Thursday, August 27, 2009

Grim Reading

August House Price Survey

Even though I know it's just a 'spring bounce', it does seem to be dragging on far too long ...

Posted by mark wadsworth @ 07:23 AM (2693 views)
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11 thoughts on “Grim Reading

  • charlie brooker says:

    And yet the FTSE opens down.

    Keep a Beady Eye out and watch the BDI. Fools and their money are easily parted.

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  • “Before the MPC began cutting rates, the average interest and principal payment per mortgage holder represented about 38% of the average
    post-tax labour income. Following the steep cuts in base rate, this has fallen to just 28% of post-tax income,
    despite historically high levels of outstanding mortgage debt.
    The fall in debt servicing costs has meant that fewer homeowners are under immediate financial pressure to sell than might have been expected in a recessionary economic background with rising unemployment”.

    So basically another bubble as been created which will hold up house prices until such time as interest rates increase…..after the next General Election…..How convienient!!

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  • I know a number of people moving house through job changes. They (and the people in the chains) have dropped prices a bit to get the deals through. I was expecting a small drop in H P this month; a large number of sellers seem to be chasing buyers with a useful deposit. Maybe my bit of Essex is doing worse than the rest of the UK?

    Lots of my friends have realised the depths of their indebtedness and are using low interest rates to pay off their principal more quickly.

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  • Wow, house price rise!! I am in the money now big time since i purchased 2 auctoin properties 4 months ago.

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  • krustyatemyhamster says:

    @alan
    It’s more difficult to pay down the principal on high loan to income ratios though, for the simple reason that the principal’s bigger. By overpaying a high interest loan (with a x% of monthly salary minimum payment) it will take less time to pay off and you will save more money than overpaying a smaller interest loan on a higher loan to income ratio (which equates to the same x% of monthly salary minimum payment). I’d rather take the lower value loan at higher interest – it’s easier to pay down with overpayments and the risk of an increase in interest rates is less. So the incentive to pay down debts is reduced with low interest rates, but as you point out anyone with any sense is paying down as much as they can at the moment because of the fear of future increases. However their ability to pay it down is diminished because of high loan to income values and the fact that the average income is falling with increasing unemployment. Besides, what percentage of the population with mortgages have the sense to pay down anyway? – there’s still a consensus out there that house prices will continue rising, so I suspect a lot of people still in employment with trackers are spending like there’s no tomorrow.

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  • spring bounce in August, summer bounce in December! Yeah right, it’s been 2 years since Northern Rock, and it’s debateble if house prices have actually gone down at all in (South). Fair play to you Mark as you are honest enough to note it’s ‘grim reading’ but the ‘vested interests’ on here carping on about it’s going to plan. If only some of you could hear yourself!

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  • I’ve been posting for a while that sales in South Hampshire have been through the roof.

    What I have noticed in the last month is Estate Agents have put the next ‘batch’ of houses on at an increased rate and very few are now selling.

    It’s still summer holidays, but if I was serious about buying a house I would buy during this period.

    I guess we’ll see what the next month brings but IMO people aren’t daft enough to pay 2007 prices in this climate – or are they ?

    The liklihood of houses selling in the Autumn (providing further unexpected shocks don’t hit the economy) is ok, but providing they’re 15-20% off 2007 prices.

    We could well see a stalemate again, which will force Estate Agents to push prices back down to get sales.

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  • “46. techieman said…
    Another indicator is a Sentiment index. I am a bit concerned that we have not had many Bulls on this site. I would like to see some join the fray, then my confidence would return that the falls continue……

    Tuesday, June 30, 2009 12:34PM ”

    Its obviously not time to buy yet :

    “we need such people to drive the market lower in the second phase and to give momentum. Markets always have bulls, when the last bull becomes a bear then its about time to buy the market!

    Friday, June 20, 2008 06:12PM ”

    Smiling, Jayk, Kp – Welcome back chaps! Bring a few mates

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  • wow, techie – this really is going to plan!! Happy to help mate. (FWIW, I’m not necessarily a bull)

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  • PS……

    Soon, if the crash is portponed long enough, you will be able to buy 2 or even 3 similar sized homes, in similar type areas in France for the cost of one here!

    I’m sorry but this madness will end in the biggest disastor this country has seen since Wilson was forced to devalue the pound because we couldn’t sell a single thing abroad because of the overvalued currency. Only this time we have a falling currency and can’t take any advantage from it (on any real scale) because we are a net importer.

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  • I have a hunch that this week will mark the peak of the bounce and August the last of the price rises. I think that the stock market has turned and it is downhill from here. Of course I have nothing really to back this up, just a feeling.

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