House prices, the April 08 installment
#121
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I agree. We live on a new build, the houses are still selling although the very large ones with poor plots are more difficult to move. The fact of the matter is there is a shortage of houses, even rentals.
Before we moved here we rented for 4 months and the choice wasn't exactly overwhelming.
Swindon is growing rapidly as a commuter town to London, Reading and Bristol
I don't see prices falling too much here as Swindon was very cheap in comparison to Bristol/Reading and other local towns. to give you an idea our house was 300k more in Reading, 30 mins on the train!!
Before we moved here we rented for 4 months and the choice wasn't exactly overwhelming.
Swindon is growing rapidly as a commuter town to London, Reading and Bristol
I don't see prices falling too much here as Swindon was very cheap in comparison to Bristol/Reading and other local towns. to give you an idea our house was 300k more in Reading, 30 mins on the train!!
BTL landlords will not be able to borrow money to but the lowest tiers either, as interest rates for mortgages mean they can't even get the rent to pay the mortgage.
I don't think anywhere in the country is safe from the housing market fall. If it really kicks off, London won't be safe either.
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Like most thigs in life, the very top and the very bottom extremes will probably stay as they are - but the it will affect the huge majority in the middle.
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I am probably being naive, but it can't matter so much that house price correction is going on?
I was quite young during the last recession and didn't have a house (my girlfriend did) and it wasn't so much the price of the house that was a problem (she would stay where she was and not sell) but more the rising interest rates (up to 15%) and inflation.
So at this moment in time, the DEBT for the house is staying relatively constant (i.e. mortgage rates are not going up stupidly), so the only issue is equity in the house. That never really made sense anyway, unless you wanted to move abroad, you die or it is a second property.
So the majority of people will still be okay, albeit the the value of their house not being as it once was?
Steve
I was quite young during the last recession and didn't have a house (my girlfriend did) and it wasn't so much the price of the house that was a problem (she would stay where she was and not sell) but more the rising interest rates (up to 15%) and inflation.
So at this moment in time, the DEBT for the house is staying relatively constant (i.e. mortgage rates are not going up stupidly), so the only issue is equity in the house. That never really made sense anyway, unless you wanted to move abroad, you die or it is a second property.
So the majority of people will still be okay, albeit the the value of their house not being as it once was?
Steve
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People that brought a house on a discount Mortage in the last year or so will be at risk.
The people that have done this will likely have made this move on the assumption that in 2 years time they can remortgage and get another discount deal.
Trouble is, that in all likelyhood, they will be in negative equity in two years time and therefore will not be able to remortgage, and therefore have to pay the new non-discount rate on the mortgage.
FOr some people this will mean repossesion.
If you have no plans to move - Have a long term fixed rat eor base tracke rmortgage, then there is no reason at all that this will effect you one iota.
The only slight worry is that the housing market was so overvalued that they will never recover to the levels we have seen.
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The people affected are those who borrowed to the max and only took out a small fixed term rate (2-5 years). those that are now coming out of fixed term rates are now seeing the repayments jump by hundreds of pound (no envisioned when they took out their mortgage) as they though interest rates would always be small. In the same way they assuem house prices would always rise. This applies to BTL landlords who are now finding that rents won't pay the mortgage payments.
Those who have no need to home and have a relative small mortage will not be greatly affected. You are not losing money if you never sell. Just like you never gained money when all the house prices were rising. You only gain/lose when you sell.
The only people I feel sorry for are FTB who had no choice but to take out rediculous high mortages just to get some sh1thole of a house that several year ago was worth very little in an area that you would really want to live in. People can say they should have rented instead, buy in a lot of cases it's actually cheaper to get a mortgage than it is to rent. Example. My mortage payment (at the time) were £327/month. To rent an appartment in the same block would have cost me £550-600/month.
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It will effect everywhere Matt. Those chosing to buy a new house in Swindon still need to sell their existing home. Without FTB buying the bottom tier's in the ladder, `X` can't sell their home to buy `Y` so `Y` can't sell to buy `Z`.
BTL landlords will not be able to borrow money to but the lowest tiers either, as interest rates for mortgages mean they can't even get the rent to pay the mortgage.
I don't think anywhere in the country is safe from the housing market fall. If it really kicks off, London won't be safe either.
BTL landlords will not be able to borrow money to but the lowest tiers either, as interest rates for mortgages mean they can't even get the rent to pay the mortgage.
I don't think anywhere in the country is safe from the housing market fall. If it really kicks off, London won't be safe either.
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The FTB market will only completely dry up once parents run out of money and cant afford to pay the deposits, which will be a while let. I think there are still plenty of parents who are thinking 'FFS, you're 28, isnt it about time you pi55ed off and made your own way in the world ?'
If nothing else, it should make the next couple of series of Property Ladder quite interesting as you see 'property developer' muppets buying a house for £250K, spending £50K on laminate flooring and beige paint, then getting the agents round to value it and seeng their faces when they tell them its worth £260K now.
If nothing else, it should make the next couple of series of Property Ladder quite interesting as you see 'property developer' muppets buying a house for £250K, spending £50K on laminate flooring and beige paint, then getting the agents round to value it and seeng their faces when they tell them its worth £260K now.
