookes usually go quickly as there is demand from the university lectureres and Doctors from the hospitals. I personally am not a fan of Haybrooks, I do prefer Blundells, the market leader.They are usually good at getting the value right.

I do prefer Blundells, the market leader.They are usually good at getting the value right.

I agree with you on that. They aren't afraid to tell people how it is ie. 'well fine put it on with Winkworth for 150k if you want, but if you WANT to sell it, we recommend 125k'

That is why they are the market leader - they pushed prices up during the boom and they know what they have yo do to stay in business during the crash.

The ONLY sold sign round our way (out of 30) is a Blundells one.

does anyone know of a website that tells you which agent has sold what houses and for how much below the asking price? Blundells gave me their speel of them having the most 'sold' signs up in Sheffield, tho in Hillsborough Reeds Rains seems to have more..... but I know from when people have moved, the agents do take AGES to remove their 'sold' signs - so of the ones that are up, how many have actually sold during this crash? or were they all sold before it?!

I like the idea of trying open viewings - worth a try! but starting to accept I'm most likely going to have to become a landlord so that I can go get myself a home in the midlands :-/ but might be best in the long run, if holding on to this house means I can sell it when the market is back up, and can buy another while the market is down....

Well. I read this thread to see what the OP was going through as they have just put their house on the market and feel really sorry that no one has really addressed their problem but launched in to a debate about why this is happening and what the state of the housing market is in.

I will try to help.

Have you contacted the estate agent and got some feedback. There is a website that you can go on an get an estimated valuation, but I cant remember the name.
Also, have you thought about some open viewings.

Usually if a house isnt getting viewings it usually about the fact that it is either overpriced or the agents arent pushing it enough.
get on to the phone to them and ask what they have done to market it and if still no viewings it may be just overvalued though houses in Crookes usually go quickly as there is demand from the university lectureres and Doctors from the hospitals. I personally am not a fan of Haybrooks, I do prefer Blundells, the market leader.They are usually good at getting the value right.

You are right, every property has a price that it will sell at. However now that the banks have restricted thier lending critera no one knows what this new price will be and that is why no one is viewing your property.

Just as an example: According the the Halifax report, property droped by 1.8% last month. Lets say you were a couple thinking of buying an average home with an IO mortgage: 25 years @ 6%. By holding out for this one month you have saved yourself £3000 on the price of the Property and a futher £4500 of interest not paid to the bank over the 25 years. That means in one month you just made £7500 by doing nothing!!

Now If you use the Halifax's Year on Year figure you would have saved yourself £76200 on a average home over the life of the mortgage by not buying a property in the last year. Thats a lot of money that could be spent on your family.

I rekon we have at least another 15% to go. If you are a buyer you don't have to do anything except "wait" to find out if this will be true or not. Every month that goes by and property drops you are making money tax free, for doing nothing.

Buying a property now would be like catching a falling knife.

I agree with you on that. They aren't afraid to tell people how it is ie. 'well fine put it on with Winkworth for 150k if you want, but if you WANT to sell it, we recommend 125k'

That is why they are the market leader - they pushed prices up during the boom and they know what they have yo do to stay in business during the crash.

The ONLY sold sign round our way (out of 30) is a Blundells one.

Quite right, It's only in their best interest to lie about the value of a property when it is rising because they will make more money. If they lie about the value of a property on the way down they wont sell any property and they will go bankrupt.

does anyone know of a website that tells you which agent has sold what houses and for how much below the asking price? Blundells gave me their speel of them having the most 'sold' signs up in Sheffield, tho in Hillsborough Reeds Rains seems to have more..... but I know from when people have moved, the agents do take AGES to remove their 'sold' signs - so of the ones that are up, how many have actually sold during this crash? or were they all sold before it?!

I like the idea of trying open viewings - worth a try! but starting to accept I'm most likely going to have to become a landlord so that I can go get myself a home in the midlands :-/ but might be best in the long run, if holding on to this house means I can sell it when the market is back up, and can buy another while the market is down....

Have you ever been a landlord before? How much equity do you have in the property and what would the yield be? Can you afford to maintain two property's, can you afford to pay two mortgages during voids and for how long? What if you lost your job? What if interest rates went up another 4% could you do it then? I would think very carefully about this considering the current climate.

The last crash took 10 years to recover and a further eight years to get to this point. Are you willing to finance a depreciating asset (Your old home and your new home) for 10 years? and then wait another 4 - 6 to make some profit?

no, never been a landlord before... never wanted to be one, still don't want to be one. But I've got the job of my dreams at the worst time to move.... I'm going to camp out in a friends spare room near my job but can't cope with that for very long when I'm used to having my own home.... What else 'could' I do!?! I can't get a home of my own near my job (bought or rented) unless I rent this one out (or sell it, but pigs may fly!).... and if I don't have a tenant I've got to pay the mortgage on the Sheffield house either way.

Maybe I'd be better off financially if I backed out of my senior level professional job down south and took unemployment benefit up here until I can sell for a decent price!! Get some benefit from the taxes I pay!
:hihi:

Rather than put my equity and finances up on here, think I'm going to go see an accountant / IFA.... and buy a lottery ticket on my way :)

So long as you can make the numbers work then taking the job of your dreams is obviously the right answer, even if you have to support renting+mortgage for a while.

no, never been a landlord before... never wanted to be one, still don't want to be one. But I've got the job of my dreams at the worst time to move.... I'm going to camp out in a friends spare room near my job but can't cope with that for very long when I'm used to having my own home.... What else 'could' I do!?! I can't get a home of my own near my job (bought or rented) unless I rent this one out (or sell it, but pigs may fly!).... and if I don't have a tenant I've got to pay the mortgage on the Sheffield house either way.

