How far will house prices fall [volume 4]

[Chicken Chaser]

martin84 said:

Falling house prices are excellent news.

For all those not already in the market and havent bought one in the last 15-20 years/have no intention of selling.

Reduced mine today, not a great deal admittedly but its less than what I paid for it. Dont house prices only go up? I've lost more on this place in 6 years than I have on my cars & bikes in the last 6 years.

[martin84]

Exactly. It depends on whether you're selling or buying. The Daily Mail tend to speak from the sellers point of view.

Personally I think it should be like cars and the house depreciates as it gets older.

[turbobloke]

The interplay of supply and demand factors determines the price of used cars and used houses, just a personal thought.

[Deva Link]

pat_y said:

couple of agents have said that some people still think it's 2005 with all the money in the world available, make offers on houses without consulting thier bank/building society and then recieve a nasty suprise when the mortgage is applied for.

I thought you might say that. It's what I'm hearing too.

It was discussed towards the end of the previous thread but certain PHer's flatly denied it and reckon money is easily available at huge salary multiples.

[GlenMH]

martin84 said:

Personally I think it should be like cars and the house depreciates as it gets older.

I think you might want a trip to Japan to see what kind of property market that produces, along with the amount of building work that is required to continually replace housing stock that is literally unsellable because it is "too old".

[pat_y]

Deva Link said:

I thought you might say that. It's what I'm hearing too.

It was discussed towards the end of the previous thread but certain PHer's flatly denied it and reckon money is easily available at huge salary multiples.

I'm sure that these is still lots of money available, providing you meet the right criteria, sadly average joe on the street is unlikley to fit the profile. I missed the end of last volume on this topic so apologies if this is raking over old ground.
(edit for poor spooling)

[Chicken Chaser]

pat_y said:

Deva Link said:

I thought you might say that. It's what I'm hearing too.

It was discussed towards the end of the previous thread but certain PHer's flatly denied it and reckon money is easily available at huge salary multiples.

I'm sure that these is still lots of money available, providing you meet the right criteria, sadly averege joe on the street is unlikley to fit the profile. I missed the end of last volume on this topic so apologies if this is raking over old ground.
(edit for poor spooling)

Average Joe should still be able to get an average joe house, its just he's not going to be able to bankroll Tarquins house with a 105% mortgage.

The problem I have with selling mine now is there are people who appear to be close to repossession around here so they are literally slashing their prices just to get rid of the house. Its probably re-dressing the balance, but it doesnt nothing to help an already grim looking situation.

[Digga]

GlenMH said:

martin84 said:

Personally I think it should be like cars and the house depreciates as it gets older.

I think you might want a trip to Japan to see what kind of property market that produces, along with the amount of building work that is required to continually replace housing stock that is literally unsellable because it is "too old".

If you build houses lke balsawodd gliders, they don;t take much demolishing.

Arguing houses should depreciate ignores two facts:

1. Build is only part of the value - the land is significant and often appreciates
2. Not all contemporary houses are being built to last - we all know this

[richardxjr]

scenario8 said:

Guide Price, OIRO, OIEO, Price Range etc. Hence my use of ""price"".

Guide Price. What's all that about? ONE agent here (out of about 100) quotes these. See an advertised house for 'Guide price 320-350' How many think 'oooooh I know I'll, offer 350' ?

Or is it marketing speek for 'It was worth 350 in 2006 but you might as well offer 290'?

[Pork]

Chicken Chaser said:

The problem I have with selling mine now is there are people who appear to be close to repossession around here so they are literally slashing their prices just to get rid of the house. Its probably re-dressing the balance, but it doesnt nothing to help an already grim looking situation.

Where's 'around here'? So far, I've not seen any of that round my way (SE, predictably).

[Chicken Chaser]

North East....Ill say no more

[scenario8]

richardxjr said:

Guide Price. What's all that about? ONE agent here (out of about 100) quotes these. See an advertised house for 'Guide price 320-350' How many think 'oooooh I know I'll, offer 350' ?

Or is it marketing speek for 'It was worth 350 in 2006 but you might as well offer 290'?

It's just a marketing tool, that's all. It can help generate interest in a property and invite offers that might not have happened if the property was merely marketed at (for example) £350k. Contrary to many peoples' beliefs, and often regurgitated in this and previous threads on the matter, many buyers will simply not visit a property advetised at a price outside of that they consider to be their price ceiling. Thus those buyers may dismiss a property they might be interested in buying if only the property had been marketed to them differently.

