Monday, Jan 28, 2008
Marekt gridlock on the way, can't sell, won't buy, not enough mortgage products..............
Firstrung: UK house prices fall again as average time to sell house reaches seven year high - Hometrack
House prices in England and Wales rose at the slowest annual pace since mid 2006 as the average time it takes to sell a property reached a seven year high, a survey showed on Monday...
Posted by converted lurker @ 09:01 AM (507 views) Add Comment
6 Comments
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1. japanese uncle said...
It is a sure thing that credit crunch will further accelerate/deteriorate in view of the current development in the financial markets around the globe. Ultimately you will be able to buy houses by cash only, as mortgage providers will shut the door for any new business. (or at least 60% deposit could be the required, etc. This is a real possibility.) House prices will have to be dropped to the level at which people can afford to pay in cash. Again 50-60% drop nationwide, 80% drop in some areas in London is inevitable. Or even worse, God knows.
2. converted lurker said...
do you really envisage lenders to simply stop lending unless you have a 60% deposit?
3. Landedgentry said...
Converted Lurker, cash will be king from now on. Banks have already been shafted and cannot afford to take the risks of the past.
4. crash bandicoot said...
I think JU is right if house prices remain where they are (which they won't). There is a need for the price of a house and the average wage to reconnect again. If you look at current prices compared to earnings then there is no way that anyone can afford to buy one. The banks have been keeping a pretence that they have been adhering to strict lending conditions but they have been gambling on price increases keeping the market going as much as the irresponsible borrowers. Now that they are looking for some stability and security all of the old tricks are disappearing. Therefore if you want to pay more for a house than you can afford, they'll lend you what you can afford to pay back and you'll have to find the rest of the money from somewhere else.
5. japanese uncle said...
convered lurker
Given 70K three bed house, 60% deposit means just 42K, which is normally required nowadays. Try to think this way.
6. converted lurker said...
Hear what you're saying guys, but according to my stats 35% correction will take us back to affordability based on median wage for a couple, 200K house down to 130 ish