Maybe I'd be better off financially if I backed out of my senior level professional job down south and took unemployment benefit up here until I can sell for a decent price!! Get some benefit from the taxes I pay!
:hihi:

Rather than put my equity and finances up on here, think I'm going to go see an accountant / IFA.... and buy a lottery ticket on my way :)

Being a landlord can be a real pain if it's not your full time job, especially if you are doing it over a long distance. Also I wouldn't double the risk of loosing a lot of money by exposing myself twice to the property market.

Anyway Good Luck.

does anyone know of a website that tells you which agent has sold what houses and for how much below the asking price? Blundells gave me their speel of them having the most 'sold' signs up in Sheffield, tho in Hillsborough Reeds Rains seems to have more..... but I know from when people have moved, the agents do take AGES to remove their 'sold' signs - so of the ones that are up, how many have actually sold during this crash? or were they all sold before it?!

I like the idea of trying open viewings - worth a try! but starting to accept I'm most likely going to have to become a landlord so that I can go get myself a home in the midlands :-/ but might be best in the long run, if holding on to this house means I can sell it when the market is back up, and can buy another while the market is down....

I know there is a website but cant remember what it is.However, Blundells have about 33% of the market in Sheffield so maybe get a free valuation from them and see if they can sell it.If it is priced right, I am sure that even in this market you can sell in Crookes.

The house next door to me sold in about 3 weeks and that was at the top end of the bracket, though the owners have had lots of work to do to get it up to scratch.There is one property in Crookes being sold by Saxton Mee and it has been completely renovated and has been on the market for months and months, presumably because the seller wont budge on the price and wants a return on his money, but one directly across the rd with blundells has just sold presumably because it was marketed correctly at the right price.
Personally, I begrudge paying any fees to an agent, but I must concede if I had to, I would choose Blundells any time to sell my property.

A friend has just sold her house. After being on the market for 6 months, she finally took my advice and accepted what in her mind was a "sickeningly low" offer. However she got the same discount on the bigger place she's moving to, so despite selling the place for less than she bought it for in 2004, she's actually up on the deal.

People are waking up, and realising that to sell today you need to be realistic about tomrrow's price, and that falling house prices isn't actually a bad thing! :)

I see Morgan Stanley & Goldman Sachs have applied to become regulated banks, as of last night. It sounds like a done deal.

I am just in the process of putting my property on the market (great timing) and am surprised to hear people recommending Blundells. They gave the highest valuation as they stated that people were likely to offer £20k below the asking price anyway. The other Estate Agents I have spoken with were much more honest and gave valuations based on other recent comparative sale prices. Blundells also had the highest fees and add-on costs and by refusing to negotiate on any of them they have lost a customer

I had a few valuations... Blundells actually did suggest the same asking price of Reeds Rains, whereas Haybrook said £5k less. Haybrook took 2 weeks to get any paperwork to me so crossed them off my list for being slow. Managed to negotiate with both Reeds Rains and Blundells to lower their fees but the woman in Blundells office couldn't give a straight answer to a simple question and irritated me, so I crossed the street to Reeds Rains.... but then they took one week to get my online ad up and running.... ?!?

If the market was good I'd not use an agent as selling in Hillsborough is usually easy, but now with the way things are, I think if you're not with an agent you've next to no chance... IF they can sell in this market, they are worth their fee. Big IF....

Cheers for the wish of good luck doomlord - a bit of luck would be great!

TV looks good tonight people;

8pm - ITV1
Crunch Time: Tonight
As the economic crisis worsens, experts predict what consequences the current turmoil will have for savings, house prices and jobs.


8:30pm - BBC1
Panorama: How Safe Is My Money?
Reporter Jane Corbin heads an in-depth look into how current crises in the financial world could hit Britons in the pocket further down the line, looking at how banks, mortgages, insurance and pensions may be affected. Presented by Jeremy Vine.


9pm - Ch4
The Price of Property: Fool's Gold
Journalist Jon Henley continues his journey around the UK with a trip to Manchester. He meets the architect of the city's regeneration, as well as some of those most affected by the changing fortunes of the housing market, including a woman among the first to buy her council house and another who lost so much on her seven properties that she is losing her family home.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/3056278/Rental-demand-soars-65-per-cent.html
Rental demand up 65% in the last year.

Where's Sham? He argued till he was blue in the face that rental demand had not risen. So there's the numbers.
New landlords might be suffering because of the mortgages, but established ones must be laughing all the way to the bank.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/3056278/Rental-demand-soars-65-per-cent.html
Rental demand up 65% in the last year.

Where's Sham? He argued till he was blue in the face that rental demand had not risen. So there's the numbers.
New landlords might be suffering because of the mortgages, but established ones must be laughing all the way to the bank.


The last para does say that rents haven't increased however due to increased supply as well as increased demand. I've been following this quite closely...it looks like two different markets in Sheffield from what I can see. The city centre flats seem to have reducing rental prices, and the family house rental market seems to be increasing, but not by much.

TV looks good tonight people;

8pm - ITV1
Crunch Time: Tonight
As the economic crisis worsens, experts predict what consequences the current turmoil will have for savings, house prices and jobs.


8:30pm - BBC1
Panorama: How Safe Is My Money?
Reporter Jane Corbin heads an in-depth look into how current crises in the financial world could hit Britons in the pocket further down the line, looking at how banks, mortgages, insurance and pensions may be affected. Presented by Jeremy Vine.


