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F T : House Market Has Crashed 25% In 10 Areas

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http://www.ftadviser.com/FTAdviser/Mortgages/News/article/20110620/b6b563b4-9b0d-11e0-9a5a-00144f2af8e8/Weakest-areas-see-25-drop-in-house-prices.jsp

Weakest areas see 25% drop in house prices
Cara Waters
FTAdviser
Published Monday , June 20, 2011
New research shows that ten economically weakest areas in UK see twice the drop as ten strongest since 2008.
Research by Halifax has found that house prices in the ten areas that have experienced the sharpest drop in economic activity since 2008 have fallen at a far faster rate than those in the ten strongest areas.
Since 2008, house prices have fallen, on average, by almost a quarter in the ten local areas with the biggest falls in economic activity, almost double the average 13 per cent decline in house prices in the ten areas that recorded the smallest falls in economic activity.
Moreover, the average house price in the ten local areas that recorded the biggest rise in economic activity in the UK between 1998 and 2008 rose by 219 per cent, or £146,984, from an average of £67,178 in 1998 to £214,162 in 2008.

So they are beginning to admit the crash at last. I have bought for about 25% off peak and that's in East Sussex!

20% is a crash after all. 10% a correction.

The weakest areas will probably see 40% or more down before this thing ends and a bottom is reached.

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So they are beginning to admit the crash at last. I have bought for about 25% off peak and that's in East Sussex!

20% is a crash after all. 10% a correction.

The weakest areas will probably see 40% or more down before this thing ends and a bottom is reached.

The one area where the crash is not apparent is in the asking prices in London. Many are still asking for 2007 peak prices with little prospect of attaining the price. However the odd sale deludes and because the house down the road went for £600K, the next sellers pop it up for £625K!! Madness considering there is now one less buyer in the market.

However I believe that the active buyers have been pretty much exhausted, even in London (excluding the mega rich), and that the only way is down.

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The weakest strongest areas will probably see 40% or more down before this thing ends and a bottom is reached.

The weakest areas will see falls of 60%+

Some propertyies will sell for 50p.

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About right with what I see - roughtly 20% to 30% down since 2007.

At the moment.

Remember the last slowdown lasted from 1990ish thru to 1998ish - roughtly 8 years.

Rough rule of thumb is that this will will be twice as long - say 15 years.

We are about 3 years in.

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About right with what I see - roughtly 20% to 30% down since 2007.

At the moment.

Remember the last slowdown lasted from 1990ish thru to 1998ish - roughtly 8 years.

Rough rule of thumb is that this will will be twice as long - say 15 years.

We are about 3 years in.

Not saying much. The prices in 2007 were insane. So they have gone from insane to just ridiculous. I agree this "crash" will be longer than 90's and deeper, depending on the money printing situation. They would be better just getting it over with, than dragging the "pain" on for decades.

Edited by Sir John Steed

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The one area where the crash is not apparent is in the asking prices in London. Many are still asking for 2007 peak prices with little prospect of attaining the price. However the odd sale deludes and because the house down the road went for £600K, the next sellers pop it up for £625K!! Madness considering there is now one less buyer in the market.

However I believe that the active buyers have been pretty much exhausted, even in London (excluding the mega rich), and that the only way is down.

Well there's no sign of it yet. My 'anecdotal' post observed a North London flat completed at 64% above 2006 buying price, <£200 spent on decoration. I am not saying this is typical - in fact my contention is that 'typical' doesn't apply as often as the general opinion here seems to think.

I believe the driving force is ludicrously high levels of rent. How long these will be maintained I do not know.

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The article's behind a pay wall. What are the ten areas that have declined 25%?

If it's the article in the OP, I can see it without paying (I am abroad, does that make a difference?) and the article does not say which they are. In fact the article is pretty poor.

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Not to mention the effect of inflation since the Halifax peak of August 2007. Overall they are showing a -20% nominal fall since August 2007 averaged across the UK, but this becomes a shade under -30% once you have multipled .8 by .89 to adjust for RPI. I am expecting the big 30 to be breached on the next release. This compares to a real collapse in prices between May 1989-October 1995 of -33%.

I expect great crash2 to now exceed great crash 1 by a considerable margin, not least because of rightmove's comments today that buyers have evaporated whilst sellers pile on. I think it is a case of the last bear having bought.

Edited by crashmonitor

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Not saying much. The prices in 2007 were insane. So they have gone from insane to just ridiculous. I agree this "crash" will be longer than 90's and deeper, depending on the money printing situation. They would be better just getting it over with, than dragging the "pain" on for decades.

