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| Celtic Indian |
Have house prices hit the ceiling ?The average price of a house in the UK is now below �150k.This is a drop of 17.6% on last Feb and the drop is still accelerating.Do you think house prices hit the ceiling back in Oct 2007 ? I think it will be long time when house prices return to Oct '07 levels,if ever.And it will be a long time if they ever exceed them.RBS today announce the biggest ever losses in British corporate history and they're toxic debt (bad debt that will not be repaid) if even more staggering.�325 billions !! Banks are going to have to be more prudent in their selection of who the lend money to.Gone are the days of the 100%,110% and 120% mortgages.First time buyers will now have to have a fairly large deposit in place before the apply for a mortgage and I don't think many do.This will have an effect in house prices rising.Banks lent out all the money the had and now they're skint.They cannot lend extravagant amounts of debt to people anymore.To me,this says that there is no more money in the system to stimulate the housing market. If there is no more money to give out,then prices cannot rise.They have to come down.A painful re-ajustment ! |
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| Lord Pitsligo |
Re: Have house prices hit the ceiling ?
Its only painful if you have negative equity and want to move or you bought as an investment. If you're living in your home it should be of little consequence. And if you're planning to buy its fantastic news, although I'd wait at least another couple of years before buying. It was the rampant and unchecked house price inflation that was painful. |
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| agentmancuso |
Re: Have house prices hit the ceiling ?
But the problem is the money didn't exist in the first place. Credit isn't money! |
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| Holebender |
You don't think prices can rise again? Wait until the government starts printing money in a vain attempt to get the economy going. | ||||
| azzuri |
Disagree, they can't print enough money to fill the black hole without creating hyperinflation, and they are going to realise this pretty soon. This is generally a private problem within the banks, not a public one. They would need to print £10trillion unbacked by bonds IIRC in order to fill the black hole, and by that point our currency would be worthless. I simply can't see them trying it. 50% more falls to come in the housing market as it overshoots to correct from the initial overshoot on the upside, IMO... |
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| Celtic Indian |
Interesting that RBS are now promising £1.5bn of loans to try and stimulate the Scottish housing market.I thought declining house prices would be a good thing,but this "stimulus" could just send house prices back up again,and we'd all be in an even worse situation than we are just now.
Do these people really now what they're doing ? |
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| Lord Pitsligo |
It won't work. Property is no longer seen as a sure thing for investors, and the 100% BTL mortgages were really helping to inflate the market. Property is crashing, and it won't be stopped. |
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| azzuri |
Exactly. The 100% mortgages and BTLs were going out the door whilst prices were rising. With higher unemployment + higher deposits needed to buy + consumer confidence conpletely trashed, this creates much lower demand for houses than there was 2/3 years ago. We're also going to see a glut of forced sellers over the next six months which means there won't be a 'floor' for prices and they'll continue to fall due to loan-to-value ratios dropping. The great house price crash will continue to go until we see double digit wage increases in my opinion. |
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| Scott2006 |
One headline figure, from the paper that is a parody of the dailymash, did mention the average house prices for certain towns and the percentage drop so far.
Kilmarnock (Sep. 2008) £156,500; (Feb. 2009) £115,000; 26.5% Drop In Price £41,500 http://politicalbetting.com/index...prices-that-eventually-decide-it/ |
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| azzuri |
Des Browne; will, rightfully, be shitting himself. Won't be surprised if he's parachuted into a 'safe' seat for the GE. | ||||
| Rinty |
Brownes finished surely, the SNP have been growing in East Ayshire for years. First it was council seats in Kilmarnock area, then council seats in the cumnock area thanks to STV, then the MSP seat, taken from Margaret Jameson and Des will be next to go. I have no doubt. | ||||
| agentmancuso |
Why not help make it happen 
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| Lord Pitsligo |
Lets not forget its not just the 100% mortgages that are finished, the self certification "liar" loans are history too. So it'll be back to 3.5 x salary for mortgages again now that banks are actually checking people's incomes. |
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| Reluctant Hero |
Only for about 10 years, until we totally forget about this experience and begin to get reckless again! |
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| Lord Pitsligo |
I'm not so sure, there's already talk from the FSA of capping it at 3 x salary. 10 years seems too short an estimate. I suspect when everyone who was an adult during this crash is dead then society will make the same mistakes again - there does seem to be a cycle with that time span. We had the Great Depression kicking off in the 30s and there was the Long Depression that started in the 1870s. This seems to be the latest in the cycle. |
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| jamesieboy |
I am pleased to see house prices coming down.
Surely its a good thing if prices come down? And will that not help those who are young and are going to buy a house for the first time? I, myself, will lose out but I haven't got a mortgage, so I suppose I'm lucky as it's a bit like ahaving a millstone round your neck. |
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| jamesieboy |
3.5 x salary?
If people have a salary of £15000 then that amounts to £52,000. Pardon my ignorance but how many properties could you get for that price nowadays? |
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| Lord Pitsligo |
Come back in a years time and ask again. You'll find there's more. |
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| azzuri |
You wont really lose out in any meaningful way, though, since you still own the same house. Values are only realised when sold, until that point it's simply a paper profit. |
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| azzuri |
We should start our very own 'doomster's club' LP. 
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| Lord Pitsligo |
I prefer "financial realist" 
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