I'm aware of all that, just find it strange that people expected falling house prices to lead to houses being more obtainable, when it was always going to be a conseqence of the opposite, and that some people are still insisting there's plenty of mortgages around for those with reasonable deposits, the bottom line is that there isn't.
House prices..
- Thread starter fendi
- Start date
I'm aware of all that, just find it strange that people expected falling house prices to lead to houses being more obtainable, when it was always going to be a conseqence of the opposite, and that some people are still insisting there's plenty of mortgages around for those with reasonable deposits, the bottom line is that there isn't.
Depends if youve been saving combined with a large deposit, house prices dropping is always a good thing, a few years less in repayment terms.
btw if people have been spending on credit cards its their problem, others like myself have 0 debt.
Last edited:
no youll end up having more rather than less.
It all depends on your situation I guess. I agree that for some, the changing mortgage situation hasn't improved things in the short term for those looking to get on the ladder (it was never going to). However, that's not to say things haven't improved for some. Those who had a sufficient deposit to obtain a mortgage previously as well as now are now far better off following these reductions in prices. Also, if we factor in the medium/long term cost of property, you must surely appreciate that this correction leads to houses being more affordable (but not necessarily more obtainable).
Associate
- Joined
- 20 Oct 2004
- Posts
- 1,485
How does that work?
Whist it isn't that easy just now - this current regime is not going to be long lived! We'll have a couple of year or so of prices falling at ~2% per month then things will settle down a bit.
Whist the process of falling doesn't make housing more obtainable - when they have stopped falling they will be more obtainable than they were in 2007.
To say the house prices crashing isn't making housing more obtainable is a short term view, wait 'til the crash has stopped - prices won't just jump back up to 2007 levels in a week, there will be least a few years where they are more obtainable than they were in the past.
Well if the house is worth a million now and in the crash its worth 500,000 then you are better off as you'll have another 300k tax free for any cash / other assets if your a couple.
Here's December's report from Nationwide:
http://www.nationwide.co.uk/hpi/historical/Dec_2008.pdf
Down another 2.5% in December, down 4.2% in the last 3 months. There have been 14 consecutive months of falls now. The average price is now £33,996 or 17.7% lower that the peak in October 2007. In real terms that's well over 20%.
http://www.nationwide.co.uk/hpi/historical/Dec_2008.pdf
Down another 2.5% in December, down 4.2% in the last 3 months. There have been 14 consecutive months of falls now. The average price is now £33,996 or 17.7% lower that the peak in October 2007. In real terms that's well over 20%.
Associate
- Joined
- 20 Oct 2004
- Posts
- 1,485
I don't mean to be rude but can you not see why that maths is faulty?
Sorry managed to miss this for 4 days,
I don't mean to imply that houses are in anyway more obtainable now, hell it'd be stupid to buy now for many reasons, the constant price decreases, worry about being made redundant and the general instability of the economy now (and never quite knowing what mad plan GB is gonna come up with next
)But, it does show that the 0-10% deposit based mortgages account for a massive majority of the dropped mortgage products, in fact mortgage products available that require >15% deposit are relatively healthy still (down yes, but not by a massive margin, comparing like for like).
I would argue that the availability of mortgage 'products' has only a small amount to do with the continued crash, both negative sentiment (how many consecutive months have halifax/nationwide reported dropping house prices now? >12?) and much more importantly a return to sensible lending which isn't generally enough to buy the kind of products people are used to wanting/buying
Halifax I think it is also reports on the average house price Vs incomes multiples, according to their figures the LTA is 4x, the peak was 5.8x (iirc) and the current is around the 4.8x, we've still got a fair way to go, even assuming it doesn't overshoot, and once everything works itself out house prices will be both vastly cheaper, and mortgages will start to become available more readily, just hopefully not back to the reckless 2007 days...
I haven't looked at the prices around here for a few months, but had a look today. Prices have dropped a fair amount. They hadn't really dropped off much in the second half of last year, maybe a trimming of asking price here and there, but now they are £20-30k less for 2 and 3 bedrooms.
Last year a good 2 bed was around £130k and 3 bed would be £150k+ but now they are £110k and £120-30k ish.
Last year a good 2 bed was around £130k and 3 bed would be £150k+ but now they are £110k and £120-30k ish.
I'm not convinced about housing affordability for FTB not having improved (although obviously, it's not improved by as much as you would expect based on the base rate changes).
I just had a very quick look around and was able to find a basic SVR mortgage with no arrangement fees or ERC at 4.99% with max 90% LTV. There may very well be better products out there on the market. With house prices having dropped over 15% that means that a typical £200k property from back then would now only cost £170k or less. And thus it would also be exempt from stamp duty.
Go back 18 months or so when the base rate was 5.75% and you would struggle to find a fees free mortgage with 90% LTV below 5%. You'd have to pay £2k in stamp duty and your deposit would also be £20k rather than £17k. And having borrowed £180k instead of £153k, your monthly repayments would be higher.
Of course in the long term one wouldn't expect rates to stay as low as 1.5%. So you probably wouldn't be wanting to stick with that SVR for ever. And mortgages are undoubtedly "worse value" than they used to be (due to increased fees and bigger margins between base rate and offered rates). But in terms of 'getting on the ladder', I don't think the picture is especially bleak compared to 2007. With an 20% deposit and £799 fee you can get a much more attractive 3.39%, a figure unheard of back in the day.
Ironically the change in the stamp duty threshold wasn't all that well received when it was announced, but as house prices continue to fall, more and more houses will become exempt.
I just had a very quick look around and was able to find a basic SVR mortgage with no arrangement fees or ERC at 4.99% with max 90% LTV. There may very well be better products out there on the market. With house prices having dropped over 15% that means that a typical £200k property from back then would now only cost £170k or less. And thus it would also be exempt from stamp duty.
Go back 18 months or so when the base rate was 5.75% and you would struggle to find a fees free mortgage with 90% LTV below 5%. You'd have to pay £2k in stamp duty and your deposit would also be £20k rather than £17k. And having borrowed £180k instead of £153k, your monthly repayments would be higher.
Of course in the long term one wouldn't expect rates to stay as low as 1.5%. So you probably wouldn't be wanting to stick with that SVR for ever. And mortgages are undoubtedly "worse value" than they used to be (due to increased fees and bigger margins between base rate and offered rates). But in terms of 'getting on the ladder', I don't think the picture is especially bleak compared to 2007. With an 20% deposit and £799 fee you can get a much more attractive 3.39%, a figure unheard of back in the day.
Ironically the change in the stamp duty threshold wasn't all that well received when it was announced, but as house prices continue to fall, more and more houses will become exempt.
Last edited:
Just had my house valued. The agent said we should put it on the market at around the same price as I bought it for in March 2007. But expect to get up to 20% less. I actually expected it to be worth even less but it's a large rare period family property in a very desirable road and area which apparently means it is still relatively desirable (if anything is right now).
Christ knows how much a two bed newbuild must have crashed so far.
Christ knows how much a two bed newbuild must have crashed so far.
Soldato
- Joined
- 22 Oct 2004
- Posts
- 9,087
- Location
- Berkland
You might find that you get fairly close to the asking price if thats the case. People still have to move due to changes in job... yadada... If you have a nice house in a nice area then the hit isnt going to be that much.