Saturday, Jun 12, 2010
HPC back on the menu?
Times: Hold on to your home as house price recovery is set to stall
''...Despite an upturn in the spring, economists warn that things will get tougher with a double-dip in the housing market on the cards. Homeowners are being warned to prepare for a double dip in house prices, as a lack of mortgage funding, the expected rise in capital gains tax (CGT) and a looming interest rate increase send prices falling....'
Posted by hpwatcher @ 09:58 AM (3086 views) Add Comment
28 Comments
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1. holyroller said...
No, No, No, don't hold on to it, get it on the market now, the more the merrier :)
2. monty032 said...
Maybe it's a double dip and maybe we've just seen the bull trap, as in the "Lifecycle of a Bubble" graph on this web site. Surely if house prices are expected to fall again then now IS the time to sell.
3. Positivo said...
So does this mean that their propoganda tactics of bigging up house prices to get us to buy houses hasnt worked?
Come on sheeple, get with the programme.
4. Positivo said...
Charles Darwin must be laughing in his grave.
The housing bubble was created by property investors and now they think they can sit tight and enjoy the riches they have made. Sure they may die and pass on their portfolios to their kids, but ultimately without the first time buyers (who have been priced out of a home), there will be little movement and hence an inevitable crash.
Just like life itself, we only survive because of the food chain of life, without it we cannot survive.
5. greenshootsandleaves said...
In other words 'If we can't get the third division punters to buy, then let us try to discourage the second division ones from selling.'
6. tenyearstogetmymoneyback said...
We all know what happens to aircraft when they stall.
BAIL OUT NOW BEFORE IT IS TOO LATE ! ! ! ! ! ! ! ! !
7. britishblue said...
What is reputable newspaper that is 225 years old doing quoting organisations such as 'Assetz'. as property experts. Are there no journalistics standards left in the broadsheets?
8. mark wadsworth said...
What Holyroller says.
And it's not so much a 'lack of mortgage funding' (which would suggest a small, but positive figure), it's that the banks have got to work out how to repay £300 billion in soft loans etc from the government, financed by Timmy Taxpayer (so it's a huge negative figure). As a matter of maths, they could repay this by simply not lending any money at all for three years while collecting regular mortgage repayments and redemptions. As a matter of politics, a little bird tells me that the Lib-Cons will just extend and pretend in order to keep the Home-Owner-Ists on side.
reCaptcha: shorter by
9. gone-to-colombia said...
@5 Britishblue,
Can it be true that London rents have risen by 9% as stated by Asetzz or what ever they are called?
I find that hard to believe.
Journalism from the Times should be much less credulous.
10. simon68 said...
British banks have to repay UK Government’s Credit Guarantee Scheme and Special Liquidity Scheme from 2011 onwards, so there won’t be capital for mortgage lending which may lead to properties price fall.
http://img534.imageshack.us/img534/7311/111aq.gif
http://img541.imageshack.us/img541/6938/222y.gif
11. tenyearstogetmymoneyback said...
Isn't the obvious answer that the banks should offer better interest rates to attract more money in.
By that time lots of people will be coming off fixed rate deals so they could always pass on the interest rise to them.
It is time the people who have benefited from silly 1p a month tracker deals etc should pay the going rate for borrowing.
12. inbreda said...
6. mark wadsworth said...a little bird tells me that the Lib-Cons will just extend and pretend
That has possibly just ruined my weekend. (and confirmed that I have wasted about ten years of my life). THat is hugely depressing if true.
13. alan_540 said...
Hilarious
14. paul said...
That has possibly just ruined my weekend. (and confirmed that I have wasted about ten years of my life). THat is hugely depressing if true.
Don't get discouraged inbreda. I'm in the same boat and I think there is a surprise in store for UK financing. The industry's credit line with the government has run out and the government's credit line with the world has run out. What happens next is going to be very interesting.
15. mr g said...
@Paul "I think there is a surprise in store for UK financing. The industry's credit line with the government has run out and the government's credit line with the world has run out. What happens next is going to be very interesting"
I agree with that statement but if it leads to higher interest rates won't that mean that many FTB's will not be able to afford a mortgage even if property prices fall?
16. simon68 said...
Believe me………..I am well versed with economic depression. Back in 2003 Hong Kong government published unemployment rate is 7.5% but the true rate should be more than 20%. At that time, house price in Hong Kong slumped and fallen by 70% and you can easily negotiate a free 6 months rental period for new lease with landlord. Hong Kong has been identified as SARS disease city and people freak out and leave. All street were empty and people won’t go to work since they didn’t want to get infect with SARS disease and everyone carried a mask on their mouth.
