Monday, October 20, 2008

Largest ever annual fall recorded in asking prices

October House Price Index

"Housing market unlikely to ever be the same again"

Posted by doomwatch @ 11:03 AM (911 views)
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5 thoughts on “Largest ever annual fall recorded in asking prices

  • It will be
    interesting to see how these banks deliver on the commitment given to Government that
    they will seek to deliver a broad, deep mortgage market with a good spread of products
    that enables credit-worthy borrowers to access mortgage finance. Rule-of-thumb salary
    multiples established in the high-inflation and high interest rate environment of the 1970s
    and 1980s are looking increasingly inappropriate as base rates fall back from a peak of only
    5.5%. We expect lenders to increase their use of broader measures of mortgage affordability, though their lending will remain restricted compared to pre-credit crunch times
    by tighter controls on leveraging debt.
    The aforementioned shifts affect all sectors of the housing market and may have longerterm
    consequences, namely:
    · First-Time Buyers having to save more for the larger deposits now required, thus
    more likely to be older or the beneficiaries of help from their parents;
    · Amateur buy-to-let investors becoming hindered by tightening criteria on mortgages,
    thus significantly restricting the growth of the private rented sector. This potentially
    exposes opportunities for larger institutional landlords.
    · Low volumes of new homes as the industry will take years to recover from banks’
    wariness to lend on speculative developments, exacerbated by the loss of skills that
    the new homes developers have already suffered.
    It is worth noting that there will not be a direct correlation between lower prices and buyer
    affordability due to the significant tightening of lending criteria.
    Shipside predicts: “For those who have been active in the housing market in the last 20
    years, or were now hoping to get on the housing ladder following recent price falls, the rules
    have changed for good. When we look back on these turbulent times, I suspect we will not
    only realise that we came closer to the brink than most imagine, but we will also clearly
    recognise it as the end of the long period of growth in owner occupation.”

    Interesting to read Miles Shipsides take on things. He’s doing his best to talk things down. He knows his customers (the estate agents) need to price things lower to stay in business.

    I wonder if half of us will end up renting from Tescos ?

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  • Quite a candid commentary from someone in the business. He thinks the rise in asking prices is unrealistic. Come the new year, I think we will start to see some bigger downward movement.

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  • voiceofreason says:

    This report needs some sales volume figures to validate it’s claims.

    The market is so thin that the rises / falls are probably statistically insignificant.

    No one can sell unless they are repossessed and a cash buyer goes in at a decent rental yield, which means a 40% (and rising) discount from peak.

    Fantastic !!

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  • Forget about the numbers for a sec. It says “new sellers asking an unrealistic 1% more than last month”. This comment is significant, as it comes from one of the bulliest online property company. For Rightmove to use such a strong word against its own customers, it must be really pissed off

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  • “Quite a candid commentary from someone in the business. He thinks the rise in asking prices is unrealistic. Come the new year, I think we will start to see some bigger downward movement.”

    yeah – I thought it was a hoax

    In fact I still think it’s a hoax?

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