9pm - Ch4
The Price of Property: Fool's Gold
Journalist Jon Henley continues his journey around the UK with a trip to Manchester. He meets the architect of the city's regeneration, as well as some of those most affected by the changing fortunes of the housing market, including a woman among the first to buy her council house and another who lost so much on her seven properties that she is losing her family home.

They all sound like Daily Mail headlines. Just what we need on an evening...more 'experts' telling us how it is.

They all sound like Daily Mail headlines. Just what we need on an evening...more 'experts' telling us how it is.
Whilst they are inevtibaly going to be 'tabloidised' to a degree, to fit into such small timeslots, that doesn't mean thay're not correct; the housing expert they had on has been ridiculed in the past when prices were still going up, but been proven spot on to date.

For those that missed it, the views regardingl property was that the average price will fall between 30% and 50% from it's peak when the falls finally stop. The experts made predictions where hose prices would be +12 months compared to now, and were broadly in agreement, at around -15%.

Whilst they are inevtibaly going to be 'tabloidised' to a degree, to fit into such small timeslots, that doesn't mean thay're not correct; the housing expert they had on has been ridiculed in the past when prices were still going up, but been proven spot on to date.

For those that missed it, the views regardingl property was that the average price will fall between 30% and 50% from it's peak when the falls finally stop. The experts made predictions where hose prices would be +12 months compared to now, and were broadly in agreement, at around -15%.

One of the experts talking about Bradford and Bingley also mentioned that B&B had bought a lot of bad debt from GMAC, which was interesting (for me anyway - knowing a bit about GM and GMAC ).

30% drop sounds a lot, but from a peak to the trough is one thing....I've no doubt the fall will overshoot to an extent...where did they think it would "settle" ? ...I didn't see the whole programme.

Or did they think a 50% drop from the peak is a realistic proposition? I genuinely find that hard to believe.

Whilst they are inevtibaly going to be 'tabloidised' to a degree, to fit into such small timeslots, that doesn't mean thay're not correct; the housing expert they had on has been ridiculed in the past when prices were still going up, but been proven spot on to date.

For those that missed it, the views regardingl property was that the average price will fall between 30% and 50% from it's peak when the falls finally stop. The experts made predictions where hose prices would be +12 months compared to now, and were broadly in agreement, at around -15%.

I just don't see the point of these programmes. It's almost like people want the economy to fail, house prices to crash, people to be left in negative equity, struggle to survive..it makes news I suppose and gives the doom-mongerers something to get excited over. To me it's it unnecessary scaremongery which in itself creates the a huge problem....lack of confidence.

Just what do the reported 'estimated figures' stated above prove or achieve??..it proves that some so called smart arse expert believes something may or may not happen, could be this figure, could be that but at least they are broadly in agreement that we are due an apocolypse..but thats ok..no need to worry folks..or is there?..hold on...there's another expert predicting something else. I give up :loopy:

I just don't see the point of these programmes. It's almost like people want the economy to fail, house prices to crash, people to be left in negative equity, struggle to survive..it makes news I suppose and gives the doom-mongerers something to get excited over. To me it's it unnecessary scaremongery which in itself creates the a huge problem....lack of confidence.

Just what do the reported 'estimated figures' stated above prove or achieve??..it proves that some so called smart arse expert believes something may or may not happen, could be this figure, could be that but at least they are broadly in agreement that we are due an apocolypse..but thats ok..no need to worry folks..or is there?..hold on...there's another expert predicting something else. I give up :loopy:


We had property-porn before....now we've got rubber necking at the financial car crash...its just morbid curiosity

One mans meat is another mans poison.

50% house price falls for the homeowner is bad news.

50% house price falls for the 'want to be' first time buyer is good news.

The last para does say that rents haven't increased however due to increased supply as well as increased demand. I've been following this quite closely...it looks like two different markets in Sheffield from what I can see. The city centre flats seem to have reducing rental prices, and the family house rental market seems to be increasing, but not by much.

Yep, I saw that, increased demand, but increased supply is keeping the pricing flat.
City centre apartments may be a slightly different kettle of fish, there are simply to many of them now in Sheffield.

Still, not the picture that Sham wanted to paint regarding the rental market.

One mans meat is another mans poison.

50% house price falls for the homeowner is bad news.

50% house price falls for the 'want to be' first time buyer is good news.

For 90% of homeowners it's not that big a deal, if anything it makes the next step closer.
It's only a big deal for those that bought something post Aug 2006 (roughly speaking). For nearly everyone else in the country, it's a good thing.

The economic wobbles that precipitated the pop are different, a recession is good for very few people.

Still, not the picture that Sham wanted to paint regarding the rental market.

Sorry Cyclone I'm struggling to remember that I ever got into a debate about rental prices. I have always said that house prices will fall and its not a good time to buy, but stayed out of the arguments about rent.

I'll gladly be proved wrong, but I think you might be thinking of someone else.

On a separate issue, I see that Tony and Phylis both disappeared off the Forum within a few days of each other - coincidence?

Could be them, maybe I'll look it up, then again, maybe I can't be bothered :tired:

Could be them, maybe I'll look it up, then again, maybe I can't be bothered :tired:

you must be tired - I wasn't suggesting it was them (thats why i said on a separate issue.....)

For 90% of homeowners it's not that big a deal, if anything it makes the next step closer.
It's only a big deal for those that bought something post Aug 2006 (roughly speaking). For nearly everyone else in the country, it's a good thing.

