The Houseprice Crash Is Over

[Dr Renter]

-Upsize

Selling too low and gone is the equity needed to put on a bigger property. Add to the fact that generally upsizers may not have that much equity left anyway on the property they are trying too sell.

So instead they will wait for house prices to rise before upsizing???? Yeah, that sounds like a good idea. May as well just burn your money.

[Gideon Gono]

What if someone who owns a house dies?

They leave it to someone else. If they die of old age its unlikely they have a mortgage. If they die another way life insurance will pay out so the partner can buy the house. The remaining circumstances are neither here nor there.

[winkie]

They leave it to someone else. If they die of old age its unlikely they have a mortgage. If they die another way life insurance will pay out so the partner can buy the house. The remaining circumstances are neither here nor there.

Why should anyone have to wait for someone to DIE to buy a house....we are all living longer don't you know, the rich will then pass on their riches, the poorer will then be more priced out.

[babesagainstmachines]

They leave it to someone else. If they die of old age its unlikely they have a mortgage. If they die another way life insurance will pay out so the partner can buy the house. The remaining circumstances are neither here nor there.

And whoever they leave it to sells it, and is not that concerned about the sale price because it's free money.

[Gideon Gono]

And whoever they leave it to sells it, and is not that concerned about the sale price because it's free money.

Unless its 3 or 4 syblings with mortgages of thier own wanting to maximise thier take.

[Stars]

I would encourage bullish sentiment in real estate 'investors' right now, not because i think there is an inkling of the remotest chance for sustained, real growth in the economy, but rather i would prefer that these thieving, useless parasites took a much larger portion of the destruction they have caused.

[Peter Hun]

Except it didn't go bankrupt at all. Technically, it entered chapter 11 bankruptcy protection, which is substantially short of a full bankruptcy (chapter 7).

Essentially, it is a means of forcing negotiations that will allow GM to write off or renegotiate it's liabilities, whilst still surviving as a viable company.

This is good for the health of the wider economy, not bad. It allows GM to restructure, and keep going as a viable concern. Most people will stay employed. Most suppliers will keep supplying. etc etc etc.

No so good for all the people who will lose money because of it. Fortunately my business deals with IBM, so its no skin off my nose as long as IBM keep forking out.

[Peter Hun]

double post

Edited June 1, 2009 by Peter Hun

[Gideon Gono]

Why should anyone have to wait for someone to DIE to buy a house....we are all living longer don't you know, the rich will then pass on their riches, the poorer will then be more priced out.

Im well aware of how a capitalist society works. No one said they had to wait till someone died. Buy now and take advantage of the 20 -25% discount that you've just been offered. It wont last long!

[babesagainstmachines]

Unless its 3 or 4 syblings with mortgages of thier own wanting to maximise thier take.

This is exactly the situation where most will sell.

[winkie]

Im well aware of how a capitalist society works. No one said they had to wait till someone died. Buy now and take advantage of the 20 -25% discount that you've just been offered. It wont last long!

I am afraid to say for some that will be the only way they will ever get the chance to secure a deposit to buy...or repay a large debt they had taken to buy, but never got the chance to repay....Many more will be going into old age and retirement with a large debt and no means or income to make the monthly repayments, interest rate unknown.

[LuckyOne]

Im well aware of how a capitalist society works. No one said they had to wait till someone died. Buy now and take advantage of the 20 -25% discount that you've just been offered. It wont last long!

Soon to be a 35 - 40% discount.

[GordonBrownSpentMyFuture]

the fact a lot of people are thick as sh1t means that a bit of sunshine comes and we have the traditional British feelgood factor.

For a short while, a month or three perhaps, people will think that things are ok again. Bills will be low, the car can be driven in nice conditions etc. Let's face it, this country has sh1t weather most of the time and the sun really does hit our brains.

Spot on.

And, TBH, I'd happily see house prices increase for the next 3 consecutive months if it means we're going to get a good summer.

The grey skies and torrential rain will return soon enough, along with tax increases, rising unemployment and inflation (and interest rates) and, of course, further HP falls.

