House Price Crash Imminent

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

http://www.mortgagerates.org.uk/news/house-price-cras/

Market insiders are no longer asking themselves whether there will be a house price crash but instead how deep the crash will be. September alone slashed house prices down £6,000.

Ed Stansfield, chief property economist at Capital Economics, said: “The fact that house prices now appear to be on their way back down after the past year’s rather unexpected surge should not be a surprise. Not only is the market overvalued on most measures, but house price falls are entirely consistent with the drop in buyer inquires and mortgage approvals that we have seen in recent months. They also square with reports that lenders have begun to tighten credit standards again.”

PS. Don't know where they live - it's been crashing in these parts for a good couple of years now

[dnjc]

http://www.mortgagerates.org.uk/news/house-price-cras/

Market insiders are no longer asking themselves whether there will be a house price crash but instead how deep the crash will be. September alone slashed house prices down £6,000.

Ed Stansfield, chief property economist at Capital Economics, said: “The fact that house prices now appear to be on their way back down after the past year’s rather unexpected surge should not be a surprise. Not only is the market overvalued on most measures, but house price falls are entirely consistent with the drop in buyer inquires and mortgage approvals that we have seen in recent months. They also square with reports that lenders have begun to tighten credit standards again.”

PS. Don't know where they live - it's been crashing in these parts for a good couple of years now

everybody say their HPC prayer before bedtime...

Our savings who art in bank,

hallowed be thy name.

Thy kingdom come.

Thy will be done

in England as it is in Ireland and Spain.

Give us this day our daily bear food,

and forgive us our trespasses,

as we forgive those bulls who trespass against us

and lead us not into estate agents,

but deliver us from evil.

...

[lets get it right]

http://www.mortgager...use-price-cras/

Market insiders are no longer asking themselves whether there will be a house price crash but instead how deep the crash will be. September alone slashed house prices down £6,000.

Ed Stansfield, chief property economist at Capital Economics, said: "The fact that house prices now appear to be on their way back down after the past year's rather unexpected surge should not be a surprise. Not only is the market overvalued on most measures, but house price falls are entirely consistent with the drop in buyer inquires and mortgage approvals that we have seen in recent months. They also square with reports that lenders have begun to tighten credit standards again."

PS. Don't know where they live - it's been crashing in these parts for a good couple of years now

Remind me, how long has Ed been making that prediction. 7 years? More? He is definitely in the 'a stopped clock is right twice a day' category.

As for the crash in your area - are you in the same area as The Masked Tulip by any chance? He was posting just a couple of weeks ago that he despaired of prices ever falling in his area of Wales and posted houses in West Wales (I think) at similar prices to the Home Counties.

Edited November 1, 2010 by Let's get it right

[lets get it right]

everybody say their HPC prayer before bedtime...

Our savings who art in bank,

hallowed be thy name.

Thy kingdom come.

Thy will be done

in England as it is in Ireland and Spain.

Give us this day our daily bear food,

and forgive us our trespasses,

as we forgive those bulls who trespass against us

and lead us not into estate agents,

but deliver us from evil.

...

Hmmm, people are beginning to talk about bond holders having to take a bath. How long before dirty savers get asked to help out - those with the broadest shoulders etc.

[The Masked Tulip]

Remind me, how long has Ed been making that prediction. 7 years? More? He is definitely in the 'a stopped clock is right twice a day' category.

As for the crash in your area - are you in the same area as The Masked Tulip by any chance? He was posting just a couple of weeks ago that he despaired of prices ever falling in his area of Wales and posted houses in West Wales (I think) at similar prices to the Home Counties.

I am still despairing.

[midnitecruiser]

Confident they'll be some further dips (in public sector regions), but I don't see a proper crash unless there's forced sales. Rates are far too low for that to happen on a large enough scale. Not enough people 'have to sell'. Lets face it, they'll do all they can to keep increase interest rates low for ages and if they do increase it, it'll be marginal. I personally think we'll have low rates for a long time and unchanged well into next year. The housing market will become stagnate for many years. This crash will only happen when people have to sell. Or do others see it differently?

[Reluctant Heretic]

everybody say their HPC prayer before bedtime...

Our savings who art in bank,

hallowed be thy name.

Thy kingdom come.

Thy will be done

in England as it is in Ireland and Spain.