The economic wobbles that precipitated the pop are different, a recession is good for very few people.

It's not a big deal for 90% of ALL homeowners whether you bought in post or pre 2006. It's only a big deal if you are selling and borrowed beyond your means and will end up losing money due to falling prices..but even then you can gain on your next purchase.

Anyone with negative equity is tied to the house until they get back into credit, it also must gall them that they spent so much and can't even get it back.
It's not like they'll loose their house, but they are definitely the ones who suffer the most, particularly if they are forced to sell for some reason.

Anyone with negative equity is tied to the house until they get back into credit, it also must gall them that they spent so much and can't even get it back.
It's not like they'll loose their house, but they are definitely the ones who suffer the most, particularly if they are forced to sell for some reason.

We've been here before and no doubt we'll be here again. I'm sure in the long term if you were to lose money now you would probably claw most of not all of it back when house prices rise again sometime in the future.

I'm trying to sell albeit not sucessfully but thankfully profited well from the boom so it would take something catastrophic to make a loss.

mine could drop 70% still be worth more than i paid for it


be good for young and first time byers so i think its a good thing (sorry to those that will loose thou)

30% drop sounds a lot, but from a peak to the trough is one thing....I've no doubt the fall will overshoot to an extent...where did they think it would "settle" ? ...I didn't see the whole programme.

Or did they think a 50% drop from the peak is a realistic proposition? I genuinely find that hard to believe.
They didn't say where it might settle, purely because they didn't say if they thought it would settle (although I suspect if asked they would have said so; that's what has happened with every previous crash, in UK and abroad). They all agreed that a figure approaching 50% would be the total fall from peak to trough.

It does sound mental at first thought, but don't forget that this is the biggest housing bubble we've ever seen, inflated and over inflated beyond all comprehansion due to financial greed (both in the markets and in the form of BTL), false ideas and spin. Building an economy on debt that cannot be serviced has brought financial ruin to the global markets. The rules have now changed. All the factors I listed back on page 6~7ish of this thread will bite, and bite hard.

Prices rose roughly 300% in the last 10 years, why couldn't they drop to half their value a year ago, they've already dropped nearly 13% and at an unprecidented rate, after all. Each of the falls we've seen in the last 6 months was almost as big as the total fall seen in the full 6 month period prior.

Housing markets take aaages to turn, but they then go in that direction for a lonnnng time.

People should not worry that house prices are falling, as has been said - for the vast majority, it is good news!

...

People should not worry that house prices are falling, as has been said - for the vast majority, it is good news!

That's the theory, of course it never quite works out that way.

Assuming this crash follows the patterns of previous ones, we'll have several years of falls followed by a stagnation for 5 years plus. By this time, property will become such a dirty word that most people who experienced the falls will be too afraid to touch it. The chances are, they won't benefit from the falls anyway.

That's the theory, of course it never quite works out that way.

Assuming this crash follows the patterns of previous ones, we'll have several years of falls followed by a stagnation for 5 years plus. By this time, property will become such a dirty word that most people who experienced the falls will be too afraid to touch it. The chances are, they won't benefit from the falls anyway.
That's when you know it's time to get onto the ladder; when everyone else says "you'd have to be mad to buy a house!".

IMHO prices will not return to the unaffordability levels they reached recently, hopefully not ever but certainly not for at least 10 years; most people waiting to buy will do so in that period so should gain from this correction. Most likely, the majority of those waiting to buy will do so a year or two after prices start to slowly go back up again; predicting the bottom is as tricky as predicting the top.

That's when you know it's time to get onto the ladder; when everyone else says "you'd have to be mad to buy a house!".



Yes, it's almost self-defining that almost everyone will miss out on the optimum time to get onto the ladder. If everyone did time it right, the price of property would shoot back through the roof instantaneously.

The thing is, people will be saying "You've got to mad to buy a house" for the next ten years and for a significant slice of that time they'll be right. The trick, as you said above, is to know when they're wrong.

The thing is, people will be saying "You've got to mad to buy a house" for the next ten years and for a significant slice of that time they'll be right. The trick, as you said above, is to know when they're wrong.
Exactly. :)

So far I've cut my own path, through education, economic speculation and keeping a keen ear to the ground. And so far it's worked out nicely, so I'll keep doing what I've been doing.

I actually don't mind if I don't buy at the bottom, I'm happy to buy a nice house at a nice price, even if I could have got it cheaper slightly sooner/later. The key bit is not buying a shoebox crammed amongst identical depressing shoeboxes, that cost me 5 times my salary.

Mortages up:

http://www.thisismoney.co.uk/mortgages/article.html?in_article_id=452721&in_page_id=8
HSBC said that it had been forced to increase its fixed rate for first-time buyers by 0.3% to 6.27%.
When it says "first time buyers", it means anyone without a 25% deposit.


I believe Northern Rock and Abbey were also due to announce a new set of mortages today, at a higher rate to a set that they withdraw at the same time. I'm sure the relevant numbers are out there if you go look, but I found it more interesting that the very safe HSBC have put rates up, they have comparatively little loss and liquidity issues. (This says quite a lot!)


In other news, for those seeking some enlightenment of the bigger picture...
http://news.bbc.co.uk/1/hi/business/7635388.stm
(55 mins long, so only for those who aren't just headline-readers :P)

[QUOTE=SupraSteve;4107898]Mortages up:


When it says "first time buyers", it means anyone without a 25% deposit.