Don't forget there were voices on forums saying the prices were already ridiculous by 2005 or even 2002 - and unfortunately we all know the rest!

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Not saying much. The prices in 2007 were insane. So they have gone from insane to just ridiculous. I agree this "crash" will be longer than 90's and deeper, depending on the money printing situation. They would be better just getting it over with, than dragging the "pain" on for decades.

According to Halifax we have gone from a price to earning ratio of 6 at the peak to 4.5. The previous crash needed a ratio of 2.9 to get the f**ker back on the launch pad. So totally agree we have some way to go.

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Not saying much.

Yep. Not selling much either.

I would guess prices are about 2003/2004ish in nominal terms.

But the number of houses selling is sooooo small that this is total false market.

Its been like this since 2006-ish. I would guess there is 3 to 4 years of unsold stock in the market - normal stuff - debts divorces death.

Plus most of the BTL from after 2003.

IRs go up. Supply increases massively. S*d all finance to soak up the supply.

Bloodbath.

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The article's behind a pay wall. What are the ten areas that have declined 25%?

Piecing together info from a few different articles on this, I think the ten areas are Belfast, Hull, Blackpool, Walsall, Wolverhampton, Coventry, Stoke-on-Trent, East and North Ayrshire, Inverclyde, and East Renfrewshire and Renfrewshire.

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Yep. Not selling much either.

I would guess prices are about 2003/2004ish in nominal terms.

But the number of houses selling is sooooo small that this is total false market.

Its been like this since 2006-ish. I would guess there is 3 to 4 years of unsold stock in the market - normal stuff - debts divorces death.

Plus most of the BTL from after 2003.

IRs go up. Supply increases massively. S*d all finance to soak up the supply.

Bloodbath.

You've said it. Any market can move sideways on low volumes because any market is affordable on an individual transaction basis, but you can't carry on a false market indefinitely. A market has to become affordable in aggregate eventually because most of the stock has to be turned over at some stage.

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Couple across the road just sold a two bed semi with on street parking which they had actually changed from a three bed to a two by knocking through to create a new giant bathroom. They listed for 525k so would expect the price achieved to by slightly off this. Within days the house three doors along goes on for 565k.

The couple bought five years ago for 350k so over 45% profit for little more than a reasonable fit out.

The madness continues and i'm running out of time.

Edited by W1zard

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Couple across the road just sold a two bed semi with on street parking which they had actually changed from a three bed to a two by knocking through to create a new giant bathroom. They listed for 525k so would expect the price achieved to by slightly off this. Within days the house three doors along goes on for 565k.

The couple bought five years ago for 350k so over 45% profit for little more than a reasonable fit out.

The madness continues and i'm running out of time.

Did both sales complete?

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Did both sales complete?

For sale sign only just appeared for the 565k house a few doors along. Occupants vacating the two bed were packing up the car over the weekend. IG9 is considered a desirabe area but the prices paid are beyond a joke if you look at the prices previously paid for same properties only a few years ago. Very disheartening.

Edited by W1zard

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If it's the article in the OP, I can see it without paying (I am abroad, does that make a difference?) and the article does not say which they are. In fact the article is pretty poor.

...agreed ..the article is vague ...poor journalism ...the content doesn't match the heading .... :rolleyes:

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Having read through many of the comments wrt London being immune to drops, I have a few remarks:

1) London is not only part of the UK markets, it is also part of a market amongst European capital cities. With the currency drop in 2008/9, it began to appear cheap to some prospective buyers.

2) A great many oil rich families/ dynasties from the middle east who would otherwise have bought in New York or Washington; decided not to after 9/11, and bought in London instead. (This would certainly correlate with luxury goods companies having had a bouyant couple of years).

3) Watching the US market is quite instructive. Having dropped much further than the UK market; it is heading south again in no small way. Markets were reasonable or moderate on the way up; and they don't have to be on the way down.

Hey ho

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For sale sign only just appeared for the 565k house a few doors along. Occupants vacating the two bed were packing up the car over the weekend. IG9 is considered a desirabe area but the prices paid are beyond a joke if you look at the prices previously paid for same properties only a few years ago. Very disheartening.

At 565k your going to be targeting the very very rich.

What's so special?

If your spending half a million you want a very premium property.

Highly paid jobs for life in a well to do area or a remote castle with a hell of a lot of land.

I could buy most of my street and retire very comfortably by charging below market rent to friends.

With half a million worth of local 3 bed properties, let at £30 a week and I'd be rich in comparison to my peers.

I presume its a debt junkie buying with a mortgage, rather than a sane man and hard earnt cash!

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