Give us this day our daily bear food,

and forgive us our trespasses,

as we forgive those bulls who trespass against us

and lead us not into estate agents,

but deliver us from evil.

...

Fantastic - well done.

[GordonBrownSpentMyFuture]

http://www.housepricecrash.co.uk/forum/index.php?showtopic=153707

[BuyInOxford]

Confident they'll be some further dips (in public sector regions), but I don't see a proper crash unless there's forced sales. Rates are far too low for that to happen on a large enough scale. Not enough people 'have to sell'. Lets face it, they'll do all they can to keep increase interest rates low for ages and if they do increase it, it'll be marginal. I personally think we'll have low rates for a long time and unchanged well into next year. The housing market will become stagnate for many years. This crash will only happen when people have to sell. Or do others see it differently?

What you say makes sense but it doesnt take into account there are always people who need to sell for one reason or another (divorce, death, moving jobs) and the banks are no longer financing huge mortgages to pay the overvalued prices.

[Caveman]

Confident they'll be some further dips (in public sector regions), but I don't see a proper crash unless there's forced sales. Rates are far too low for that to happen on a large enough scale. Not enough people 'have to sell'. Lets face it, they'll do all they can to keep increase interest rates low for ages and if they do increase it, it'll be marginal. I personally think we'll have low rates for a long time and unchanged well into next year. The housing market will become stagnate for many years. This crash will only happen when people have to sell. Or do others see it differently?

Sadly, I agree with the above. People will hang on to their precious homes (and imaginary wealth) for as long as possible. Generally, most believe that property is still a good bet med-long term. It will take many more falls (possibly to below the previous lows) before reality sinks in.

[james_chch]

This crash will only happen when people have to sell. Or do others see it differently?

I used to think the same, but no longer. IR's are a big factor, but not the only one, and all the others are changing. It has recently come to light that around 50% of mortgages from 2004 - 2009 were without income verification, and that's stopping. Housing Benefit has been propping up BTL, and that's getting cut. BOMAD may be running out of money. If all these other props to the housing market go, then it can correct to the levels it should be without the need for forced sellers.

And the biggest prop of all is presumably just bubble mania - this is a bubble after all, and a lot of it will have been driven purely by psychology, regardless of the props. If the psychology changes, then that could crash it without any other changes.

[bricor mortis]

I used to think the same, but no longer. IR's are a big factor, but not the only one, and all the others are changing. It has recently come to light that around 50% of mortgages from 2004 - 2009 were without income verification, and that's stopping. Housing Benefit has been propping up BTL, and that's getting cut. BOMAD may be running out of money. If all these other props to the housing market go, then it can correct to the levels it should be without the need for forced sellers.

And the biggest prop of all is presumably just bubble mania - this is a bubble after all, and a lot of it will have been driven purely by psychology, regardless of the props. If the psychology changes, then that could crash it without any other changes.

good post, immigration patterns could also be a factor ( in either direction ), I dont know the latest stats but if the population decreases or increases it has to have an effect on landlords in major population centres.

[50sQuiff]

I used to think the same, but no longer. IR's are a big factor, but not the only one, and all the others are changing. It has recently come to light that around 50% of mortgages from 2004 - 2009 were without income verification, and that's stopping. Housing Benefit has been propping up BTL, and that's getting cut. BOMAD may be running out of money. If all these other props to the housing market go, then it can correct to the levels it should be without the need for forced sellers.

And the biggest prop of all is presumably just bubble mania - this is a bubble after all, and a lot of it will have been driven purely by psychology, regardless of the props. If the psychology changes, then that could crash it without any other changes.

I agree. The two biggest factors at play in the housing market have been credit and sentiment. We've just passed extreme historical peaks in both, unlikely to be repeated for centuries. Now the credit has been pulled from beneath the sheeple like a cheap Ikea rug. Sentiment is slowly starting to turn down and you can feel the fear phase is here.

I've posited before that we were at such a psychological high in this housing bull market (to the extent that it became the raison d'etre for most of the population), that I fear the capitulation phase will be downright scary this time round.

Edited November 2, 2010 by 50sQuiff

[Number79]

The plates are still spinning away. Despite all of the bear food it does not appear that it is taking much effort to keep the plates spinning either.

Father in law just remortgaged his btl's. I thought he was in for trouble, dont know the figures but I know that they are both mortgaged and interest only, wifey reckons he got a good deal. Apparently he is paying pennies for each BTL and ended up with a rate of 0.75%.