I believe Northern Rock and Abbey were also due to announce a new set of mortages today, at a higher rate to a set that they withdraw at the same time. I'm sure the relevant numbers are out there if you go look, but I found it more interesting that the very safe HSBC have put rates up, they have comparatively little loss and liquidity issues. (This says quite a lot!)

QUOTE]

Excellent post as usual Steve. :)

I just wish the likes of Tony, Phyllis and the usual house price rampers such as Bertie Bassett were here to debate this with you. They must be running scared.

They were very keen to pick on posters here saying prices were about to crash. They are appear to have gone back into the woodwork.:hihi:

Keep up the good work of informing the people of Sheffield what is really going on in the housing market.

agreed Zabre - Supra Steve beat Phylis and Tony (or was it Phil and Kirsty) with facts.

I just hope not too many people were convinced to buy by their constant propaganda over the last 12 months.

http://news.bbc.co.uk/1/hi/business/7638028.stm

Make sure that if you are looking for a property that you offer well under the asking price.

http://news.bbc.co.uk/1/hi/business/7638028.stm

Make sure that if you are looking for a property that you offer well under the asking price.

Yes I agree especially if you are looking to move to an area where there are a few houses you would take. There is absolutely nothing to lose as it's a buyers market and if someone is offended by you putting in a cheeky offer they can do nothing but bargain with you really. There isn't exactly a massive queue of other buyers they can turn to.

I will be buying around easter time next year and I think keeping an eye on Property snake is a good idea. Some houses have been on there a while and you can get a good idea of how desperate the seller is by looking at how often they reduce the price and how much they reduce the price.

It's good times for the buyers at the moment - I just hope I don't get made redundant before easter!

Yes I agree especially if you are looking to move to an area where there are a few houses you would take. There is absolutely nothing to lose as it's a buyers market and if someone is offended by you putting in a cheeky offer they can do nothing but bargain with you really. There isn't exactly a massive queue of other buyers they can turn to.

I will be buying around easter time next year and I think keeping an eye on Property snake is a good idea. Some houses have been on there a while and you can get a good idea of how desperate the seller is by looking at how often they reduce the price and how much they reduce the price.

It's good times for the buyers at the moment - I just hope I don't get made redundant before easter!

Jobs are the problem as you say. The business I work in supports the banks with their IT and with HBOS sale this will hit us hard in the coming months. All those people in Halifax are very worried as Lloyds will probably not keep much there. Scotland is cheaper to have your base in.

Jobs are the problem as you say. The business I work in supports the banks with their IT and with HBOS sale this will hit us hard in the coming months. All those people in Halifax are very worried as Lloyds will probably not keep much there. Scotland is cheaper to have your base in.

The loss of jobs in one sector generally has a domino effect although obviously some are safer than others. It's a worrying time for a lot of people in terms of their jobs but in reality the vast majority of people will not lose their jobs unless there is some kind of massive depression like in the 30's.

The big companies are driven by profit with no regard for their workers - if Scotland is cheaper they will go there and similarly if India is cheaper still they will go there if possible.

HBOS took similar risks to Northern Rock, and are now paying the price. Quite why they failed ahead of even weaker banks such as Alliance & Leicester and Bradford & Bingley is a subject up for discussion & interpretation, but one thing is for sure; they aren't far behind and could just was easily fail* or get snapped up for bargain basement prices.

* = they'd probably be allowed to fail, too - they're not as key to the UK & UK population as HBOS was.
Well I was right, at least in part. Bradford & Bingley have failed [tick] and are now (...about to be announced as being...) owned by UK Gov [cross]. Why we should be saddled with ANOTHER £42Billion bill I do not know. :rant:
Bailing out NR and B&B tots-up to 20% of our National debt now, which is set to grow by ~50% next year. :help:

Excellent post as usual Steve. :)
Keep up the good work of informing the people of Sheffield what is really going on in the housing market.
Thank you, I try. :)

I just wish the likes of Tony, Phyllis and the usual house price rampers such as Bertie Bassett were here to debate this with you. They must be running scared.
Tony appears to have left the forum for good! :o

agreed Zabre - Supra Steve beat Phylis and Tony (or was it Phil and Kirsty) with facts.

I just hope not too many people were convinced to buy by their constant propaganda over the last 12 months.
I don't know about SF posters, but Phil & Kirsty have been ramping the market for years.
What annoys me the most, is that we're ALL paying the price of a minorities stupidity. I protected my future as best I could in light of what I could see coming, yet my sensible actions are being punished because we have to mop up after the <naughty word> idiots and the greedy.

Well I was right, at least in part. Bradford & Bingley have failed [tick] and are now (...about to be announced as being...) owned by UK Gov [cross]. Why we should be saddled with ANOTHER £42Billion bill I do not know. :rant:
Bailing out NR and B&B tots-up to 20% of our National debt now, which is set to grow by ~50% next year. :help:

I have a few shares in B&B. They all 'disappear' when it gets nationalised I heard - is that right?

Hi there
I have had my house up for sale for about 6 months.
Im so desperate to sell, ive dropped it by £20,000.
I still havnt had a sniff, its on right move and my estate agent Willow have had it as the house of the week for ages.
Im only desperate to sell as i have got something lined up abroad, if i dont sell soon i will miss the chance.
To everyone with a house for sale, good luck, you will need it.

Things have changed so much in the last 12 months.
And now it's accelerating.
I take it sealed bids are not being insisted upon nowadays? :gag:

I have a few shares in B&B. They all 'disappear' when it gets nationalised I heard - is that right?
Pretty much, sorry. :(
Have a read about NR's shareholders here (http://www.uksa.org.uk/NorthernRock.htm). THey have been offered soem compensation apparently. I can't see it being much though.
...the UK Government have confiscated the shares...