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If nothing else, it should make the next couple of series of Property Ladder quite interesting as you see 'property developer' muppets buying a house for £250K, spending £50K on laminate flooring and beige paint, then getting the agents round to value it and seeng their faces when they tell them its worth £180k now.
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Credit crunch only applies to England
Scotland will follow this time. There are reductions galore on Edinburgh property at present. Did you see the feature about Bruntsfield and Marchmont dropping yesterday?
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#135
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Slightly off topic but reposessions in America are up 57%.
If lots of mortgage companies are sitting with rubbish on their hands,is it not a good time to snap up a bargain American property (I know its vulture like thinking) or is it the horrible areas only?
Obviously you wouldn't get a mortgage to do it
If lots of mortgage companies are sitting with rubbish on their hands,is it not a good time to snap up a bargain American property (I know its vulture like thinking) or is it the horrible areas only?
Obviously you wouldn't get a mortgage to do it
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There are reductions galore on Edinburgh property at present. Did you see the feature about Bruntsfield and Marchmont dropping yesterday?
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Inevitably it will follow in time
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The fact that FTB mortgage applications are at thier lowest for 34 years suggest that this is already happening
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I was a w@nky student in Bruntsfield... my friends bought a nice 3 bed flat for £80k in 1994 which I stayed in 1994-1998. I became quite good at getting a Fiat Punto into tight parking spaces too
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#139
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lol @ John ![Lol1](images/smilies/lol1.gif)
It's a ghost town now (parking wise) as all the permits are owned by the landlords -> so no cars outside as it's still all student rents, comical really and a bit of a revenue backfire apparently for Edinburgh Council ... shame
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It's a ghost town now (parking wise) as all the permits are owned by the landlords -> so no cars outside as it's still all student rents, comical really and a bit of a revenue backfire apparently for Edinburgh Council ... shame
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Average London home drops by £13,000 in a month | News
Blimey - down 3.75% in one month in London is a pretty sharp decline! A few months of this and the papers will be using the "crash" term widely!
Year-on-year figures will be negative very soon!
Blimey - down 3.75% in one month in London is a pretty sharp decline! A few months of this and the papers will be using the "crash" term widely!
Year-on-year figures will be negative very soon!
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Well they can only go so low, I am sure at some point people will stop buying then start buying and it will settle at a new reduced figure and the whole process will start again usually as cycles do.
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I would like to think only the greed-driven BTL'ers will get their fingers seriously burnt with the falls, but sadley a lot of FTB'ers - many of whom will have young families - are going to suffer.
Those giving advice like "do whatever you can to get on the 'ladder' ", "buy with a few friends, borrow money off parents" - ie Kirstie Allsop etc should take some of the blame for that. She was on radio 4 at the weekend desperately trying to talk up the market for her own gain
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Last edited by Petem95; 15 April 2008 at 07:42 PM.
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I agree Pete, but sadly at those times {recently} who could forsee this happening really, every one thought times were good and would remain good for pretty much ever, if I could foresee the future I wouldn't be an estimator ![Wink](images/smilies/wink.gif)
At the end of the day all people can do is try to mimumise the impact on their own lifestyle / finances etc. I know from my own personal POV we have looked very closely at our future plans, we are however one of the lucky ones who only take calculated risks and have never stretched ourselves so our losses hopefully will be low, but it all adds to the fun of it all![Smile](images/smilies/smile.gif)
However I would hope that the comment about greed driven BTL'ers is a generalisation as alot are only trying to make a modest sum {us included} but I do think that some of them do not care for others....
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At the end of the day all people can do is try to mimumise the impact on their own lifestyle / finances etc. I know from my own personal POV we have looked very closely at our future plans, we are however one of the lucky ones who only take calculated risks and have never stretched ourselves so our losses hopefully will be low, but it all adds to the fun of it all
![Smile](images/smilies/smile.gif)
However I would hope that the comment about greed driven BTL'ers is a generalisation as alot are only trying to make a modest sum {us included} but I do think that some of them do not care for others....
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http://www.nationwide.co.uk/hpi/downloads/All_prop.xls
Here you go.
Average house prices from 1977 onward split into quarters.
If you look at it, you can see that it very much depends on where you live as to what the impact of a crash is (look at 1988 - 1992/3)
If you look at the UK as a whole then the crash represented about a 20% drop.
London obviously takes the biggest hit, because house prices where so far ahead of anywhere else - Whereas the North generally didn't fair too badly. It fell, by about 10% -nowhere near the 30% we saw in London.
The South , if history is anything to go by, stands to be hit far worse by any crash than the North.
Here you go.
Average house prices from 1977 onward split into quarters.
If you look at it, you can see that it very much depends on where you live as to what the impact of a crash is (look at 1988 - 1992/3)
If you look at the UK as a whole then the crash represented about a 20% drop.
London obviously takes the biggest hit, because house prices where so far ahead of anywhere else - Whereas the North generally didn't fair too badly. It fell, by about 10% -nowhere near the 30% we saw in London.
The South , if history is anything to go by, stands to be hit far worse by any crash than the North.
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It's easy to keep track of this via the "average" house price. In 1995 it was £51k, in 2005 it was £159k. In 1Q2008 it was/is £179k (note a drop from £184k in 4Q2007). Keep an eye on Nationwides website & there can be no arguement can there?
TX.
Edit - great minds Pete
TX.
Edit - great minds Pete
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