Jump to content
House Price Crash Forum

Nationwide Warns Of 'natural Correction' In House Prices


Recommended Posts

I believe the government has done what it set out to do in their minds, and that is to give time, six years now, to enable banks to steal more money ready for a severe (they hope soft) correction. Whether it is enough to stop the banks crashing totally only time will tell. This is the end of the line. When thing like price corrections are spoken of openly in the media then it means it is now time for the show to start..

ps..Natural sounds so warm and cuddly doesn`t it.?

Definitely feels like the end of the line, modest houses in modest areas of London (tiny 3 bed terraced houses in Zone 3) going for 750K, you know its over when you see that, coupled with open talk in the media of corrections, you know its coming

Link to post
Share on other sites
  • Replies 250
  • Created
  • Last Reply

Top Posters In This Topic

Definitely feels like the end of the line, modest houses in modest areas of London (tiny 3 bed terraced houses in Zone 3) going for 750K, you know its over when you see that, coupled with open talk in the media of corrections, you know its coming

Can anyone remember if the press openly talked about bubbles and corrections prior to 07/08, or did it all come "out of the blue"?

Link to post
Share on other sites

There is only a bubble in London and the South East - in most other areas prices are still below 2007 prices, seven years on.

The likelyhood therefore is that any dramatic falls will be limited to London/SE.

I believe that when London crashes it will inevitably bring all prices down. Maybe in not such dramatic fashion up north but the house price indices will show average drops and so all potential buyers will demand discounts in every area of the country. ! I agree prices have not risen in some other areas of UK but they have just been treading water and so will fall, when London goes..

Link to post
Share on other sites

Nationwide data is normally out in the last week of the month. Forex Factory says it's not until next week though. Are we being prepped for a big MoM fall on the back of MMR?

House price inflation was the only thing keeping us from European style deflation, with the service sector buoyant and counterbalancing deflation in general shop prices. You can bet we will be in trouble if the one driver of UK inflation goes negative. Under that scenario interest rate rises will be off the table, but I suppose we shouldn't care if property has another down leg.

Edited by crashmonitor
Link to post
Share on other sites

There is only a bubble in London and the South East - in most other areas prices are still below 2007 prices, seven years on.

The likelyhood therefore is that any dramatic falls will be limited to London/SE.

Look at the graph on the front page here: http://www.housepricecrash.co.uk/

What makes you think that 2007 prices are not bubble territory, the fact that 7 years has passed since then?

Link to post
Share on other sites

There is only a bubble in London and the South East - in most other areas prices are still below 2007 prices, seven years on.

The likelyhood therefore is that any dramatic falls will be limited to London/SE.

Tend to agree with you, we are barely above the levels seen at the height of the crash in 2009 up north. Indeed in some areas it probably is at the bottom. Why should it go even lower than that when we had higher interest rates and cataclysmic banking meltdown.

Not the Phil Spencer perchance?

Link to post
Share on other sites

Can anyone remember if the press openly talked about bubbles and corrections prior to 07/08, or did it all come "out of the blue"?

Not quite like now - but to be fair the ghost of 2007/8 is till haunting us.

'Irrational exuberance' is a phrase from the BoE (I think 2005) that sticks in my mind.

Link to post
Share on other sites

With that view still persisting hard today, full of excuses for buyers who have paid x2-x4+. Slacker the other day, almost totally unchallenged, or only light-weight resistance to his position. "Unfair" for a non-owner to buy at £250K for similar house someone else paid £500K for, or same house in a repossession. Apparently that makes the "HPCer" unfairly 'win' (after 10 years+ renting and enduring sick hpi forever stories).

ffs Venger pls stop misrepresenting what I say

My reference to 'unfair' was in the context that you want to see people buying now get burned, so you can enter the market - and I was making the point that whether you lose your shirt or not is all about timing - and that you entering the market after a correction could still lead you to get burned if the market drops again or IR go sky-high - and how would you feel in that situation?

I'm not some shill for high prices as you keep characterising - I feel strongly that buying a house for your family should not be a game of roulette.

I also feel quite sad that new entrants, who have probably saved for years, will lose their shirts in any correction. This is not a society I want to live in.

You have a lot of anger at the current prices in the market. Aiming that anger at people who have finally capitulated and bought is wrong. These are not the people that caused the problem. Many old HPCers are not here any more as they bought because they could no longer live in temporary rentals with all the problems that come with that.

You can't say that people buying with the facts as they are today deserve to lose everything, but that you have not bought in last 10 years because facts were not favourable - a period where some homes have gone up 3X in value.

Regular folk should not have to gamble. Most smart well informed people (including most EAs) would never have predicted what has happened in the last 3 years with property - you didn't buy 3 or even 10 years ago - so I don't understand the view that regular people should get what is coming because they timed it slightly wrong.

Everything about that situation is bad.

Link to post
Share on other sites

Amazing. Nationwide freely admits that it is lending into a housing bubble in London.

When Northern Rock went bust and several small Building Societies had to be taken over, the Nationwide bosses seemed to be complaining. They hadn't done as much reckless lending but were having to pay what they thought was too large a share of the compensation. Applegarth, Goodwin, etc did OK, so as a boss what's not to like about doing more bonus creating lending and walking away with the swag before it all goes pear shaped?

http://www.theguardian.com/business/2009/mar/20/nationwide-compensation-anger

Link to post
Share on other sites

There is only a bubble in London and the South East - in most other areas prices are still below 2007 prices, seven years on.

The likelyhood therefore is that any dramatic falls will be limited to London/SE.

I do wish people would not keep repeating this, Its very vague and very untrue in a lot of places.

I am seeing houses come onto the market that were selling for 145-150k 2006-2007 for offers over 165k+.