Give the sheeple their feel good factor for a few months if it means everyone will be happy and enjoy the sunshine. As a nation I think we need it because the reality of the dire situation we're all in hasn't changed.

The government has just done what is has always done: postponed a problem that will have to be dealt with at a later date (unless they're able to postpone it again... and again...). This just happens to have coincided with a bit of good weather and consumer confidence has been manipulated accordingly.

[Harry Monk]

I hope we'll have a beer down the Three Squirrels on night. You need putting right on house prices.

No prob Sibs, give it another 12 months and I'll be able to buy the place outright!

[HAMISH_MCTAVISH]

For those that obviously didn't read the article..........

Harvey Jones celebrated when the property market crashed. But now, he's been forced to accept that a recovery is around the corner.

OK, I admit defeat. After months of arguing that a good old-fashioned house price crash is exactly what we need, I've finally accepted that it's all over.

My one-man campaign to keep house prices falling (well, a two-man campaign if you include lovemoney.com's very own Ed Bowsher) appears to have failed.

The writing has been on the wall for some time, but when Nationwide reported the property market actually rose 1.2% in April, I finally buckled.

House prices in the UK simply refuse to drop to moderate levels. Vendors are refusing to drop their prices further, buyers are starting to meet their valuations. Bricks and mortar still look shockingly expensive. It seems that we like it this way.

Ker-Tring!f

I first suspected I was doomed to defeat in March, when I pressed my nose against thfe window of a cramped, two-bed Victorian cottage in a small village outside Tring, Hertfordshire. It was a humdrum end-of-terrace and I guessed it would be on the market at £220,000. It was on at £325,000.

It was a crazy price.

True, it was "only" 35 miles from London, and nobody has bought it yet, but I bet they will.

Overpaying for property is what Britons do best. It is in our genes.

I'm not a bad person

I've had mixed views calling for further house price falls. I don't want to see millions plunged into negative equity and bailiffs shoo tens of thousands out of their devalued properties.

Nor was I trying to talk down the property market, as one person suggested on these message boards, so that I could snap up a bargain with a wall of cash I don't have.

I just thought that if one good thing came out of the recession, it would be an end to house price mania, and the start of a healthier relationship towards property.

I also hoped it would give young people the prospect of buying a place of their own, rather than filling the boots of a buy-to-let landlord.

Your home, my plaything

While living in rural Suffolk a couple of years ago, I got talking to a likeable couple in their twenties who had grown up in unglamorous Leiston, which services Sizewell B power station, and earned their living in Aldeburgh, a posh seaside resort just down the coast.

They accepted they could never afford to buy in Aldeburgh, home to genteel retired dames and brash London second-homers, but were in despair at being squeezed out of their hometown by overspill second-homers. Their friends on local wages were suffering a similar fate.

Soon after, a tax consultant I knew breezily told me she was "thinking of buying in Suffolk". Not moving there - "Leave London? Are you mad!" - just buying. The spare equity in her Muswell Hill home made £150,000 for a two-bed terrace in, yes, Leiston, seem like a snip.

She thought it would be nice to stay two or three weekends a year, and make a little on the side by renting it out.

So another local couple loses the chance of buying a home to raise their kids in.

And this cruel pattern was being repeated in thousands of towns and villages across the country.

Never, never, never

So I thought a property crash would bring some benefits. I didn't want to see the younger generation mortgaged up to the hilt to fund the winners in the equity lottery. Or millions of people barred from home ownership for life.

And the young ones the only ones who were suffering. I know people in their forties who suddenly realised they had left it too late to ever buy a house if they wanted to repay off their mortgage before retirement.

The rest of us, me included, who climbed onto the property ladder at the start of the boom in 1997, were sitting pretty.

We can't help ourselves

Now it looks like that isn't going to happen. Yes, affordability has improved, but not enough. And the merest glimpse of a green shoot has got everybody dancing round like spring lambs.

Estate agents are shining their suits. Lenders are lifting their LTVs. Property developers are practising their patter. And first-time buyers are sizing up damp shoeboxes and wondering if they could stretch to £325,000.

