Wednesday, January 7, 2009

The worst year ever for house prices

The worst year ever for house prices

Mostly a summation of what we already know for last year.

Posted by becky @ 12:06 PM (1533 views)
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17 thoughts on “The worst year ever for house prices

  • Bovis last night refused to say how much each property was sold for. So £18m / 379 houses is ….. £47493/house (on average) !

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  • If this is correct then the council is paying approximately 47K for each property (180000000/379). Wonder what the ‘market rate” is for these properties for the general public? Bet it’s nowhere close to this price. Still, can’t shake the feeling that the councils are getting stiffed.

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  • The developer sold 379 homes in the South-west, West Midlands, East Midlands and East of England in an £18m deal with the Government to provide affordable housing for poor families on waiting lists.

    That’s an average of £47493.40, not a bad price even if they’re 1 bed flats.

    I want to know why these weren’t offered to the market first, maybe some of these ‘not so well off families’ could have afforded to buy these at these prices themselves instead of the tax payer supporting them.

    Further they talk in the article of the 15 or 16% falls in the 90’s crash.

    Is it just me – I lived just South of Winchester at the time in a good area and can tell you it was at least 30% then. Currently in Marlow Bucks (another good area) speaking to people here it was at least 30% here aswell in the 90’s.

    Neither of these places IMO are showing much more than a 10% fall from Peak ’07 + 10% prices at present.

    Firstly how can the Nationwide figures for the 90’s be so wrong and is this an indication based on these 2 good areas of how much worse it’s going to get.

    I personally can’t see how they will escape with anything less than a 30% correction this time around.

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  • meant “councils are”, and have just realised my mistake that it is the government (I mean the taxpayer) who is providing the 18 mil, and local councils are adding to this. I can’t imagine the councils (I mean the taxpayer) will want to put much more than 10K into each, so possibly 57K each property. IMHO.

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  • I can’t quite believe the government has started buying up unsold homes en masse to try to keep house prices high. Put another way, what would have happened to these houses had the government not bought them? Answer – The housebuilders would have had to sell them at whatever rates they can get (severely depressed).

    Just shows how inept, short sighted, self centred and morally corrupt Brown’s government really is.

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  • There’s something quite twisted about being a priced out tax paying saver watching the government snap up cheap houses with public money.

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  • Well as the tax payer now owns most of the banks a good part of the housing stock in this country has already become in effect a council house and the mortgage holder a council tennant.

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  • mark wadsworth says:

    Another thought has just occurred to me.

    We know that household borrowing increased by about £700 billion (i.e. doubled) over the last ten years and that most of this went into inflating house prices.

    Just imagine we’d used this money to build nice new homes costing £70,000 each (including mains, drainage roads and stuff). That would be an extra ten million homes (or fewer homes and more factories, schools, offices, whatever), we would all be living like kings. Or princes at least.

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  • It’s probably not that bad an idea for the government to buy up cheap new build homes, particularly ‘spacious 1 and 2 bed apartments in sought after areas’. As far as I can tell:

    1) No chain is started, so there is no effect on the market past new builds.
    2) These houses will be used to replenish the previously sold stock and house those who have had their home repossessed, etc. The more desirable repossessed 2-5 bed houses are then available at a marked down price through agents and auctions.
    3) Since the government are likely to be paying a derisory price, there is still motivation for the builders to sell privately and plenty of room to drop the prices.
    4) 379 houses is a pathetic number. It will make no difference to house prices in a country that has many millions of houses and flats.
    5) It supports builders to enable them to start new homes or complete the building of existing homes.

    Effectively, if done on a large enough scale it reverses some of the damage since thatchers right to buy epiphany. It provides social housing for those who cannot afford to buy (whether you agree that this should be made available is a different argument) and rather beneficially for potential buyers makes ex-council houses available for purchase and undesirable new build flats are left for those who have little other choice.

    I had previously predicted that the thousands of ‘spacious 1 and 2 bed apartments’ would be the council blocks of tomorrow. I hadn’t actually imagined they’d be publicly owned. It seems this is now likely to be the case.

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  • I believe all our problems (housing market wise) started when Mrs T sold off the council houses for a fraction of their value. I also believe that a good supply of affordable rented housing is the only thing that will stop future booms. In other European countries this is ensured by rent controls. The fact that renting is a viable long-term option dampens down the housing market.

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  • inflation is eating my savings says:

    >Just imagine we’d used this money to build nice new homes costing £70,000 each (including mains, drainage roads and stuff). That would be an extra ten million homes (or fewer homes and more factories, schools, offices, whatever), we would all be living like kings. Or princes at least.

    That would be boring. And it would get rid of the class system. Unthinkable.

    Looks like the government’s plan to get BTL and developers to subsidise public housing is bearing fruit. 47k isn’t bad even in these anxious times.

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  • gone-to-colombia says:

    Luckyjim, Totally agree with you.

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  • 9. luckyjim said…

    I have a great housing plan. As with everything it is the people that manage good plans that mess things up.

    M. Thatcher. A case in point!

    My plan, I would not dare divulge!!!!!!!!!!

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  • If a house does not have a high value :- You cannot borrow much against it…….You cannot pay a high level of local taxes…….You cannot accept extortionately high utility bills in relation to its value…….You will not need to demand high wages……..In fact everything will be priced within reason except true kuxuries –even your thinking will be reasonable……..Need I say more?

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  • “luxuries” — that is – Whoops!

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  • Missingteddybear says:

    One would assume that those who are given this social housing can exercise their ‘Right to Buy’ that is available to all council tenants. The problem is the way social housing is allocated. <400 homes is so few, they will only go to those high on the list, that is those with multiple social problems who would never be able to exercise the right to buy. The councils should give the properties exclusively to working families (not benefit dependant families) to prevent the areas deteriorating into slumdom and when prices are down further and banks lend in a few years time, the tenants can buy their house.

    I have nothing against selling social housing - the problem lies partly in not building replacements. Thatcher's policy had the effect of giving an immediate transfer of wealth to an aspiring working class and leaving behind a non-working underclass. Social housing is not going to the people it was originally intended for - the deserving poor.

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  • Letsgetreadytotumble says:

    “Is it just me – I lived just South of Winchester at the time in a good area and can tell you it was at least 30% then. Currently in Marlow Bucks (another good area) speaking to people here it was at least 30% here as well in the 90’s.”

    It was 33% in the Gloucester area. We put our 125k house on the market for 82k, and it still did not sell. A standard 4 bed estate house, 5 years old, so nothing weird.

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