They have promised to pay some compensation but have rigged the basis of the valuation of the shares so that shareholders are likely to get very little or nothing (newspapers have been suggesting it could be as little as 5 pence per share and we also believe it will be a negligible figure).
(Note that NR shares were about ~90p when trading ceased, I think. B&B were about 15p?)

Northern Rock shareholders take battle to high court (http://www.accountancyage.com/accountancyage/news/2216225/northern-rock-shareholders)


EDIT
Actually it's worse than that. I didn't realise until now, but B&B were deemed as being unviable as a business - a key difference between them and NR.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/09/city_pays_for_bradford_bingley.html

The most politically explosive aspect of Bradford and Bingley's nationalisation is how much risk of losses is being borne by taxpayers. The answer, surprisingly, is not much.

Because the bulk of any future losses will be born first by shareholders and providers of what's called subordinated debt.

And after that losses - up to a staggering £14bn - would fall on the banking industry.

...on Saturday the board of the Finanacial Services Authority ruled that B&B was unable to pass the test of being a viable bank, and therefore a claim was triggered on the insurance scheme for bank depositors, the Financial Services Compensation Scheme.


For taxpayers to lose a penny Bradford and Bingley's future losses would have to be unthinkably huge.
Hurrah! :)




Not viable. The biggest self-cert mortgage and BTL lender there was. Not viable as a business. Is anyone still failing to realise what that means?

Hi there
I have had my house up for sale for about 6 months.
Im so desperate to sell, ive dropped it by £20,000.
I still havnt had a sniff, its on right move and my estate agent Willow have had it as the house of the week for ages.
Im only desperate to sell as i have got something lined up abroad, if i dont sell soon i will miss the chance.
To everyone with a house for sale, good luck, you will need it.
Hi Angelstar. I am genuinely sorry to hear you're not having any luck selling, as I am for anyone in similar situations, but I'm not surprised. At the last 'guesstimate', there are 15 sellers for every 1 potential buyer.

To sell a house 6 months ago, sellers needed to take a decent chunk (5~10%) off the asking price and hope that a not entirely clued-up buyer came along and thought they were getting a bargain... and for the deal to be signed & sealed pretty sharpish so they didn't drop out/reduce their offer.

Now, that 5~10% discount is the current asking price, and the potential buyers realise this, so aren't so easily bought with smallish drops in asking price here & there. They hear the word "crash" on the news & TV every few hours, let alone days - and are holding back as a result. Who would buy if they thought the same house could well be cheaper still in another 6 months, or even another 2 years?

To sell in todays market... I guess you need a lot of luck. I hope you find a way to follow your dream of leaving the UK soon.

Mortgage lending was 5% in August of the amount the year before.
Actual completed mortgages (32,000) was the lowest ever recorded.

I think Darling has made a mistake though, how many more failing private businesses is the government going to bail out. Let the market take effect and let them fail.

Pretty much, sorry. :(
Have a read about NR's shareholders here (http://www.uksa.org.uk/NorthernRock.htm). THey have been offered soem compensation apparently. I can't see it being much though.?



I knew the risk when I bought the extra shares offered in the share issue and could have sold my others so it's my fault. I was going to buy another 2 or so grand's worth a couple of months back - a few people on another thread warned against it so thank god they did and thank god I listened. Ive learnt my lesson with shares - leave it to people who have SOME idea what they are doing.

How long do you reckon house prices will keep falling as a guess? I agree with what another poster has said that people will keep thinking don't buy now, don't buy now and then house prices will go back up again. I would rather buy and then houses go down more than put it off and then houses start to go up - better to regret something you've done than something you haven't done. Similarly though I will be pretty gutted if I buy and they plunge another 15-20%. In your opinion do you reckon easter is too early a time to be looking to buy?

Mortgage lending was 5% in August of the amount the year before.
Actual completed mortgages (32,000) was the lowest ever recorded.
I was shocked at that stat. 95% down year on year. Nothing short of amazing.
The numbers were at ~65% compared to 12 month previus, until now. I suspect this is 95% figure is most certainly a blip, however, as the faffing about & rumours of a stamp duty 'holiday' made many people hold fire on moving all together. Next month may well be spun as a 'bounce', as it'll contain the few people who would have moved in September, plus those who held off in August. Get ready for "housing crash over!" headlines in 30 days, then "the crash is back on!" +30 days from then. ;)

I think Darling has made a mistake though, how many more failing private businesses is the government going to bail out
Just... don't. Gah!

Let the market take effect and let them fail.
In the cases of B&B and NR, I agree; they should have been allowed to fall. HBOS however was too key to UK PLC and UK citizens so much as it pains me to say it they needed saving. But then they didn't get help from the government anyway.

I've learnt my lesson with shares - leave it to people who have SOME idea what they are doing.
They are a gamble of sorts, so you have to be willing to lose whatever money you put in. Nothing is certain in life (bar death & taxes ;)), and anyone who insists something is a safe bet is talking opinion not fact.

...which leads me on quite nicely...
How long do you reckon house prices will keep falling as a guess?
...In your opinion do you reckon easter is too early a time to be looking to buy?
First & foremost, I also do not have a crystal ball. I can tell you what I think, but I strongly encourage you to make the decisions about what suits your situation and your needs.

