Wednesday, Jul 30, 2008
Precipitating further price falls?
FT: UK Mortgage Market
In summary there is a stand off between buyers and sellers and at some point soon sellers will capitulate and we'll see some proper price falls. As if they aren't underway already..
Posted by cash is always king @ 09:19 AM (620 views) Add Comment
7 Comments
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1. Fossildog said...
Gordon Mac? Surely Fanny Brown would be more fitting
2. mark wadsworth said...
Cool. I like that £40 bn a year they need to refinance - if true, that will make the whole rights-issue-debacle that we've seen so far look like a stroll in the park. In dappled sunlight.
3. maddison said...
The stand off will last as long as sellers of houses are not forced to sell. I have had 3 houses for sale in my street all overvalued about 15%. I know this as one house has sold in the street but it was an ex rental distressed landlord so doesnt count.... oh and it sold in one week. 2 houses have been taken off, one has been rented out and the other just pulled down the for sale sign so I guess not that bothered.
4. uncle tom said...
One of the uncertain factors I have mused over the last few years, is the average pace at which un-pressured vendors of properties will drop their asking prices in the absence of a sale.
My best estimate has been about 2% per month, which is close to the falls recorded by the mortgage lenders in recent months.
However, the number of people being financially pressured to sell is on the increase. Estate agents are also growing impatient with the deadlock, and are beginning to realise that they need to talk down the market to achieve sales, and to pressure vendors into dropping their asking prices.
The pace of decline may well accelerate come the autumn...
5. pelethar said...
Uncle Tom - completely agree. The change in attitude of estate agents is going to be a key factor in accelerating the crash as measured by asking prices. They are starting to get desperate with widespread increases in fees, but lifting fees from 1.5% to 2% does not offset the impact of a 50%+ fall in volumes. Only deep cuts in asking prices will get the volumes up.
6. jonb said...
The crash is not already underway. It has only just started, and the falls so far are tiny compared to what we are going to see.
We are only back to 2006 levels, when you will remember we were saying, quite correctly, that house prices were far too expensive, and needed to fall considerably.
7. Whostolemyendowment said...
MacBroon, MacAlister - or Ben Doon & Phil MacCavity