Tuesday, August 31, 2010

Be afraid, very afraid

Fresh fears of housing market 'double dip' as mortgage lending crashes to new low

Net lending second lowest figure ever recorded Prices could fall 3% during the second half of this year House prices to drop around 5 per cent next year Confirmation housing market is heading for 'double dip'

Posted by mark @ 01:29 PM (1891 views)
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10 thoughts on “Be afraid, very afraid

  • I have no idea how prices increased after the initial crash. It’s time to put seat backs in the upright position, fold back the table, fasten you seatbelts and getting ready for a landing to reality.

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  • Is that my cosy rocking chair creaking or have termites moved in?

    I think you need to look out of the window Sid!

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  • What initial crash? Did I miss something?

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  • @Ant,

    Listen to this (it was so good it was worth posting again), go about 1min50sec in.

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  • Ant,

    A large part of the rebound was down to home movers buying a new place without selling their old one. Many people believed that the dip in the market was only temporary, and that normality would return once the banks had got their ducks in a row. It therefore seemed logical to take advantage of lower prices to buy a new home, while hanging on to the old one.

    This attitude starved the market of stock, causing prices to rebound.

    Those people are now selling their old homes, so flooding the market, while market confidence looks decidedly on the wane.

    Meanwhile vast numbers of young people are totally priced out of entering the market, and are now draining the rental sector of stock.

    As rents rise so more will share, or stay with their parents; and overall market demand will contract. As the BTL brigade always looked at capital growth prospects (which even the optimists agree have more or less gone) rather than the rental income prospects; there is little likelihood of that sector expanding.

    So it does now look as though the chickens will finally come to roost, and the horrid reality will be recognised:

    – The baby boomers kids can’t afford to buy the baby boomer’s homes. Period.

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  • @ estrader post 3 – This was music to my ears! At last someone talking sense!

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  • uncle tom

    That was very informative thank you!

    As a first time buyer i’m starting to feel there is hope.

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  • mark wadsworth says:

    Glorious! If even The Mail & The Telegraph are running stories like this.

    Re what Uncle Tom says, it wasn’t just this “supply demand ” nonsense, it was largely because of endless desperate attempts by the government to prop up house prices – freezing council tax, reducing number of new builds, throwing money at banks to get them to lend, preventing banks from repossessing, subsidising mortgages via welfare system, cutting CGT to 18%, etc etc.

    “The baby boomers kids can’t afford to buy the baby boomer’s homes. Period.” Spot on. Sooner or later Home-Owner-Ism has to come back and bite the incumbents on the ar5e.

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  • greenshootsandleaves says:

    And a mention (in the comments section) for the ‘obsessive house-price-crash website provocateurs’.

    Technically, that’s a breach of the DM’s policy on the use of the C word (crash), I’d say.

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