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Hpc Is Far From Over Lets Put Some Dummies Stats Together

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Agreed. If we can save even one poor sap from screwing up their life....

Here is the graph I nicked from Belfast Boy's sig and just posted on another thread. I've left the quotes in from the sig, too, because they are apt:

"There will never be another period, in our lifetime, when property changes hands for the multiples of salary that we reached recently. The one-off credit event that we have witnessed, over the last ten years, is gone and it is not coming back!" Dances with Sheeple

The base level - from which UK housing bubbles form - is 3 to 3.5 times single income, as can be seen on this Nationwide graph -


"The mistake I think lots of people are making; is that they are assuming the real estate market, in a few years time, will exist in the same economic conditons that exist today." VedantaTrader

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I am the least able on HPC to do this but yesterday was full of people wobbling re HPC and I know we have done this before on HPC but can you help list ALL the reasons property is not going back up. It seems amazing that stats not even going up but staying static or 0.3% down is seen as recovery despite Nationwide / Hometrack etc saying this isn't a recovery. I just thought that if we could brainstorm some ideas maybe they could all then be put together and we can just link it to any thread that is heading towards a Black Monday / Tuesday or Sunday........thinking perhaps prices are going back up. FACTS are facts and don't just disappear because a few cash rich buyers buy a couple of overvalued properties. Many on this website are clearly confident about what is happening, are intelligent and well informed but there must be many like me that it has taken months to try to get to grips with what is going on and I think that accounts for wobbles because we doubt what we know and at times of doubt it is good to have something to refer to , all in one place.

So can someone help with some figures please?

Has anyone got a table showing mortgage approvals 2007 - 2008 - 2009 and % differences?

I think I have seen a graph somewhere but its good to have ACTUAL figures Jan 07 - Jan 08 - Jan 09 % differences

Jan 07 to Jan 09 / Feb 07 to Feb 09 etc would be good.

Someone on HPC said recently:

BoE Mortgage approvals = 38,000

average since 1993 = 93,000

so we are 60% short of the long term average

These kind of snippets seem helpful to put things in perspective.

We know that :

Gross mortgage lending declined to an estimated £10.4 billion in April, down 9% from £11.4 billion in March and 60% from £26.1 billion in April 2008, according to new data from the Council of Mortgage Lenders.

There is a slight fall for seasonal reasons as Easter fell in April this year (Easter was in March in 2008). Taken together, lending for March and April is down 57% on a year earlier.

We also know:

Mortgage lending 2007 - £363bn

Mortgage lending 2008 - £258bn

Forecast lending 2009 (CML) - £145bn

Therefore mortgage lending is down nearly 2/3rds due to the closure of the RMBS market.

This is a link to a helpful chart showing how the RMBS market fueled the bubble accounting for £200bn of lending by 2007, go to bottom of page and:


There is a reference to the RMBS market at this link:

Why Property Prices Have Much Further to Fall

One reason for this boom in cheap home loans was the rise in 'residential mortgage-backed securities' (RMBS). These were bonds made up of parcels of mortgages which were sold to major investors, such as pension funds and insurance companies. Alas, as the US and UK housing markets started to slump, the value of these mortgage bonds dived and the market froze. The effective collapse of the RMBS market means that this one-off credit event may not return for years, if not decades

So that is £200bn of funding gone leaving lenders reliant on dwindling deposits.

Economists seem to agree that for prices to stop falling approvals need to double (even then the last crash prices contd to fall even when approvals stabilised at something like normal), yet nobody seems to be able to answer how we can get approvals to double at current property values when lenders are at least £200bn short of what they had available in 2007, and that is going to be a LONG TERM problem, there has been talk by the building societies of "lending drying up, evaporating."

Has anyone got a table showing how many properties were coming on the market in 2007 - 2008 compared with now?

How many properties are selling % now in comparison to 2007 - 2008? This seems relevant when people keep saying that there are so few properties being sold that stats from Nationwide etc are skewed.

This was another helpful snippet from HPC:

Average asking price = £227.4K Source Rightmove

Average selling price = £155K Source Halifax

Average discount = 31.8% of asking price

So the reason property will contd to fall are:

1. Interest rates at the lowest they can be there is only one way for them to go . Previous crashes I believe property went back up as interest rates fell making buying cheaper but this crash will be the reverse of that.

2. Mortage Lending down £200bn , lenders will now have to go back to how it was pre 2001 when mortgage lending came from deposits. However, deposits are dwindling (low interest rates / Moodys downgrades leading to councils etc having to withdraw funds ), + lenders now need to balance books and cover potential futures losses .

3. Loan to Income much discussed on HPC. FSA and IPPR have spoken of regulation including caps on loan to income of about 3.5.

The problem, according to a range of economists surveyed by The Daily Telegraph, is that the rise in house prices in recent years was due less to supply and demand fundamentals − the famous mismatch between the paucity of new homes being built and the glut of people wanting to buy − than to the cheap availability of mortgages. If, as some suspect, this credit super-boom will be followed by a long-term drought, whether because banks simply do not recover fully or because the Government imposes new regulations on lending, the implication may be that house prices simply never recover.

Given that Lord Turner's review last week mooted the possibility of a limit for loan-to-value ratios, Capital Economics founder Roger Bootle says: "What Lord Turner is suggesting seems to be a recipe for much lower house prices."

Whether this transpires is yet to be seen. Others anticipate an eventual return to health for housing. However, one message is universally clear: don't expect prices to stop falling any time soon.

4. ????????????????

5. ???????????????????

It also seems important to remember that property IS selling 25 - 30% below peak, the figures appear to confirm this. Just because it does not appear to be happening in your street the figures seem to confirm IT IS HAPPENING. Properties that ARE selling (and they are very few) are selling 30% below peak. There seems to be a large % of people who do not want to sell if they can't get 2007 prices and they are just sitting there, but the figures seems to confirm that those that are selling are selling 30% below peak.

This article back in February said:

Sellers Need to Reduce Prices

How much should you knock off?

How much you reduce your price by depends, to an extent, on regional factors. The few properties that sellers have sold in recent months have done so at a price around 15%-18% lower than at the peak in 2007, on average. Most buyers will be thinking of another year of falls. Therefore pricing your property at around 30% below the peak will work for most sellers.

Many buyers will be unaware of regional differences, so you may find it hard to get as many enquiries if you reduce it by significantly less than 30% for regional reasons. (Parts of the North West, South West, South East and London are such places.) On the other hand, if prices have fallen faster in your area you might get away with just a 30% cut.

I do think people are living in DENIAL , if property that IS selling is selling 30% off peak we are talking about £300000 properties for £210000 , just because there isn't one in your area , please remember there wasn't one in the area they sold for £210000 either, just ONE seller willing to take accept a 2009 valuation , the others either follow or wait 15 years .

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Instantly found another stat .


b]UK house prices continue falling as actual house sales crash by sixty percent[/b]

Although these figures can lag by up to six months; the period covered is in fact November to February, the most startling revelation is the severe drop in sales transactions. Nationally there was a sixty percent fall in sales, in February the number of transactions slumped to just 25,592, half of the 51,121 recorded in February 2008. In London 2,933 properties changed hands compared with 7,152 last year, a fall of circa 65%.

The mainstream media will generate plenty of opinion today suggesting a 'bottom' of sorts has been reached by the housing market. With transaction numbers at lows not seen since the seventies and mortgage lending 60% down year on year this would be a premature assumption when mortgage lending and sales transactions suggest an undeniable fact; the housing market is in fact dead...

So is the Land Registry figures for property price falls 6 months behind too?

Edited by Sybil13

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