There is a wall of pent-up demand out there. And who do I blame? I blame us. All of us. We are property die-hards. Extremists. Obsessives.

Years of watching home makeover shows have indoctrinated us. We are crazy about property. We just can't let it go.

Between bricks and mortar and a hard place

A wider problem is that we built our entire economy on a property bubble. The Government dare not let that bubble burst, because the whole economy will go pop with it.

So we slash interest rates to levels no government has thought necessary in more than 300 years, and hang the savers.

And if anybody had been mad enough to make me Chancellor (well, somebody gave Alistair Darling the job), I would have done exactly the same thing, because the alternative doesn't bear thinking about.

Of course I could be wrong

Ed Bowsher is still keeping the faith. He claims the house price bust isn't over, and prices have another 10% to fall.

He bases his argument on the fact that unemployment is set to rise sharply, and this will trigger house price sales.

Ed is obviously made of sterner stuff than me.

Perhaps I'm just having a wobble. I remind myself that house prices enjoyed the odd monthly rise in the 1990s collapse, and there were a few weeks during the Wall Street Crash when people brightened up and said "Don't panic, it's only a blip."

But I'm beginning to fear that property in the UK is naturally over-priced. I guess there isn't enough of it for the growing population. Now we'll have to learn to live with the consequences.

To that young couple in Leiston, my apologies. At least I tried.

Finally, a bear sees some sense.

[THE BALD MAN]

No the average house price on properties actually for sale might have dropped.

If a sellers sitting this recession out any data in the media now doesn't apply.

I would buy the house next door to me if I could buy it for 20% off what they paid for it 2 years ago. However, they don't want or need to sell it. I don't want to buy anywhere else so it's a stalemate. There you go. In laymans terms for you.

I hope we'll have a beer down the Three Squirrels on night. You need putting right on house prices.

Sorry you seem to totally misunderstand market value. Prices are being setting by sales of property and as the recession and unemployment bites more and more people have to sell at lower prices. Another economic fact is thta houses cannot continue to rise in price without borrowing returning to the unrealistic level;s of the last few years. The bubble was debt driven not shortgage of supply.

[ItsColdUpHere]

I could have linked this with so many threads today, a bit of sunshine and everyone seems to be losing the plot so much so that we have even been talking on HPC about all playing at being bulls. If people are defecting by the 1st June what will happen over the rest of the summer? I just can't believe given all the reasons why property will keep crashing that we have articles like this one today from someone who should know better.

The House Price Crash is Over

So you tell me what has changed since these articles?

Why House Prices Have Much Further to Fall

Why we Should Let Property Prices Fall

Have we suddenly got £200bn of funding for mortgage lending ?

Have wages gone up suddenly? Did 2007 lending levels not break the banks and leave the country bankrupt?

I guess we were all warned of a dead cat bounce but we seem to have forgotten what we KNOW. Merryn Somerset Webb spoke in her article STAY AWAY FROM PROPERTY IT HAS MUCH FURTHER TO FALL said:

I don't think I will be defecting yet .

Its just having a rest.

Another 20% to go.

[loginandtonic]

QE and very low interest rates = distorted market

high unemployment, credit tightening and return to average interest rates = real market

guess which way prices are headed once the drugs have worn off after the next gen election

[Soul Reaver]

I could have linked this with so many threads today, a bit of sunshine and everyone seems to be losing the plot so much so that we have even been talking on HPC about all playing at being bulls. If people are defecting by the 1st June what will happen over the rest of the summer? I just can't believe given all the reasons why property will keep crashing that we have articles like this one today from someone who should know better.

The House Price Crash is Over

So you tell me what has changed since these articles?

Why House Prices Have Much Further to Fall

Why we Should Let Property Prices Fall

Have we suddenly got £200bn of funding for mortgage lending ?

Have wages gone up suddenly? Did 2007 lending levels not break the banks and leave the country bankrupt?

I guess we were all warned of a dead cat bounce but we seem to have forgotten what we KNOW. Merryn Somerset Webb spoke in her article STAY AWAY FROM PROPERTY IT HAS MUCH FURTHER TO FALL said:

I don't think I will be defecting yet .

