What's the housing market like at the moment?

[Buffey 10]

Thanks Sham71

 

One more quick question, how long do you think it could possibly take

for the credit crunch to sort itself out if ever?

 

Cheers Buffey

[sham71 10]

Thanks Sham71

 

One more quick question, how long do you think it could possibly take

for the credit crunch to sort itself out if ever?

 

Cheers Buffey

 

I'm not an expert (just done a lot of research), but I don't think that the mortgage market will ever get back to the crazy days of 6 x salaries and 125% mortgages etc. It will revert to the long term average of 3.5 X salaries with a good deposit etc.

 

And BTL as a phenomenon is finished.

 

But its not all doom and gloom as the credit market will stabilise and after a bad 2008 and 2009, things will start to pick up in 2010. Although it may be 2012 or longer before house prices start to recover. Remember prices (in real terms) fell from 1990 until 1995 last time.

 

Another way of looking at it is that if we are about 12-18 months behind the USA, keep an eye at what is happening there as it may give an indicator of what will happen here.

[Buffey 10]

if no one is buying how will that effect landlords who bought into buy

to let say 4-5 years ago?

 

I ask this as my brother in law bought 5 apartments 4-5 years ago, surely people will

want to rent , like me, if they do not buy at the moment. Or is it the people who

have just bought who may struggle to make anything for a while?

 

Buffey.

[shadow08 10]

sham71

 

It seems from your previous posts and threads you have some kind of

of need to talk down and scare people about the housing market at the moment and I see from your posts you have been doing this since 2005.

 

Spelling out the doom and gloom with an "end is nigh" attitude Is a carless thing to do. You were advising people 3 years ago not to invest in this and that, because prices may fall out of bed, did you then apologise when prices rose between 2005 and 2008?

 

Yes the Market is slow and there are credit problems. That is obvious.

 

I will be honest with you my house is on the market and I've had an offer 5k below the asking price. But if I had sold 3 years ago when advised to by some commentors said I should have, I'd have been much worse off.

The house I would like to buy(the owners) will not budge on price and they are prepared to stay if they cannot get what they believe the house is worth, thats their choice and they are in no hurry. They too have to buy further up the ladder.

 

Please remember that for a lot of people a house is a home and all this gloomy talk will just cause more misery if people are already in trouble.

 

No one really knows how things will pan out, the fact that the market is slow now and that prices will stay flat with no growth(in real terms) for possibly quite a while will make the market healthy in the long term as wages in this period will catch up e.t.c. and it is exactly what is needed to stabilize and help FTB. So maybe the current conditions are just the lower side of a natural peak and trough type movement through the decades.

 

I appreciate that you may think you are helping people and I find your comments interesting, but your comments have scared me and when I speak to vendors (whose houses I am viewing) these people don't echo your point of view and I just can't see a family with 2-3 children dropping their house price by 30-40%, they will just stay put and not bother moving. This has come across very strongly to me and my wife whilst looking.

 

I read you sold a while ago, is it not in your own interest to try and talk the market down to bag a bargain?

 

Please be careful what you say, you may be ok and as you said in one thread your money may be in the bank earning you interest, what makes you so sure its so safe there?

 

shadow08

[sham71 10]

Shadow08 - good of you to review my whole posting history before your very first post.

 

You mention people in misery, would any of those be people who bought beyond their means in the last 2 years? You would have advised them to buy at the time wouldn't you? Perhaps taking on a 125% mortgage fixed rate with Northern Rock that will soon be up for renewal and which no-one will touch? Maybe I'm not the one due to apologise.

 

If you are trading up, falling prices are actually a good thing because the gap between the prices of the 2 houses will become less. So, some people will still move even as prices fall. If you had sold 3 years ago, you would have bought your new house for less, so it wouldn't really have been a worse scenario for you would it?

 

I'm not sure why my comments have scared you - they are now mainstream throughout the media. If you want to ignore what is happening in the world and not be scared, thats up to you.

 

And I agree money in the bank is not as safe as it once was, but there are ways of researching banks to see which ones are most at risk from the credit crunch. Also we now have Northern Rock 100% guaranteed by the government, the safest place for your money in the world. So I'm quite relaxed about the money in the bank.

[shadow08 10]

sham

 

Never said I'd advise anyone to do anything, let alone take a 125% mortgage, didn't even know they existed actually. How can they?

 

I guess I'm a bit green...

 

As for 3 years ago, if I'd had sold then and waited for prices to drop as certain people advised I would have waited 3 years until now and I'm not sure I would be in a better position.

 

Never mind!

 

Reviewing your posts and the fact you said you sold some houses , maybe you are in the property business and do have an agenda.

 

Some of your posts accuse others of being in the business and having agenda's

 

Why accuse anyone of anything, its just chat?

 

I've read the forum for a while , hoping for good advice, your responses don't add up. But thats ok.

