Thursday, Aug 27, 2009
House prices can't defy gravity for ever
Guardian: House prices can't defy gravity for ever
Nice sensible article from the guardian putting the latest news into perspective. It states the obvious and why those wanting to buy a house shouldn't be upset by the latest news and wait for the adjustements down to work through the system whether they take 18 months or 5 years to do so.
Posted by britishblue @ 06:47 PM (1472 views) Add Comment
18 Comments
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1. flashman said...
The human lifespan is limited. Long term waiting, can eat into far too much of a persons life.
2. mystie010 said...
To flashman - you're telling me!
3. hpwatcher said...
The human lifespan is limited. Long term waiting, can eat into far too much of a persons life.
Depends on whether the final financial gain is worth it.....50k is one hell of a lot of money.
4. flashman said...
hpwatcher: yes, you have highlighted the agony of 'the decision'. There is always a chance that the £50K will mot materialise and this will make the loss of 5 years even more painful. The decision to wait or buy surely depends on the buyers financial situation. If they can only buy when prices have reduced by 50K then they should wait (no choice). If they can afford to buy now, then I would not necessarily call it a bad decision because it is hard to quantify whether 5 years waiting with no guarantees is worth more or less than 50K? I don't know
5. Richievet said...
my god what is happening here?
6. will said...
Down trend will resume faster than this article is supposing. QE has run out and by Xmas stock markets will have realised this and be on their way down again, together with house prices.
7. quiet guy said...
@will
That's a brave prediction. With an election coming up next year, I expect Labour will be willing to do anything to keep the property plates spinning just a little longer.
8. alan_540 said...
Does anyone really think Labour will be going into a general election with house prices crashing next June?
After the election, however, it's anyones guess when the real HPC happens... but I'm guessing it won't be long afterwards.
9. krustyatemyhamster said...
alan_540
This is the labour government that negotiated the GPs' contract. Do you really think they're capable of engineering continued house price rises as far ahead as June of next year in the face of the second world depression? Their policies are clearly geared towards reinflating the housing bubble, but they are financial incompetents .
10. Richievet said...
shocking
11. cyril said...
@1.flashman....yes you can waste a lot of time waiting for the right time to take the plunge but, if you buy now, you might get your fingers burnt and then spend the next few years wishing you hadn't. It's a difficult choice.
12. mdmick said...
I do not think that the UK really pulls the strings when it comes to house prices, CURRENTLY.
Interest rates could have been hiked in previous years as a measure of controlling house price rises but nowadays
raising interest rates will mean a lot of repossessions.
So I can see how the government would like to keep interest rates low and stave off a large volume of repossessions.
But realistically, can the UK control interest rates at low levels?
Surely, the answer to that depends on:
the global economy and which business sector of the UK the market dictates is going to most blossom;
as well as the need for higher interest rates at some time soon to pay off the huge debt which the UK needs to pay back.
I don't see how it is a government-controlled decision.
13. little professor said...
Downtrend will resume come late autumn. Have faith, my friends...
14. Smiling said...
flashman post 4- never seen a more sensible post on HPC- respect!
little professor post 12- sums up everything that is odd about HPC!
15. bluebeach said...
I have been renting and waiting for 2 years now... We can definitely see a pick up in the market in the North Wales border areas.
But what is this increased interest based on? It's not based on sound economic values, unemployment is on its way up in a predominantly manufacturing area, average wages are no where near enough to support reasonable mortgage multiples. It's based on fear of missing out; all reason goes out of the window. Rates can only rise, debt in taxes and bills can only rise... FACT.
I do not need a mortgage to purchase my home, but still I will wait, whilst all around me, people loose their heads, and eventually, maybe their roof above their heads too.
16. a saver said...
Will and LP, so hope you are right. The reductions we've seen do seem to have attracted a lot of people who firmly believe that prices have bottomed out and will inevitably continue to rise now.
17. nomad said...
@12 LP. Amen to that!
18. mark wadsworth said...
OK, this whole Spring Bounce manoeuvre, engineered by the govt via artificially low interest rates has been far more successful than I'd thought, but realistically, they've only managed to keep house prices flat. Sooner or later, commonsense has to prevail.
And yes, Mrs W is constantly chipping away with her "nesting instinct" (which adds to the pain of waiting), but I'm all for hanging on at least until late 2010.