munimula

That's the problem, it did fall 20% but then after rises in many areas prices are back to peak 2007 or a in the region of 0-10% less

Yes, but on the plus side for years we had to put up with the feeling we were being ripped off in Britain - 'rip of Britain' we were constantly told. Now, after visits to europe everything here is starting to feel good value....even £3.50 a pint after it costing 6E (almost £6!) in Barcelona last year

My sister and partner have just become reluctant landlords. Job loss and relocation means they need to move but have decided to sell their house next year when spring arrives. I think that if this is representative then next year could see the housing market supply shortage turn into a supply flood. After months of price stabilisation and rises, many people will have been saved from negative equity and will therefore be prepared to consider selling again. This is their situation, they were in NE and would never have sold but now have positive equity due to prices rising again so will try and sell.

Not necessarily true. There is a phenomenon known as the 'Laffer' curve where an increase in tax rates does not result in an increase in tax take after a certain level as people basically decide not to work or try harder to avoid taxes. This is why the only real way out of the problem for the governemnt is considerable spending cuts. The tax level in Britain is already about as far as it can go.

Also, what about a big increase in properties for sale? My sister has decided to sell in the spring, doesn't really make much sense but when you consider she bought at the peak in 2007 she could be a good barometer for what the sheeple are planning to do. Having seen prices stabilise, and many been rescued from NE by rising prices, there could be a lot of pent up supply about to hit the market - in 2008 she was definitely in NE but now has equity again

20% government cuts All parties are acknowledging cuts required, figure of 10% being banded around quite comfortably now so you can be sure that greater cuts than that will be required. Just remember one figure - £16bn borrowing per month The clock on this debt bomb is ticking

I'm afraid you are going to be proved very wrong You have some idea that raging inflation is going to come along and support nominal house prices. There might be higher inflation (although I expect not for sometime) but it is unlikely this inflation will result in decent wage inflation in time to support nominal house prices. Due to the credit shortage and expense for new money to the property market (FTBers for example) there will be nominal falls in house prices again as soon as there is an increase in properties being sold (next spring?) as there is not enough new credit around at affordable prices to support the housing market on normal sales volumes. And these falls will be compounded by cuts in government spending that will be forced on government next year as borrowing spirals out of control. Remember the main drivers of our economic growth in the last decade were retail and government.

Nothing has improved for FTBs, it has got worse. My sister got a 95% LTV mortgage fixed at 5.5% for 10 yrs in 2007 The Guardian at the weekend said the best FTB 5-yr fixed is currentlly 6.49% and max 90% LTV Thanks to the 'recovery' in house prices, in her area of Bristol prices are at least back to 2007 peak prices so it's now more expensive to buy than at the peak!!!!! FTBs represent the new money coming into the market, that's necessary for a 'normal' market with normal sales volumes. They bring the big new money to the bottom of the chain that feeds all the way up. Currently the housing market is suported by low volumes and cash/equity rich buyers - they can't support a market working at normal volumes.

Exactly. I did some calculations based on my sisters FTB purchase at the peak in 2007 and the affordability now is worse than then, much worse. She got a 95% LTV fixed rate for 10yrs at 5.5% Now the best FTB mortgage is 6.49% fixed for just 5 yrs and 90% LTV max (reported in Guardian at the w/e). The property has recently been valued higher than when they bought it. (Bought for £190k and valued now at £225k) So an FTBer today needs a much larger deposit and will still be paying much higher monthly mortgage payments. How the hell can that be the case in the middle of a recession!? The housing market it currently feeding on itself, people with cash and large equity trading on low volumes. It's not sustainable. The other thing that has saved people is low SVRs - people that found themselves in negative equity just fell onto really low SVRs when their mortgage deals ended. These SVRs are far lower than any new mortgages that can be obtained and normally this isnt' the case, SVRs traditionally are higher. If people coming to the end of fixed/tracker deals and finding themselves in NE were reverting to SVRs more like the 6.5% FTB deal above and at the same time they were losing their jobs there would be far more forced sales. This has been avoided with low SVR rates.

I don't know which one of those I find more baffling Turned Bull in 2006 - bullish on what exactly!?

I never got to be a bull After 20% house price falls through 2008 I started to see a day I too might be a bull but sadly with the foundations of this 'recovery' built on sand I've just gone from bearish to uber-bearish and that day has been taken from me...

Seriously, who would actually count that?

I think we can safely say the current housing market is running on cash buyers and low sales volumes. This is why price stability/rises can't be sustainable as the majority of 'new' money coming into the housing market to sustain rises with normal transaction levels has to come from FTB's and their 90%-95% mortgages. At the moment the housing market seems to be simply feeding on itself rather than being fed a lovely plate of new FTB mortgages.

No, you're right and I've suggested that they sell and pocket the equity and buy at a later date. However, they would have to pay £5k penalty on mortgage because is fixed rate for 10yrs. Also it's pretty good at just 5% with about 7yrs remaining. But mainly they don't have the combined salary they had to get that mortgage and due to job loss and taking new job on a lower salary they couldn't afford to buy a comparable house again, even with the equity now in the property. Therefore it is possibly the best option that they sell and buy another house in the new year when they know where they want to live thus transferring the mortgage. If prices fall then so will the price of the property they buy.

To be honest I don't know what was available to them but they didn't get any help with mortgage. After a short period on job seekers he took up some paid work at £7ph with the council to tide them buy. I know it wasn't enough to pay the £1050 mortgage

when you've been out of work for 6 months and only a handful of jobs come up in that time - none of which you got then staying where you are isn't an option anymore

Been redundant for about 6 months this year and having to move for new job.

Local EA valued it but it ties in with what other properties 'appear' to be selling for They are now wating until the spring to sell the property which I find interesting. If that represents a lot of thinking of house sellers then maybe the spring could see a deluge of pent up sellers

They bought a house in Bristol for £190k in 2007 with a 10yr fixed mortgage at 5%, FTB mortgage with just 5% deposit so mortgage of £180k. Mortgage is around £1050pm repayment. The property fell in value, on their street nothing was selling in 2008 and everything was having the price slashed. Turn to 2009 and thanks to a mini boom the house has been valued at £225k (higher than peak 2007!!) and they'd probably achieve it as everything selling. It looks like best deal would be 6.49% with 10% deposit. (http://www.guardian.co.uk/money/2009/sep/19/first-time-buyers-mortgages) So FTB today would need nearly £25k deposit and would need a £200k mortgage and have to pay £1365pm!!! 2007 - mortgage £1050 deposit £10k 2009 - mortgage £1365 deposit £25k So the monthly cost for the same property today for a FTB paying the min deposit is roughly 30% more I'm just totaly bemused as to how we find ourselves in this situation. Can anyone please explain?

Was reading in Moneyweek yesterday that prices achieved on house sales at auction has just taken a big fall in the last month after recovering through 2009. Apparently it's a good leading indicator on future house prices.

yep, it's the sale-less, jobless recovery - a true miracle

I just had a de ja vu moment with some of the posts I remember reading in 2007 Absolutely no ability to see beyond the last Daily Express headline

Unlikely, you won't be anywhere to be seen - when has a bull ever returned to this site to admit they were wrong?

I'm just not very patient with stupid people

that's hilarious