 

Did find the snakesproperty site interesting, the area I'm looking at seems about 5% down from Autumn.Which adds up and explains the offer on my home.

 

Lets hope you don't miss the opportunity to get a good deal yourself!

 

I don't want to ignore reality..by the way...

 

Thankyou for your advice and comments I guess

I'll take it all with a pinch of Salt from now,

 

Nice to chat,

 

No Hard feelings.

 

Cheers

 

shadow08

[frankief 10]

Please remember that for a lot of people a house is a home and all this gloomy talk will just cause more misery if people are already in trouble.

I'm afraid the misery has already been caused and will continue and Sham is not culpable. It is the banks giving out cheap credit to people who can't afford it and who will spend the rest of their sorry lives paying it back to the moneylenders. 'Gloomy talk?' Maybe people should listen a bit more to the truth instead of the unremitting cant of 'get on the ladder' and 'house prices only ever go up' and 'renting is dead money'. The British people have been fooled - is the value of a 'studio' flat in a hellhole in London really :help:a quarter of a million pounds?

[sham71 10]

Never said I'd advise anyone to do anything, let alone take a 125% mortgage, didn't even know they existed actually. How can they?

 

125% mortgage? - it was quite easy (i know friends that did it)

 

if you had debts of 50k and wanted to buy a house worth 200k, the bank (Northern Rock usually) would lend you 250k.

 

you now had debts of 250k and an asset of 200k. Instantly in negative equity.

 

'everyone' thought house prices would only ever go up, so the negative equity would vanish and all would be happy.

 

unfortunately the world doesn't work that way, and these 'victims' of NR will be in serious finanical misery soon (I did advise them against taking on the 125% mortgage by the way, but they preferred to listen to estate agents who told them what they wanted to hear)

[sham71 10]

sham

Reviewing your posts and the fact you said you sold some houses , maybe you are in the property business and do have an agenda.

 

Some of your posts accuse others of being in the business and having agenda's

 

Why accuse anyone of anything, its just chat?

 

Shadow - I just objected to people giving out advice on the market as if they were just the man in the street. Then when you researched their posts, you found them advertising properties to rent or let on other parts of the forum.

 

You say its just chat then accuse me of scaring you with my opinions. You can't have it both ways. I was worried that people would see their views and think that all in the market was rosy and they should buy now without giving it a seconds thought.

 

As for me, I had a couple of buy to lets which I sold, now I am renting and will be looking to buy a home for my young family in the next few years. I don't want to pay over the odds, so I can wait. Yes, I have been involved in property part time in the past, but it was never my main job and to be honest I am now disillusioned with it and would probably steer clear in the future.

 

First and foremost a house is a home, unfortunately the last 10 years have turned houses into investments, cash machines, pensions and the source of thousands of hours of cheap television.

 

Hopefully the coming correction will restore the balance.

 

Thats my agenda.

[Tony 10]

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.
  

So we have some form of reference point Let's use today's data from www.upmystreet.com's regional summaries.

 

Great Britain

Average price of property: £201,258

Month change: -0.2%

 

London

Average price of property: £355,159

Month change: +0.5%

 

 

South East

Average price of property: £265,924

Month change: -4.3%

 

South West

Average price of property: £232,661

Month change: +0.2%

 

East of England

Average price of property: £226,942

Month change: -1%

 

East Midlands

Average price of property: £169,214

Month change: -0.1%

 

West Midlands

Average price of property: £173,449

Month change: -2.1%

 

Wales

Average price of property: £157,775

Month change: 0.0%

 

North West

Average price of property: £160,404

Month change: -0.1%

 

Yorkshire and Humberside

Average price of property: £157,648

Month change: -1.8%

 

North East

Average price of property: £145,761

Month change: +2%

 

Scotland

Average price of property: £168,898

Month change: +7.5%

 

Edinburgh

Average price of property: £216,898

Month change: +6.9%

 

Glasgow

Average price of property: £158,789

Month change: +3.3%

 

I've picked a reference month where the highlighted national and local markers are both negative so I'm, already on the back foot so to speak. Let's see eh?

[frankief 10]

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

[1] Market forces,Tony. Prices can go down as well.What about all the repos?

[2] You mean high street banks? - Leading to more unemployment, and more defaulting on mortgages and more repos.

[3] Like the 50% ownership scam? Who wants to own half a house?

[4] No, people will learn a hard lesson - a home should not cost 6 or 7 times your salary.

Sorry to be a 'doomsayer' but things are not going to carry on as before - cash is scarce, no one can get cheap credit anymore, the recession is coming, people will lose their jobs, inflation is climbing.

[Tony 10]

Hey... don't try to shout me down. I'm simply proffering an opinion based on a bit more than what I read in the papers. I might turn out to be wrong, but we will see. If I turn out to be fully or even partially right I'm sure that you will offer your hindsight at the time