Even the house price had fallen by 70% but no one bothered to read even the offer to sale advertisement let alone the interest to buy a flat.
17. tenyearstogetmymoneyback said...
mr g wrote "I agree with that statement but if it leads to higher interest rates won't that mean that many FTB's will not be able to afford a mortgage even if property prices fall?"
I was thinking that myself, but it all depends on how big the relative swings are.
A positive thing about the mid 1990s was seeing colleagues who hadn't been able to afford property
buying decent places for less than three times salary. Of course people like myself were a bit disgruntled
having lost £17K (25%) of my equity, although had I had the nerve I could have bought my dream house for £92K.
The people who were really stuffed were those who had bought on 90% mortgages in 1989 and were well into
negative equity.
18. tenyearstogetmymoneyback said...
Just realsised I have done Gordon Brown style maths.
What I meant to say was that the house had lost 25% of its value and I had lost 70% of my equity.
The exact figures for those who are interested are
1989 bought a house for £65K with a £40K mortgage on a salary of £14K
1995 house worth £48K. Salary £20K
1999 sold house for £70K Salary £29K
2009 very similar house sold for £160K. Salary £40K
Of course the salary figures aren't really comparable as they don't take into account any increases for promotion etc.
Paul said "I think there is a surprise in store for UK financing." Why does this make me think of Black Wednesday.
I was the smug person with an 11% fixed rate mortgage. Getting out the calculator, 11% of £40K = £4.4K when you are earning
£20K P.A. doesn't sound too bad. Oh for the good old days.
19. peter said...
I'm sure it's right to say that the new ConDem (condemn?) government will try to 'extend and pretend'.
Recent history suggests that the pols will do anything to avoid houses getting cheaper. Whether they will be successful though is another matter.
Margaret Thatcher used to say 'you can't buck the market' and she was right. It's a shame that her successors don't take a leaf from her book, because one thing is certain: if they keep on with these absurdly low interest rates and continual bailouts, the result will be national impoverishment.
20. wally said...
10yrs - I had a similar experience
1989 puchased for 69K, 1992 sold for 48K
Interestingly the property sold again in 1993 for 44K. Perhaps a lesson for those now who are holding out 'better offer'. Maybe better to take what you can get
21. alan_540 said...
Roll on next year when the government's mortgage liquidity scheme is set to expire : the three months of price falls we've seen so far will look like a fond memory. If I had property to sell I'd be making sure I sold it before the end of this year.
22. wally said...
But people's expectations are still on the upside. A chap at work has recently married and they each have a property, so want to sell one. He admits the market is not good at present so feels the best option is to hold for a couple of years until things have improved. I think he's completely nuts, and have tried a bit of gentle suggestion that things could get worse, but he is absolutely sure of himself. Each to his own.
23. mark wadsworth said...
Peter 17: "Margaret Thatcher used to say 'you can't buck the market' and she was right. It's a shame that her successors don't take a leaf from her book..."
Her immediate successor, Sir John of Majorlot did take that lesson to heart and allowed house prices to fall. Those who bought in late 1980s hate him; those who bought in mid 1990s love him (or ought to love him if there were any justice in this world). I am one of those who bought in mid 1990s and to my mind that was the most egalitarian and positive period that we have had for ages.
24. tenyearstogetmymoneyback said...
Interesting to hear your experience Wally.
As my user name suggests I just stayed put (in a house I hated) until I got my money back.
The £48K I mentioned was the result of my "buyer" trying to Underzump me £4K when I was trying to sell in 1995.
I said no. To add insult to injury she then bought a larger house just up the road !
I have often wondered if I made the right decision. Back then I could have bought a really nice house
in a much better area for £92K. Today it would cost at least £300K.
A final question for anyone who studies politics. Is the money that has been lent to the banks included in the Government debt figures i.e.the ones they are trying to get down ?
25. mr g said...
@MW " to my mind that was the most egalitarian and positive period that we have had for ages."
I agree entirely.
Never mind Tony and Gordon's efforts at social engineering, true "one nation" Conservatism creates equality and opportunity for everyone.
26. simon68 said...
What socialist means equality is everyone having the same pay/treatment irrespective whether you are fleckless or toiling. In capitalist sense, the more efforts you put into your work the more return you get & no pain no gain.
27. Rentslave said...
re:22
My understanding was that the £300bn is not currently counted on the national debt. If the banks do not start repaying, then it does become a part of the gov't's declared debt. That makes me think they won't continue it. Will make a mockery of the idea of controlling the national debt.
I might be wrong - I have been before :o)
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