[tim123]

http://www.mortgagerates.org.uk/news/house-price-cras/

Market insiders are no longer asking themselves whether there will be a house price crash but instead how deep the crash will be. September alone slashed house prices down £6,000.

Ed Stansfield, chief property economist at Capital Economics, said: “The fact that house prices now appear to be on their way back down after the past year’s rather unexpected surge should not be a surprise. Not only is the market overvalued on most measures, but house price falls are entirely consistent with the drop in buyer inquires and mortgage approvals that we have seen in recent months. They also square with reports that lenders have begun to tighten credit standards again.”

PS. Don't know where they live - it's been crashing in these parts for a good couple of years now

Somewhere in the South.

Most places that I look, asking prices are above 2007 peak and many EAs tell me that they are selling at those prices (allbeit in small numbers).

tim

[dances with sheeple]

Confident they'll be some further dips (in public sector regions), but I don't see a proper crash unless there's forced sales. Rates are far too low for that to happen on a large enough scale. Not enough people 'have to sell'. Lets face it, they'll do all they can to keep increase interest rates low for ages and if they do increase it, it'll be marginal. I personally think we'll have low rates for a long time and unchanged well into next year. The housing market will become stagnate for many years. This crash will only happen when people have to sell. Or do others see it differently?

Rates only apply to people who can`t really afford it and are hanging on? Many will want to sell, and many will need to sell for one of hundreds of reasons, and the only way to do this now is to drop the price? I know someone who bought a flat for 60k in a block where peak price ended up at 170k, so someone has a nice cushion to drop their price, and someone doesn`t, the late comers will be hung out to dry as most people would rather get on with their life than play mexican standoff over house prices IMO. The consciousness in the country is being primed for drops, most sheeple will soon just accept this as the norm.

[Si1]

The plates are still spinning away. Despite all of the bear food it does not appear that it is taking much effort to keep the plates spinning either.

Father in law just remortgaged his btl's. I thought he was in for trouble, dont know the figures but I know that they are both mortgaged and interest only, wifey reckons he got a good deal. Apparently he is paying pennies for each BTL and ended up with a rate of 0.75%.

long term investment using short term interest rates

still looks like it will take years to play out

[dances with sheeple]

I used to think the same, but no longer. IR's are a big factor, but not the only one, and all the others are changing. It has recently come to light that around 50% of mortgages from 2004 - 2009 were without income verification, and that's stopping. Housing Benefit has been propping up BTL, and that's getting cut. BOMAD may be running out of money. If all these other props to the housing market go, then it can correct to the levels it should be without the need for forced sellers.

And the biggest prop of all is presumably just bubble mania - this is a bubble after all, and a lot of it will have been driven purely by psychology, regardless of the props. If the psychology changes, then that could crash it without any other changes.

Bang on, just the fact that the Tories are back in power is scaring people who have only known Liebour and their money spunking ways.

[dances with sheeple]

I agree. The two biggest factors at play in the housing market have been credit and sentiment. We've just passed extreme historical peaks in both, unlikely to be repeated for centuries. Now the credit has been pulled from beneath the sheeple like a cheap Ikea rug. Sentiment is slowly starting to turn down and you can feel the fear phase is here.

I've posited before that we were at such a psychological high in this housing bull market (to the extent that it became the raison d'etre for most of the population), that I fear the capitulation phase will be downright scary this time round.

Buying houses, looking right, and consuming is all that most people have had to live for the last decade or so, you are right, it will get very messy. Can`t wait

[_w_]

Confident they'll be some further dips (in public sector regions), but I don't see a proper crash unless there's forced sales. Rates are far too low for that to happen on a large enough scale. Not enough people 'have to sell'. Lets face it, they'll do all they can to keep increase interest rates low for ages and if they do increase it, it'll be marginal. I personally think we'll have low rates for a long time and unchanged well into next year. The housing market will become stagnate for many years. This crash will only happen when people have to sell. Or do others see it differently?

I think Japan invalidates your theory. They did absolutely everything possible to avoid 'forced sales' but in the end the market well and truly crashed, it just took a very long time. Restricting sales (as successive UK governments have been engaged in) only serves to slow down falls, but you also need buyers. And by any measure imaginable purchasers cannot afford UK houses at current prices unless we perpetuate the ponzi scheme that is British banking. Unlikely.