I wonder why Merryn is on progessive propertys mailing list! Perhaps just research into ********

Edited June 2, 2009 by Soul Reaver

[tomandlu]

I don't think you can say we even had a house price crash.

A HPC would have meant ALL houses dropped a certain %.

Err.... so people aren't selling unless they have to, therefore the houses that people aren't selling have retained their 2007 values, therefore there is no HPC, since only forced sellers are selling at -20%... or something...

Christ, it must be like £ucking Wonderland living inside your head...

[Shamrock]

Err.... so people aren't selling unless they have to, therefore the houses that people aren't selling have retained their 2007 values, therefore there is no HPC, since only forced sellers are selling at -20%... or something...

Christ, it must be like £ucking Wonderland living inside your head...

[bimyo]

I don't think you can say we even had a house price crash.

A HPC would have meant ALL houses dropped a certain %.

Usually disregard posts from EA tw@ pour-beer-over-your-mates-and-quote-the-Express types,

but, wow.

This one can't grasp the concept of an average.

[Timm]

For those that obviously didn't read the article..........

...While living in rural Suffolk a couple of years ago, I got talking to a likeable couple in their twenties who had grown up in unglamorous Leiston, which services Sizewell B power station, and earned their living in Aldeburgh, a posh seaside resort just down the coast. They accepted they could never afford to buy in Aldeburgh, home to genteel retired dames and brash London second-homers, but were in despair at being squeezed out of their hometown by overspill second-homers. Their friends on local wages were suffering a similar fate.

Soon after, a tax consultant I knew breezily told me she was "thinking of buying in Suffolk". Not moving there - "Leave London? Are you mad!" - just buying. The spare equity in her Muswell Hill home made £150,000 for a two-bed terrace in, yes, Leiston, seem like a snip. She thought it would be nice to stay two or three weekends a year, and make a little on the side by renting it out.

So another local couple loses the chance of buying a home to raise their kids in. And this cruel pattern was being repeated in thousands of towns and villages across the country...

So I thought a property crash would bring some benefits. I didn't want to see the younger generation mortgaged up to the hilt to fund the winners in the equity lottery. Or millions of people barred from home ownership for life. And the young ones arn't the only ones who were suffering. I know people in their forties who suddenly realised they had left it too late to ever buy a house if they wanted to repay off their mortgage before retirement...

To that young couple in Leiston, my apologies. At least I tried.

Finally, a bear sees some sense.

Let me get this right. To see sense is to accept that those not already in the property owning classes will remain landless vassels for ever?

[tomwatkins]

Usually disregard posts from EA tw@ pour-beer-over-your-mates-and-quote-the-Express types,

but, wow.

This one can't grasp the concept of an average.

[/quote

No different than banks retaining bad assets at over-valued prices. As long as you keep em on the books then you can value them at whtever you like (within reason). Valuing property at daft 2007 prices is the private equivalent of mark to fantasy accounting.

[deeplyblue]

I don't think you can say we even had a house price crash.

A HPC would have meant ALL houses dropped a certain %.

If for example I could have sold my own house for 20% off peak and bought the house I wanted for the same I would have done it.

We all know in reality it is mostly rubbish for sale in the bargain basement.

No there wasn't a HPC at all. Just a wobble in the economy which will pass.

And, of course, no real recession at all. A little local difficulty with the banks, which has now been solved, and all the people who said that the stock market could and would now rise forever have been proved right.

And Gordon Brown will put off a General Election until next year by which time

i) There will be no financial problems in the city

ii) the Great British Public will have heard the laughter coming from abroad, "They had to pay back £700! I charge that much to my expenses every week, just for wining and dining my mistresses! These British politicians are amateurs at the game."

and we'll have another Labour government as everyone praises GB for solving the Credit Crunch, the Bank failures, the Global downturn, Global warming and Child Poverty.

Hallelujah!

db

P.S Does that mean my Lloyds shares will be back at their 2007 values soon, as well?

Edited June 2, 2009 by deeplyblue