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What's the housing market like at the moment?

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I'm pretty certain banks want to write this disaster off and get back to "normal". They need to get back to "normal" to produce the big profits again. I think you are right in that they will want bigger deposits, but I think we'll see the 90% mortgage and probably 95% back pretty soon, because it suits the banks.

 

It doesn't suit the banks really and it doesn't suit the legislators. I think it will be a long time before easy credit comes around again, and high lend to value mortages are easy credit.

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He said his view above. Why don't you answer your own question?

 

Okay I will, a single anecdote is worthless and does nothing to help us understand the market or what is happening in general.

The only person a single anecdote matters too is the person who it happens too.

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This whole subject always makes people very vocal. Those that have houses don't want them to fall and those who haven't, want the market to crash and burn.

 

If the market dives, then it would be a good thing for many people. However it would probably also mean that the country would be in recession (which I believe is a very likely outcome).

 

We have huge price increases in domestic heating, fuel, food and mortgages (caused by the credit crunch), so it's not surprising people are no longer affording to buy their first or next home.

 

My predictions are as follows:

 

Declines to continue in the housing market for at least the next 2 years, with at least 10% through the next 12 months

Prices to continue increasing in housegold expendature above inflation

Inflation to hit 3% within the next 12 months

Fuel protests and supply blockades to return within the next 12 months

The economy to be in recession within the next 12-18 months

 

With regards to the 90% and 95% mortgage returning in the short term, I think that very unlikely. The only way I could see that happening is for banks to insert the same clause as they do for BTL investors, where if the price of the property falls, you have to make the difference up with your own money. People buying at 90% or 95% would not be able to afford the extra monry later on.

 

The Nationwide say that house prices fell 1% over the last year, so it would be a high risk strategy for the banks to return to 90% or 95% mortgages in the short to medium term.

 

Whatever happens in the next 12-24 months, it's certainly going to be an interesting ride. Hold on tight everybody.

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This whole subject always makes people very vocal. Those that have houses don't want them to fall and those who haven't, want the market to crash and burn.

 

If the market dives, then it would be a good thing for many people. However it would probably also mean that the country would be in recession (which I believe is a very likely outcome).

 

We have huge price increases in domestic heating, fuel, food and mortgages (caused by the credit crunch), so it's not surprising people are no longer affording to buy their first or next home.

 

My predictions are as follows:

 

Declines to continue in the housing market for at least the next 2 years, with at least 10% through the next 12 months

Prices to continue increasing in housegold expendature above inflation

Inflation to hit 3% within the next 12 months

Fuel protests and supply blockades to return within the next 12 months

The economy to be in recession within the next 12-18 months

 

With regards to the 90% and 95% mortgage returning in the short term, I think that very unlikely. The only way I could see that happening is for banks to insert the same clause as they do for BTL investors, where if the price of the property falls, you have to make the difference up with your own money. People buying at 90% or 95% would not be able to afford the extra monry later on.

 

The Nationwide say that house prices fell 1% over the last year, so it would be a high risk strategy for the banks to return to 90% or 95% mortgages in the short to medium term.

 

Whatever happens in the next 12-24 months, it's certainly going to be an interesting ride. Hold on tight everybody.

 

There are still 95-90% mortgages avaliable just at higher rates than lower LTV mortgages. You just have to search in the right places.

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He said his view above. Why don't you answer your own question?

 

Hi Tricky

He is a she!Dont worry, I know it is hard to tell.

 

My avatar is a picture of some espadrilles but you never know these days!!!

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I could have made it borderline, but it makes the point more clearly if it's exaggerated.

 

Sorry Cyclone, I just don't follow what you're driving at?? :confused:

 

I'm saying that regardless of any currrent fall (1% on the news a day or two ago), this is peanuts to any gains made over the past 4 or 5 years! Therefore, 4 or 5 years ago, waiting for the "crash" was utter folly! Just my opinion I know, but there you go! :)

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Also, she'd have to live somewhere in the meantime, at a rent of (conservative estimate) £500.00 per month. Four years of this is £24,000! Dead money!

 

To take it further. Even if the house dropped to £20,000 below the original £150,000 to £130,000, she will still have paid out £24,000 in rent! Still £4,000 down, and 4 years "behind" on the mortgage.

 

The point I was making is that your statement above may apply right now (with a 1% fall) but is not a universal truth. There are times and situations when it will work out cheaper to rent and to buy later. I exaggerated the figures in my example to make it clear.

At the moment 4 or 5 years of waiting for a crash has been a mistake. Check back in 2 years and see where prices are, if they've continued on down it might start to look more sensible.

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Looks like the goverment is predicting at least a 5-10% drop on average in the uk this year:

 

http://www.telegraph.co.uk/news/1951760/Caroline-Flint-blunder-lets-slip-Government%27s-house-price-pessimism.html

 

Though they didnt mean to reveal this...seems some crafty photographer snapped a picture of the ministers briefing notes which were not for public consumption!

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5 - 10 % as a minimum with the proviso that it could be worse.

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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.

 

Yorkshire and Humberside

Average price of property: £157,648

Month change: -1.8%

 

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? :)

 

Tony,

it was a brave move to put your money where your mouth was with the prediction, but I wondered, 1 month on whether you had changed your mind?

 

the figure you gave was at Dec 2007, here are the figures for January and February 2008.

 

http://www.upmystreet.com/property-prices/feature/regional-house-prices/yorkshire-humberside/l/Sheffield.html

 

So we are down 7.3% in Yorkshire and Humberside in the first 2 months of the year.

 

Do you stand by your prediction of less than 5% falls? Would you agree that the way mortgage approvals are continuing to fall, it is unlikely that prices will pick up at any point this year?

 

This is not meant as a dig, as I said it was commendable to nail your figures to the mast, just wondered if your views had changed at all?

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Wow, was that really six months ago. I'm still comfortable with the numbers and dates for now but I won't rule out anything. The reported average prices are meaningless really because the market has stagnated so the only sales are at silly prices with people taking advantage. I'm not certain that is sustainable but perhaps there are some bargains around. The type of sales has shifted and this has an effect on the average prices. We both understand that the 'average' is a bit misleading.

 

I've actually got something for sale at the moment and there are no shortage of viewers but nobody wants to do anything because they are frightened of their own shadow or they can't get a mortgage approval at the moment. I'm not inclined to give it away for a silly price so I'll just leave it on the market. I don't think that I am in any way unique.

 

I'm still of the opinion that the mortgage market is key and that once the current wave of institutional write downs is over we'll see things becoming a little more bullish and that will gather pace. As for the amounts, well there may be fluctuations but we'll see I guess.

 

It's a market dictated by supply and demand but without a deal of price elasticity. We know that the demand is there, and that the ability to supply it is there too. The potential for unemployment is a bigger issue right now IMO, and there are plenty of firms tightening their belts early just in case. I hope that doesn't become self fulfilling and I hope that inflation doesn't do what it looks like doing because then all my bets and predictions are off.

 

The housing market will be neither here nor there is Gordon really has screwed us over in a much deeper way.

 

But a little good news - there are reports coming out of the the USA that house sales are improving. I'll try to can dig out some concise numbers next week to see if that's the case.

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