Turning Bearish on property..
- Thread starter Solari
- Start date
Kitchster_uk said:
You would say that as you are a bank manager, your business is reliant on your " customers" going in to debt in the first place!
As for prices not dropping at the moment, you have to be joking, they are falling all over. Forget the statistics from the BS they are only based on the LIST price of a property, not what it has been bought for!
When eveyone is priced out the market, the demand is just not there, hence prices MUST fall. Otherwise there are no sales! The conterary is true for a bull market - there are no sellers so the price MUST increase to accomodate the buyers!
Last time I checked, the average wage is almost half what it should be under historical conditions to ensure house ownership.
This market will come crashing down, real income is falling drastically in relation to provision of services and goods. Believe you me, it will not last forever! Just like it has NEVER EVER lasted in the entire course of history...oh wait its different this time....now where have I heard THAT befoer...oh yes! From bank managers and those with a vested interested in selling DEBT!
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Tenzen said:
Agreed... in the areas I'm looking, it seems a lot of people aren't willing to pay the prices. There are plenty of drops in asking price by about 15K or so locally. I'm hoping it'll continue, as places that were out of my budget before are now creeping well into my boundaries
Solari said:Agreed... in the areas I'm looking, it seems a lot of people aren't willing to pay the prices. There are plenty of drops in asking price by about 15K or so locally. I'm hoping it'll continue, as places that were out of my budget before are now creeping well into my boundaries
There is a long way to go before they are affordable for most people. Prices would have to drop 30% in my area for me to even have a chance to afford and that is with twopeople with above average earnings!
In any crash scenario you want to be asking for 20-30% off list price, eitehr that or go directly to auctions.
Tenzen said:
Depends what you define as a crash
http://money.guardian.co.uk/houseprices/story/0,1456,898123,00.html
1980's it was 27% down in London and 13% down accross the country. If you bought before 2003 you should still be into the positive as prices have risen by more than that. So your theory of this awful crash is somewhat dashed to homeowners of 4yrs+. Further look at New York and Tokyo in comparison to London. In London a high earner can still buy a property, in NYC and Tokyo rental culture is dominant as no-one can afford the extremely high prices.
Further, as Mr bank manager pointed out, the economy is run far better now then it was back then. Also banks lending 100% mortgages would suggest that a slump involving negative equity would be terrible with nearly all those 100% being quite severely screwed. So it must be avoided.
There has been talk of a crash for YEARS. Currently in America and in the UK weaker buyers are unable to meet repyaments due to the now higher interest rates - so prices may drop slightly as reposessions come onto the market. But it's not as if there are 1,000s of repossessions, they are a severe minority.
Interest rates were low for years that it was inevitable they would rise. They have now done that butm as previously said, this will level out.
I think one important marker will be next years budget, the next general election, and the first budget of that premiership. Some economic stability, dependant on the US as well, should hopefully follow.
But i shall be looking to buy in Spring 2008.
Mr^B said:
Winrar. I'll stick my oar in here, i work in the water industry and you'd be surprised how many developers get their applications for housing developments declined on service grounds. The whole UK is suffering under the grips of ageing infrastructure. You have water mains which are up to 80 years old in many parts in the UK, sewer systems which can be even older. There is literally no capacity to add in extra housing.
At the moment and for the forseeable future population growth will be outstripping house development. It's simple, more people born than houses built = lack of supply. Lack of supply increases demand and cost.
Bite the bullet, stop peeing your money down a drain (literally) and buy. For the next 10yrs at least i'm confident the housing market will grow a bit more then stabilise.
Soldato
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Tenzen said:
Partially, but also as reliant on savings balances. Mortgages form less than 5% of my annual plan
Tenzen said:
Property is rarely bought for the list price, simply because it is human nature to haggle and get a 'deal' therefore list prices is always slightly inflated. That said, I took full list for our flat last year and got a good chunk off our house. Believe me, I sign off every mortgage in my branch and they ain't getting cheaper!
Tenzen said:
Not everyone is priced out of the market, otherwise the estate agents would be going out of business and I wouldn't be releasing a good few new mortgages a week. See my point re: family income.
Tenzen said:
And once again, demographics have changed - many many more dual income families, plus with family tax credits the average income even at the bottom end of the market is markedly higher than any point in history.
Tenzen said:
The Bank of England controls interest rates now, not some numpty politicians. THe monetary policy committee is made up of people who KNOW what they are doing and are paid a lot of money to get it right. List of the members and their qualifications for the job is below. 'Selling' debt as you put is is really for sub-prime lending and not something I'm involved in. FSA regulation around ANY secured debt is very tight indeed and dodgy lenders will lose their credit licence - simple. Sub-prime US lending has caused a recent wobble in the markets but they'll recover. Sub-prime UK lending will be the first to suffer over here with the likes of Norton/Ocean/First Plus/Nemo etc ending up in bother. Mervyn King has already stated hw won't keep intrest rates down just to bail them out and Ben Bernanke of the Fed has said similar recently. However, inflation is currently .4% above target, meaning that the economy is still bouyant and that simply would not be the case if house prices were 'dropping like a stone'.
Mervyn King, Gov. BoE
Rachel Lomax, Dp Gov. BoE
Sir John Gieve, Dp Gov. BoE
Kate Barker
Charles Bean
Prof Tim Besley
Prof. David Blanchflower
Dr Andrew Sentance
Paul Tucker