Monday, Oct 20, 2008
Largest ever annual fall recorded in asking prices
Rightmove: October House Price Index
"Housing market unlikely to ever be the same again"
Posted by doomwatch @ 11:03 AM (542 views) Add Comment
5 Comments
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1. str 2007 said...
It will be
interesting to see how these banks deliver on the commitment given to Government that
they will seek to deliver a broad, deep mortgage market with a good spread of products
that enables credit-worthy borrowers to access mortgage finance. Rule-of-thumb salary
multiples established in the high-inflation and high interest rate environment of the 1970s
and 1980s are looking increasingly inappropriate as base rates fall back from a peak of only
5.5%. We expect lenders to increase their use of broader measures of mortgage affordability, though their lending will remain restricted compared to pre-credit crunch times
by tighter controls on leveraging debt.
The aforementioned shifts affect all sectors of the housing market and may have longerterm
consequences, namely:
· First-Time Buyers having to save more for the larger deposits now required, thus
more likely to be older or the beneficiaries of help from their parents;
· Amateur buy-to-let investors becoming hindered by tightening criteria on mortgages,
thus significantly restricting the growth of the private rented sector. This potentially
exposes opportunities for larger institutional landlords.
· Low volumes of new homes as the industry will take years to recover from banks’
wariness to lend on speculative developments, exacerbated by the loss of skills that
the new homes developers have already suffered.
It is worth noting that there will not be a direct correlation between lower prices and buyer
affordability due to the significant tightening of lending criteria.
Shipside predicts: “For those who have been active in the housing market in the last 20
years, or were now hoping to get on the housing ladder following recent price falls, the rules
have changed for good. When we look back on these turbulent times, I suspect we will not
only realise that we came closer to the brink than most imagine, but we will also clearly
recognise it as the end of the long period of growth in owner occupation.”
Interesting to read Miles Shipsides take on things. He's doing his best to talk things down. He knows his customers (the estate agents) need to price things lower to stay in business.
I wonder if half of us will end up renting from Tescos ?
2. letthemfall said...
Quite a candid commentary from someone in the business. He thinks the rise in asking prices is unrealistic. Come the new year, I think we will start to see some bigger downward movement.
3. voiceofreason said...
This report needs some sales volume figures to validate it's claims.
The market is so thin that the rises / falls are probably statistically insignificant.
No one can sell unless they are repossessed and a cash buyer goes in at a decent rental yield, which means a 40% (and rising) discount from peak.
Fantastic !!
4. peter_2008 said...
Forget about the numbers for a sec. It says "new sellers asking an unrealistic 1% more than last month". This comment is significant, as it comes from one of the bulliest online property company. For Rightmove to use such a strong word against its own customers, it must be really pissed off
5. Mrb said...
"Quite a candid commentary from someone in the business. He thinks the rise in asking prices is unrealistic. Come the new year, I think we will start to see some bigger downward movement."
yeah - I thought it was a hoax
In fact I still think it's a hoax?