Wednesday, Sep 26, 2007
The tide is turning!
EveryInvestor: Property market looks set to turn
RICS remarked on a 32% rise in repossessions in the second quarter of 2007. It predicted repossessions could rise by a further 50% to 45,000 in 2008. A significant number of these are buy-to-let properties where landlords are throwing in the towel as a result of rising mortgage interest rates. It’s likely that house prices will see their first monthly fall in the next few months, and at some time in 2008, for the first time since 2000, we’ll see a year-on-year decline in average prices. For long-term homeowners, this is of no great importance, but it will be surprising if we don’t soon see a lot more highly geared BTL investors heading for the exit.
Posted by confused76 @ 11:41 AM (758 views) Add Comment
9 Comments
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1. dohousescrashinthewoods said...
Who was it who called the crash the other day? I am joining your camp.
I think next month's numbers (from the various sources) will be very interesting and, if BTLs are really dumping right now, the following month should be even bigger.
The numbers that showed a huge rise in savings I think reflect people banking the proceeds of sales. I don't think Brits have suddenly got any extra cash to save.
2. Davethebox said...
I think that the sheeple will start panicking and trying to sell their houses before the prices drop just like the Northern Rock savers panicked. This is human nature. People will cause the crash just like they also caused the petrol crisis by panick buying. I think it's inevitable as confidence drops.
And I agree that Brits haven't got any extra cash to spend/save. Wage inflation is low and people can't borrow to spend anymore, so where would the money come from?
3. inbreda said...
"if BTLs are really dumping right now"
I reckon that's probably an understatement dhcitw
4. Darrude said...
I've been a massive critic of All Rics reports until about 2 Weeks Ago, They have been saying boom, boom, boom, but now, Gloom.
Maybe they have visited this site.........
5. shipbuilder said...
I can't see why any sensible BTL investor, whether they're 'in it for the long term' or not, wouldn't want to take profit on at least some of their portfolio, given the general consensus that prices will flatten or fall. Therefore we can be almost certain of a significant increase in the number of houses hitting the market. I really can't see any scenario right now, even if interest rates are slashed, that would stop a market fall. I predict for the next couple of years, as per the US now, regular articles from the VI talking heads about how 'the market's bottomed out and there's never been a better time to buy before the upturn happens'. Unfortunately for them, the banks will only lend so much and as we've seen on this site over the last couple of years, sentiment is difficult to turn. I think we'll have a generation burned by property that will be very difficult to convince back into the market in the numbers we saw in this bubble.
6. planning4acrash said...
Shipbuilder, house prices continued to fall last time around after rates were slashed, after which time the falls reduced in intensity. This time could see falls accellerating because there will be inflationary pressures building and less room to drop rates. Rates may indeed have to rise again. Did you hear that egg prices are going up 50% as a result of the higher cost of wheat?!
7. Sds said...
to shipbuilder (and all):
"VI talking heads": what does VI means?
thanks!
8. voiceofreason said...
VI=vested interest :-)
9. deepak said...
As the millions are now remortgaging at the increased price you would see more fun happening at the begining for 2008.
As these people would have missed 2-3 repayments. And then you the banks will start repocession.
I will also see some banks re pocess quickly, so that they can sell the property at the top of the market.
Foreclosures will lead the serious price falls.