They may only be asking prices but there are a lot of people that just accept that 'that must be what they are worth', If I had a pound every time someone told me that I'd be a few hundred quid better off.

Link to post
Share on other sites

There is only a bubble in London and the South East - in most other areas prices are still below 2007 prices, seven years on.

The likelyhood therefore is that any dramatic falls will be limited to London/SE.

Ah it's the 2007 market norm position.

Also more of the non-bubble outside London South East.

South Manchester... Heaton Moor, Didsbury, Bramhall, Poyton, - parts of Cheshire people would like to live; Wilmslow (+big big list), Aberdeen... 'no bubble'.

Let's all go out and buy £300K- 400K non-bubble semis, what little in on the market, outside London and SE.

Phil/Cameron/Danny Alex/Nick Clegg... funny how owners in their own areas all know what house prices are worth and should be.

Link to post
Share on other sites

I'm not some shill for high prices as you keep characterising - I feel strongly that buying a house for your family should not be a game of roulette.

I also feel quite sad that new entrants, who have probably saved for years, will lose their shirts in any correction. This is not a society I want to live in.

You have a lot of anger at the current prices in the market. Aiming that anger at people who have finally capitulated and bought is wrong. These are not the people that caused the problem. Many old HPCers are not here any more as they bought because they could no longer live in temporary rentals with all the problems that come with that.

You can't say that people buying with the facts as they are today deserve to lose everything, but that you have not bought in last 10 years because facts were not favourable - a period where some homes have gone up 3X in value.

Regular folk should not have to gamble. Most smart well informed people (including most EAs) would never have predicted what has happened in the last 3 years with property - you didn't buy 3 or even 10 years ago - so I don't understand the view that regular people should get what is coming because they timed it slightly wrong.

Everything about that situation is bad.

There are market participants who want houses, and some refuse to pay anything near the price sellers want, and some happily offer more than asking price.

Regular folk? Don't like the prices, don't buy. Buyer's strike is my position. And your victims often carrying on seeing more HPI, with that London HPCer counting his 30% gain from buying 2 years ago.

I can't discuss things with you. You live in a world of rainbows and unicorns, imo. Protect positions for those with extreme debt, and you protect values for outright owners, BTL, second home owners.. all the way up the market.

Link to post
Share on other sites

Can anyone remember if the press openly talked about bubbles and corrections prior to 07/08, or did it all come "out of the blue"?

I remember there being a lot of discussion that this time it is different due to dual-incomes, IO and self-cert etc.

As I remember it playing out (we were renting a house that was for sale) in 08 - houses had priced themselves outside of affordability before credit became a problem. There was already a lot of stuff not moving.

Even when the credit disappeared most properties didn't come down in price - I know some still for sale at those prices - some others have come back on this year.

It was the newly listed that were at lower prices - but in very low volumes - an EA said to me mostly divorce/inheritance related. I'm seeing same thing now - some newly listed are coming on 10-20% lower than they would have been last year (but not all) - very little is completing.

Which is why I think most likely scenario is that we'll see another sustained 'top' for a while now - or averages move down 10% on low volumes for a while - until some other external event forces a panic.

Another scenario is that the high-end corrects sharply - but BOE relax credit further for the sub-250 regional markets - just to keep transactions moving.

Either way - there is a long history of any market intervention having unintended consequences.

However, I also think there is some ponzi at work in London where investment companies are buying these properties and using the next higher purchase to revalue the whole portfolio up whilst taking the 'profit' out today somehow now - which could either amplify a correction or hold-off a correction until some margin call or similar causes these to have to raise cash - I sense a lot hinges on how this part of where we are now plays out.

Link to post
Share on other sites

Proof that Nationwide "went the other way"....

Building societies have touted themselves as models of restraint. But the £2.3million award handed to chief executive Graham Beale proved the last straw for around 76,000 members.

Nationwide posted a healthy 56 per cent boost in annual profits to £475million last year.

But – along with Barclays – it has fallen short of tough new requirements on how much capital banks and building societies have to hold to cover losses on bad loans.

It was found to be £400million shy of the amount required by the Bank of England’s financial safety watchdog the Prudential Regulation Authority

Five executive directors received a total of £7.9million in the year until April – up 16 per cent on the previous year. http://www.thisismoney.co.uk/money/saving/article-2377076/Nationwide-members-revolt-bumper-pay-awarded-directors.html


I

Link to post
Share on other sites

I also feel quite sad that new entrants, who have probably saved for years, will lose their shirts in any correction. This is not a society I want to live in.

I'm willing to extend as much sympathy for recent buyers as they were to me all the while they were mindlessly bidding up prices i.e. f*ck all.

Edited by goldbug9999
Link to post
Share on other sites

I do wish people would not keep repeating this, Its very vague and very untrue in a lot of places.

I am seeing houses come onto the market that were selling for 145-150k 2006-2007 for offers over 165k+.

They may only be asking prices but there are a lot of people that just accept that 'that must be what they are worth', If I had a pound every time someone told me that I'd be a few hundred quid better off.

It really depends on where you live. I think a lot of the confusion with seeing peak asking prices is that it may not be the same house, ie. tarted up and flipped. Certainly in the areas that I watch....Derbyshire, Lincolnshire and Nottinghmshire a house in the same condition wouldn't have a cat in hell's chance of achieving 2007 prices, 90% and you would be lucky.

Look I own property and double that in cash. The cash has yielded over 100k since 2007, I can categorically state that property has yielded zilch in capital gains but has been a bloody money pit...some boom more like an STR wet dream scenario for East Midlanders 2007-2014. Phil S is dead right.

Property has been a complete pig.

Don't know why anyone who is completely out of property in the north would want to talk their dream position down of the last 7 years. London a completely different story.

Edited by crashmonitor
Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.

  • 434 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.