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eric pebble

Daily Telegraph: House Prices: Further Falls Look Likely

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So, basically, house sellers , house advertisers and mortgage lenders think prices are on the way up.

It's just these pesky house buyers that will not conform.

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To try to put a new shine on this conversational chestnut – whither house prices? – consider the chart on this page.
00

Anyone see a chart? I can't.

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00

Anyone see a chart? I can't.

It's probably been whisked off and deleted by the Vested Interests....

This site has been hard to get on today, once again.... I often think that the VIs are trying to sabotage this site..... ;)

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According to Nationwide's calculations, the typical home loan now absorbs 31pc of take-home pay for people with median earnings, compared to the long-term average of 35pc.

Wow 31pc, the current 'rent' i.e. interest I'm paying on my mortgage is a whopping 2.97% of disposable income. :P

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So, basically, house sellers , house advertisers and mortgage lenders think prices are on the way up.

It's just these pesky house buyers that will not conform.

House buyers can be very disrespectful at times ...

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Looking at some of the papers this weekend I was struck by how bullish they were, of course there were elements of coninued trouble ahead, but this seemed universally to be treated positively rather than negatively... I certainly do think consumer attitudes have changed.

The telegraph... promises a lot with its headline, but most of the article is guff... the only telling point is the final one about the income ratio... they spent a lot of time on relationship between gold price and house prices... only to conclude that currently they were ON the long term trend line going back 50 years ( I've never had much time for these gold/silver etc charts)

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Looking at some of the papers this weekend I was struck by how bullish they were, of course there were elements of coninued trouble ahead, but this seemed universally to be treated positively rather than negatively... I certainly do think consumer attitudes have changed.

The telegraph... promises a lot with its headline, but most of the article is guff... the only telling point is the final one about the income ratio... they spent a lot of time on relationship between gold price and house prices... only to conclude that currently they were ON the long term trend line going back 50 years ( I've never had much time for these gold/silver etc charts)

The difference with the current situation is however what proportion of your income is required to service the borrowing. A 5 times income/cost ratio is one thing when rates are 8%,quite another when you can borrow for 4%.As long as people don't lose their jobs then negative equity is only a problem if you need to sell.If you are on a tracker it's better still.

Personally I have always reckoned on a total price fall of 30% and I still think that will be the case.Where are those who predicted 80% falls? Does anyone still believe that?

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Where are those who predicted 80% falls? Does anyone still believe that?

Interesting question. I wonder who does.

I used to vote for "50-60% falls" in the polls, and I still would. But I admit I'm slightly less bearish than I was a year ago. I used to think 50% fall minimum, now I think 50% fall maximum.

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The difference with the current situation is however what proportion of your income is required to service the borrowing. A 5 times income/cost ratio is one thing when rates are 8%,quite another when you can borrow for 4%.As long as people don't lose their jobs then negative equity is only a problem if you need to sell.If you are on a tracker it's better still.

Personally I have always reckoned on a total price fall of 30% and I still think that will be the case.Where are those who predicted 80% falls? Does anyone still believe that?

Quite, I'd be close to your estimate as well my outside is 35%... but whose quibbling over 5% of a dodgy set of figures anyway.

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So, basically, house sellers , house advertisers and mortgage lenders think prices are on the way up.

It's just these pesky house buyers that will not conform.

'Compulsory Purchase Orders'?

It's the only way forward

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I think it's a fair assumption that some types of housing in some areas(read flats,luxury,city centre) will see 80%+ from peak.It certainly happened in Japan

average 3 bed semi will probably be 60%+ from peak ,but noone has a crystal ball.

The bulls are getting some good running out of the stock market rally and the general feelgood factor,but the fundamentals are dire and everyone who has been right thus far,Mish,Weiss,KD,numerous peopole on here are all saying it's gonna get worse yet.