Now, that said, let me quote my posts earlier in this thread...
To sumarise my biggest points about the housing market and why I think it'll fall a long way yet:

Housing IS overvalued, and this is reported in the media so the public 'know' it now and will believe it even if Tony/etc think it's still "worth" more. Overvalued to the tune of 30%-50% depending on who you listen to.
There was false demand. People borrowing 125% LTV have all gone (and rightly so!). People borrowing 100% have all gone (there are no 100% mortgages any more, yay!). People lying on self-cert mortgages have all but gone. People borrowing 7x their salary have all gone. Until prices fall to affordable levels, next to no-one will BE ABLE to buy
Britain has had cheap credit for far too long and false "growth" as a result. Releasing equity left right & centre without a thought for how they'll pay off 1/4 million in their lifetimes and maxing out their many credit cards, HP, Buy Now Pay next Christmas etc etc etc. The banks have turned and it's time to start paying back what is owed further reducing people's affordability to buy stuff/service mortgages.
Banking reforms are coming, as mentioned. Also however, the banks have lost trillions of dollars over this, and will want to make more profit once things settle down to recoup some of it. We'll be paying for that whether we like it or not.
Inflation & the cost of essentials; yet more strain on people's wallets.
Interest rates & LTV when remortgaging. Interest rates offered have risen, especially when the LTV ratio is poor and the bank has a larger risk. Negative/reduced equity will put many "homeowners" onto the Standard Variable Rates instead of the lovely 5% deal they got 2 years ago. This brings HUGE increases to their monthy premiums, leading to less spending power and in the worst cases...
Reposessions - think we've covered that a fair bit.
Most of the BTL sector is dead. <especially now NR and B&B have failed!> Few products available, of those that remain LTV ratio has to be very strong. As a result; reduced demand from the amatuers/those who stretched themselves. No more buy house A, remortgage and use the equity as deposit on house B... (Extra note: A house of cards if ever I saw one!!)
Indicators - 1 quick & dirty example: auctions are seeing 50%-70% of their stock go unsold and auction houses half empty when just 18 months ago they were brimming. Of those that do sell, the average prices is 23% down on 12 months ago.
Sentiment. Never, ever underestimate sentiment. I did and prices rose more than I thought they could. Now the market has turned; it's an oil tanker, it takes aaaaaaaaaaages to change direction but once it has - and it has now - it'll go in that new direction for a long time to come!
Land prices are falling, as are building (labour) costs. Houses don't cost as much to build as they did
The emerging recession!



That last one is huge. Watch employment figures very closely. the more people out of work, the less potential buyers there are and the more current homeonwers are at risk of defailting and being reposessed, which takes you back to 2 of the above points.


If I had to put MY guesstimate on how long this has to fall - and note that it's tricky to be accurate at this, the time when $700Billion bailouts are in then out then in then out, and are they even enough - it'd be roughly 2~3 years to the bottom, then 2~3 years of roughly stagnant prices (don't forget to calculate inflation into "real" prices). I encourage everyone to do their own research however, and not rely on my judgment any more than anyone elses. And, above all - buy when it's right for you.

Good luck! :)

They are a gamble of sorts, so you have to be willing to lose whatever money you put in. Nothing is certain in life (bar death & taxes ;)), and anyone who insists something is a safe bet is talking opinion not fact.

Ive learnt my lesson r.e. shares and am unlikely to be buying any more of them.


First & foremost, I also do not have a crystal ball. I can tell you what I think, but I strongly encourage you to make the decisions about what suits your situation and your needs.

I'll make my own decision nearer the time but like to see what people think about this and why - albeit on a purely selfish level as I am a would be buyer.

The 'houseprice crash' website has a list of predictions from various other sites and agencies and they range from a rise of about 25% to a drop of 50% in the next 5 years! A pretty broad range of estimates so I am not going to listen to any one person.

My situation is basically I want a house but don't need one. Im saving money each month so the longer I wait the less I am going to pay on the mortgage even if prices stayed static. Do prices often stagnate after a crash - I need to take this into consideration if so as house prices will in effect be going down for me as I am saving each month.

If your guesstimate of around 5 years with no house price growth is correct then I would be foolish to buy at easter. I'll see how things are lying then and maybe i'll take the scientific approach and toss a coin. Seriously it sounds like I might struggle to even get a mortgage so my hand will be forced and i'll have to wait.

Cheers anyway -i'll see how things go.

The 'houseprice crash' website has a list of predictions from various other sites and agencies and they range from a rise of about 25% to a drop of 50% in the next 5 years! A pretty broad range of estimates so I am not going to listen to any one person.
The forum isn't quite so broad, and is much more detailed, but then it does attract more bears (pries will fall) than bulls (prices will rise), so keep your sanity check hat on if you venture forth; anyone can sign up, and again it's more opinion. Some people are worth listening to, no doubt - but I bet for each credible voice on there, there are several who's opinion might not be quite as savvy.

Watch the TV clips linked on there, they have nice little bites of information to mull over.

Do prices often stagnate after a crash
So far - and in any country you care to choose - the answer is: always.
People get burned. After a genuine crash, the time to buy is usually when everyone else is saying you'd be "mad" to buy. The same is true in reverse; when everyone tells you you "can't lose" with property or with X shares, it's probably the time to get out, and fast.

If your guesstimate of around 5 years with no house price growth is correct then I would be foolish to buy at easter. I'll see how things are lying then and maybe i'll take the scientific approach and toss a coin. Seriously it sounds like I might struggle to even get a mortgage so my hand will be forced and i'll have to wait.
And if you would struggle, with a deposit in hand... think how many others are in worse situations and as a result can't buy whether they want to or not. The less first time buyers there are, the more prices will HAVE to fall before activity can pick up again. Check out how much of a mortgage you could get; try some of the online comparison sites just out of interest.