Valuing is not a science either, so outside of artifical pricing points (such as £250k) no agent knows exactly what a property is worth anyway so any advertised price is in effect a guide anyway. (Commercial valuations notwithstanding).

Finally, one can offer what one likes for a property. If a property is offered as a guide of £320-350k an offer of £320k might be enough, it might be £50k more than you might have needed, or it might not get you anywhere at all. Every situation is different.

[GlenMH]

Digga said:

If you build houses lke balsawodd gliders, they don;t take much demolishing.

Really? You might want to read the earthquake proofing standards that all new builds conform to before making remarks like that. I am horrified how little structural support goes in to new builds (commercial AND houses) in the UK compared with the equivalents in Japan. Despite that, new builds there are still only deemed to have a 30 year lifespan....

[P-Jay]

Chicken Chaser said:

martin84 said:

Falling house prices are excellent news.

For all those not already in the market and haven’t bought one in the last 15-20 years/have no intention of selling.

Reduced mine today, not a great deal admittedly but its less than what I paid for it. Don’t house prices only go up? I've lost more on this place in 6 years than I have on my cars & bikes in the last 6 years.

Sorry to hear that, but for far too long homeowners have been winning and anyone trying to join them losing, well in fact everyone was losing really except the banks - try to take heart from the fact that if you're upgrading the price gap between the home you have now and the one you want is narrower.

A falling market is good news for me too, I've avoided posting in the previous thread, most people's opinion is wholly based on what they WANT to happen and I'm certainly no different.

I'd like to see it re-balance to the point it was when my parents bought their first place - Dad full-time working, Mum part-time (ok that means both working fulltime these days) with reasonable job allowed them a mortgage and income to buy a little 3 bed semi AND have a life outside of it - as it stands that house sold in 2010 for 250k (they paid 35k a few decades ago) now you'd need a £37.5k deposit and a 70k combined income or thereabouts to buy the same house - inflation corrected my parents were no where near that level when they started out.

I take heart from the fact that a slightly scruffy house that my OH was interested in 4 years ago but couldn't afford has been completed remodelled and now for sale for 20% less than back then, and that and Estate Agent I know through work is telling me 90% of asking price offers are now the norm and are being accepted.

I can't see the situation changing as long as the whole self-cert door is closed, there are no 95%+ affordable mortgages available to new buyers or government incentives - Mum, was an Estate Agent for 15 years - and her rule "no first time buyers, no market" is as true now as it ever was.

[Derek Chevalier]

Who'd have thought it?

http://www.moneymarketing.co.uk/mortgages/fsa-forb...

“I would probably say some forbearance has been overused. Some forbearance has left some customers in a very difficult position – and we are probably talking about hundreds of thousands of customers in a difficult position in the future. It has been an overused tool in some circumstances.”

[turbobloke]

P-Jay said:

...but for far too long homeowners have been winning and anyone trying to join them losing...

In the housing boom years to mid-2007 it was relatively easy to join, much easier than for many of those who joined before the credit strings were loosened.

As far as the house price trend is concerned, as soon as those people make it and 'join', would their sentiment as homeowners not switch to being rather annoyed at losing in their new position in any way?

It may be annoying to some and more pleasand for others but the marketplace is what it is for everyone. Obvious but no less true. We can maximise our own chances of doing what we want to do, and little more.

[Melman Giraffe]

I think this tread should be -


When will mortgage interest rate start to rise?

This will IMO cause prices to fall due to mortgagees unable to pay higher amounts thus more property coming on the market.

[Derek Chevalier]

Melman Giraffe said:

I think this tread should be -


When will mortgage interest rate start to rise?

This will IMO cause prices to fall due to mortgagees unable to pay higher amounts thus more property coming on the market.

The Government will think of another fudge so stop the pack of cards collapsing.

[turbobloke]

Derek Chevalier said:

Melman Giraffe said:

I think this tread should be -


When will mortgage interest rate start to rise?

This will IMO cause prices to fall due to mortgagees unable to pay higher amounts thus more property coming on the market.

The Government will think of another fudge so stop the pack of cards collapsing.

They may well not have to do much thinking before 2017, so whichever lot is in at the time this lack of a requirement to do any purposeful thinking can only be helpful...based on the fact that when they 'think' and meddle some more it usually ends up worse.

[JagLover]

Melman Giraffe said:

I think this tread should be -


When will mortgage interest rate start to rise?

This will IMO cause prices to fall due to mortgagees unable to pay higher amounts thus more property coming on the market.

Good Point

and the answer is only when lax monetary policy starts to produce inflation that is too high even for the BOE to ignore.