Funny I'd agree with the first bit.... the 80% club probably already has some early members and I'd bet they either come from the badly planned 2 bed investment flat land, the cancer swathe (those suffering extreme financial problems) , the unmortgageable (those with house types where the only lenders who would ever lend on them have long gone eg flats over pubs or restaurants) etc

Where I strongly disagree is that a standard (if there is such a thing) 3 bed semi would drop by 60%...... whilst I reckon the national figures may go to 35% obviously within that if some have fallen 80%, others will have fallen less and the standard 3 bed semi would be in that group I would argue.

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"According to Nationwide's calculations, the typical home loan now absorbs 31pc of take-home pay for people with median earnings, compared to the long-term average of 35pc."

yet according to the CML, the figure is less than half that,

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I'd say it looks terminal over the medium term.

Hell yeah. This thing's going to at least completely unwind all the gains. The houses I bought for 50k 10 years ago were values at 150k at peak and will be worth 50k max at the trough.

When boe rate is back to modern day historic average of 7-8% and the banks add their margin making mortgage rates 9 or 10% then people won't be touching property with someone else's...

Edited by ader

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Debt is going to be 200% of GDP ............../

and this rather presumes that average salary holds at 20k.add in some geographical anomalies eg north versus south,I'd say it looks terminal over the medium term.

Yup :P

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Gross rental yields here are in many cases here just 5-6%.

That suggests significant falls in that area of the residential market. Taking account impaired mortgages and other costs there are many landlords who aren't even covering their mortgage interest each year, which means repo's and distressed sales now approaching, followed by some serious double digit falls.

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When rates go up these words will appear in large bright letters in the skies above the uk, GAME OVER - PLEASE INSERT COINS (into gordon`s anus, he will be needing them) Carnage ahead.

The thought of Gordon's anus has made be positively sick..... :lol:

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Debt is going to be 200% of GDP and then some(if you include public sector pensions,PFI liabilities etc).unmeployment,already 4 million if you include excess incapacity claimants since 1997(sounds harsh,but probably fair),sterling will be somewhat weaker,ergo the price of imports will have risen.

all in,significantly lower disposable income levels are a near certainty.If the average price peaked at 180k,the median average salary is 20k,a reversion to 3 times single salary would give an average hosue value of circa 60k.120k off 180k is 66% off peak.

Add a sterling decline to the mix & you soon have the 80% (& more) that abharrison is so dismissive of

& for 15 - 25 years.

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"According to Nationwide's calculations, the typical home loan now absorbs 31pc of take-home pay for people with median earnings, compared to the long-term average of 35pc."

yet according to the CML, the figure is less than half that,

The CML are

F*CKING LIARS!

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The difference with the current situation is however what proportion of your income is required to service the borrowing. A 5 times income/cost ratio is one thing when rates are 8%,quite another when you can borrow for 4%.As long as people don't lose their jobs then negative equity is only a problem if you need to sell.If you are on a tracker it's better still.

Personally I have always reckoned on a total price fall of 30% and I still think that will be the case.Where are those who predicted 80% falls? Does anyone still believe that?

http://www.espc.co.uk/Buying/275421.html

So 35% off this beauty in Edinburgh, the global centre of banking excellence ( just ask Fred) will take us to sustainable fair value will it :lol::lol: ( the developer has just gone bust as well by the way) I could post links to overpriced 3 bed terraces but I can`t be bothered, this one has comedy value. The "Good stuff/ family stuff wont drop much" club need to WAKEN UP, it was an unprecedented orgy of greed and delusion and if the unwinding lets someone off with just a 50% drop on their "sought after" terraced pile surrounded by curtain flappers that would inspire an early Genesis lyric they will be doing well.

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Hell yeah. This thing's going to at least completely unwind all the gains. The houses I bought for 50k 10 years ago were values at 150k at peak and will be worth 50k max at the trough.

When boe rate is back to modern day historic average of 7-8% and the banks add their margin making mortgage rates 9 or 10% then people won't be touching property with someone else's...

Is 7-8% the historic average for IR's? Is there some data I can see for that?

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