Monday, Sep 17, 2007
Guardian reports top of the market
Guardian: Should I buy a house now?
Given the current turmoil in the loan markets, the problems at Northern Rock, and further evidence that the housing market is cooling fast, it takes strong nerves to complete a purchase this week. If you are one of those currently going through it, then you've probably spent a sleepless weekend. After several years of strong house price growth, one word sums up the current market outlook: uncertainty.
Posted by dan @ 11:52 AM (2083 views) Add Comment
23 Comments
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1. dohousescrashinthewoods said...
wow.
2. wage slave said...
I think that we're now well and truly underway.
3. Tulipmania said...
The Rightmove 'yearly' survey appears
1) to be based on 13 months not 12
and
2) to be added up incorrectly.
Thus this month's survey includes both September 2006 and September 2007. According to my calculations if you add up all the 13 months it comes out as 9.4% growth not 9.6%.
These errors seem so basic, I wonder if I have somehow got their methodology wrong but I can't seem to see how. Anyone got any ideas?
4. Tony Marshall said...
Enjoy the ride!
5. dohousescrashinthewoods said...
My only reservation is that there is "too much" talk in the media. We may find everyone gets tired of talking about it in a couple of weeks, sees nothing much has happened and writes it off.
I think it could be quick, but not "media quick" (months rather than days). Then again, we may get a steady and increasing stream of bad news, which would keep the tabloids talking.
6. tony marshall said...
If people start to worry about other banks, the whole game is up - big time. Although could be positive for house prices in the short term, as people perceive them as safer than banks. But prices will come down as lending dries up completely. What a mess!
7. Tttonyyy said...
Just bought one last Wednesday. No worries at all when you are moving from one house to another and have a low LTV. House price simply affects costs in moving (estate agent fees + stamp duty), so for movers there is little to worry about. Only affects first time buyers.
8. wage slave said...
If Northern Rock is one of the more 'highly-geared' banks then it stands to reason it's one of the first to get into trouble.
As the credit-crunch continues the question is who's next - and where will it stop.
9. Renterabroad said...
Thing I don't understand, is why in Italy people aren't horrified - even now - by the fact that banks are advertising 40 year long, 100% mortgages with teaser rates on the same online newspages containing reports on Northern Rock. Out here, where property prices have ballooned, the average man and woman on the street appear totally unaware of subprime news and disinterested in the macro economy, ECB interest rates etc.
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10. Davros said...
As soon as people expect house prices to fall, they will.
11. planning4acrash said...
ws, yes, this is all about leverage now, not bad debt. But the liquidity problems will result in more expensive money, which will cause bad debt in the longer term.
12. Bunnykins said...
Alliance and Leicester's share price is also bombing this morning. How long before any others are prepared to stick their hands up? Aren't they similarly 'mortgage-loaded' on their business?
13. maddison said...
Northern rock borrowed money to lend to other people. Now that is really risky. They only have themselves to blame!
14. P. Doff said...
Maddison. '---Northern rock borrowed money to lend to other people.---'
Many banks lend out shedloads more than they have on deposit. It's how they operate and is not unusual - even Halifax have (not to mention Alliance & Leicester et al).
15. mrmickey said...
Does anyone know if building societies are any safer than banks with this shambles going on.
16. Housecrashwallop said...
Tttonyyy - thats not true. I sold my house and am sat with 200k in the bank renting. I am not going to buy right now, I am going to watch the slide, bide, then buy - more brick for your buck. I know 4 others just where I am living doing this.
I don't like all this sanitising of the word 'crash' e.g 'correction', 'crunch'. Its a crash form where I am standing. Friends of mine had their beautiful flat on sale in May - no takers, now reduced asking by 15% , still no takers, going into autumn/winter time.... papers full of stuff for sale...
17. Manc said...
Living in Manchester it is hard not to notice the hundreds of for sale and to-let signs positioned around the hundreds (maybe thousands) of empty flats. Apartment blocks are still being built at an alarming rate but who is going to live in them.
Its all down to greedy buy to let investors, there 3 bed terrace has increased in value so they think it is good to buy a flat to rent out? they dont think that they may not be able to rent it out because there are thousands of other empty flats at the same price.
We are in for a rough ride, thank god I am debt free!
18. European-bear said...
Northern Rock had a big chance of the mortgage market (13% Iread somewhere). Add to that A&L etc etc. All these have been chasing the market up by giving huge loans to people who could not afford it. And with huge mortgage offers(x5, X6 salary) etc of course you outcompete in the bidding war and prices go up. Now with the credit crunch such rediculous mortgage offers will evapourate leaving a huge drop in demand. The price of a house is not only opinion, but what people can afford. With excessive multiples and sub prime lending gone the price that can be afforded is less...so the price will have to come down....HPI is all about available credit so that one mug can out bid another with a bigger millstone round their neck....
19. Tttonyyy said...
Housecrashwallop, here's wishing you good luck with your predictions!
Despite owning a house I could never afford to buy as a first-time buyer, a "correction" to me simply means that my children stand a better chance of buying when they're older. I'm of the opinion that if you are happy where you live and can afford to pay for it, then the notional value of your house is irrelevant (hence I'm not too concerned about the current market conditions). Property speculation for the purpose of gain is for those, like yourself, that are braver than me. So I sincerely wish you good luck. :)
20. Yoss said...
Will the local proprty rag start looking more like the yellow pages every week? and lots more 'To be sold at auction' and 'No Onward Chain'.
Any BTL wanna be or FTB looking to get into the market, I would guess is going to take a big step back to see how this is going to play out.
21. Novicepete said...
Anyone remember this video, it was posted on this site before I think.
http://www.speculativebubble.com/videos/real-estate-roller-coaster.php
I'm beginning to feel quite sick!
22. inbreda said...
So now the government is planning to use MY TAX MONEY to bail out NR, possibly to the point of nationalising it.
I really really hate this government and the system that encourages and rewards financially irresponsible people.
23. david20040_0 said...
Hear hear Inbreda