Be smart, be in a better position than the average (save, and avoid all debt if possible), be more tuned-in to the factors that affect the market, and jump when you make the call it is time to jump. No-one will know when the market will turn again, until AFTER it has. (But that still doesn't mean it might be any less of a buyers market ;))

Ive learnt my lesson r.e. shares and am unlikely to be buying any more of them...

This is not a criticism of you or anyone else Dimitri, but it is such a good example of why markets overshoot and undershoot instead of finding their 'correct' level.

People happily get involved when the only way is up, then pull out when they get burned or see other people get burned. The same happens in any other market, including property.

I found this nice, potted easy-reading summary article of everything anyone could want to know about the ongoing financial crisis:

http://www.newstatesman.com/politics/2008/05/financial-crisis-banks-england



P.S. If you fancy being wreckless with money, buy 5 Barratts new builds and get 43% off (http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/3111211/Barratt-Development-slashes-43pc-off-property-prices.html). I suspect a savvy buyer could negotiate the same deal for just buying 1 place, to be honest; Barratts and other builders are desperate for money as their land banks devalue day by day.

Analyst Alastair Stewart said: "Prices of urban apartments appear to have fallen in many cases by 40pc to 50pc, volumes have dried up to virtually zero, many developers have gone bust and land in many cases appears to be worthless."

He added the investment bank's visit to the regions revealed "a near-apocalyptic landscape which we believe to be far worse than even the most candid builders have revealed in presentations".

Mr Stewart said its impressions of the property market – especially of newbuild apartments - "is of carnage beyond even our most bearish expectations".


Brilliant news for FTBs!

This is not a criticism of you or anyone else Dimitri, but it is such a good example of why markets overshoot and undershoot instead of finding their 'correct' level.

People happily get involved when the only way is up, then pull out when they get burned or see other people get burned. The same happens in any other market, including property.

No offence taken. I made a mistake with this and have learnt my lesson - I will not be venturing into this area again without significant research or without the guidance of somebody who really knows what they are doing.

The forum isn't quite so broad, and is much more detailed, but then it does attract more bears (pries will fall) than bulls (prices will rise), so keep your sanity check hat on if you venture forth; anyone can sign up, and again it's more opinion. Some people are worth listening to, no doubt - but I bet for each credible voice on there, there are several who's opinion might not be quite as savvy.

Watch the TV clips linked on there, they have nice little bites of information to mull over.


So far - and in any country you care to choose - the answer is: always.
People get burned. After a genuine crash, the time to buy is usually when everyone else is saying you'd be "mad" to buy. The same is true in reverse; when everyone tells you you "can't lose" with property or with X shares, it's probably the time to get out, and fast.


And if you would struggle, with a deposit in hand... think how many others are in worse situations and as a result can't buy whether they want to or not. The less first time buyers there are, the more prices will HAVE to fall before activity can pick up again. Check out how much of a mortgage you could get; try some of the online comparison sites just out of interest.

Be smart, be in a better position than the average (save, and avoid all debt if possible), be more tuned-in to the factors that affect the market, and jump when you make the call it is time to jump. No-one will know when the market will turn again, until AFTER it has. (But that still doesn't mean it might be any less of a buyers market ;))

Thanks for the info. I will look at the state of things around the middle of next year and make a decision then on whether to wait or whether to buy.

Thanks for the info. I will look at the state of things around the middle of next year and make a decision then on whether to wait or whether to buy.
Well, they got another 1.7% cheaper in September. Just look at that graph! ;)
http://news.bbc.co.uk/1/hi/business/7647251.stm

How long the correction lasts and how deep the fall in prices is depends largely on sentiment, as well as an end to the turmoil in the financial markets, she* says.

Her analysis comes shortly after the Council of Mortgage Lenders suggested that predicting the short term course of house prices was "futile".

* = Fionnuala Earley, Nationwide's chief economist. She has always until now, talked the figures up (and been wrong as a result). I guess she can't tell porkies any more, as a few weeks ago her boss told the world he figured a 25% fall from peak was on the cards!



Hmmm.... sentiment has a big part to play does it? I wish I'd reaslied that Fionnuala. You're so clever and clearly worth whatever it is you're paid. :rolleyes:


...11 other items...
Sentiment. Never, ever underestimate sentiment.

Let's wake up this sleeping thread.
http://www.telegraph.co.uk/finance/comment/jeffrandall/3168301/Debris-from-the-City-and-Wall-Street-will-destroy-innocent-lives.html

Such is the extent of upheaval that some respected forecasters have simply given up making predictions. Mike Gerrard of Grant Thorton, a leading accountancy firm, says: "Faced with the current crisis, it is impossible to predict the level of personal bankruptcies and home repossessions next year."
That, is a very significant comment.

With many sellers still in denial, and refusing to slash prices, the market has all but ground to a halt.

In America, 16 per cent of homes are "under water", leaving about 12 million households owing more than the value of their properties. It's not yet that bad in Britain, but history tells us that as negative equity rises, so do the rates of mortgage arrears, defaults and repossessions.

As bricks and mortar are dumped on the market, house prices fall further, prompting another round of what bankers call "de-leveraging", a panicky reaction by distressed borrowers to cut debt: it's a circle of despair.

British mortgages that have been in arrears for three to six months jumped from a low of 55,800 in the second half of 2003 to 87,700 in the first half of this year. In the same period, repossessions in England and Wales rose from 4,000 a quarter to more than 15,000 – and the graph is still pointing upwards.