Sunday, Oct 28, 2007
UK House Prices - Primary Reasons For a Sharp Fall
Market Oracle: UK House Prices - Primary Reasons For a Sharp Fall
1. Buy to Lets Mass Selling
Posted by david20040_0 @ 08:23 PM (1095 views) Add Comment
9 Comments
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1. sovietuk said...
"UK repossessions rose to 17,000 by the end of 2006, and are on target to to more than double this year to over 40,000.The expectations are that 2008 will see the rate of repossessions double again to 80,000 as declining housing market impacts on the economy. Eighty thousand repossessions in 2008, would be more than the peak number of 75,000 repossessions during the last housing bust in 1991. As a sign of how shocking these figures we only need to turn back to the Council of Mortgage Lenders own forecasts of January 2007, which forecast 19,000 repossessions for 2007 and 20,000 repossessions for 2008."
Oh dear what a mess.
2. harold said...
17,000, 40,000, 80,000
Mmm, looks exponential to me. Oh dear, indeed.
3. Ihopeitgoeswithabang said...
All this is happening when most people are still walking around saying prices will never go down they will always go up.
I mentioned my views on house price growth or should I say falls! to two people last week. Both of whom I consider to be very intelligent people.
Both of them looked at me as though I had just said I was planning a trip to the moon.
Will be interesting to see what happens to prices when people actually start believing in large numbers that prices are going down.
4. dohousescrashinthewoods said...
I seem to remember commenting at the time of the original forecast that we should be looking at a power law.
Presumably that's going to be correlated with an increase in unemployment (putting paid to that tirelessly reused "strong fundamentals" story)
5. dohousescrashinthewoods said...
Interesting the idea of a correction early next year, followed by a rally and then decline.
Intuitively, I'm not sure I agree. Some of the anecdotals seem to suggest a steady and increasing breakdown happening now, though I have to admit the actual figures don't look awful yet. Some of the reports of increas in stock/decrease in transactions look pretty sudden though, so I would expect to see this reflected in the stats in the new year.
If we already had the suckers' rally in 2005, this could be it. Sentiment does seem to be turning fast. I've mentioned this before, but a colleague at work says his estate agent mate has never before seen BTL landlords walk in and instruct their full portfolio of 20 properties be sold.
6. planning4acrash said...
I doubt that 80,000 would be a peak.
7. Axxo said...
80,000 repo's is no where near what it will bein 2008! Look at USA, they have that figure in 9 months in just L.A.
As for Darling's 1st April date for the crash, this is spot on! Will be building the speed up now....
If buy to debters don't get repo'ed before then!
8. Mark Wadsworth said...
Tee hee, it's nice to roll around in this price-crash-porn, after all these years of prices-can-only-go-up-porn.
9. Jonathan said...
I had exactly the same experience as ihopeitgoeswithabang on Friday. But with BTLers instructing the sale of their 20 property portfolios, that's going to change soon.
Have we had the suckers' bounce since 2005? Well, cast your minds back to conditions and sentiment back then; a crash was on the cards but then the market surged ahead. Maybe in time we'll look back and see two suckers' surges? This will be the first bubble to burst with a predictable date (an appropriate one at that!) so maybe investors will be ready for the first fall and pile in once they think it's gone down far enough. However houses aren't as quick, easy or cheap to sell as equities with buying and selling quickly not a real option, so in all likelihood once the prices beging to slide, as with an anchor chain, they will be uncontrollable until they hit bottom - and investors will keep fingers well out of the way.
There are too many interested parties lining up to sell in April - even those who could afford to ride out the storm, those who bought some time ago to retire on, are likely to sell to capitalise on Darling's gift and bring on retirement. After all if they don't, they run the risk of diminishing returns which might put back retirement plans, and who'd want to do that?