Saturday, January 29, 2011

Average houses are slightly too expensive!

Housing shows few signs of gaining momentum - Poll

House prices could gain 1.7 percent in 2012, but analyst forecasts again betrayed a strong sense of uncertainty, ranging from a 10 percent drop to a 5 percent gain. On a scale where 1 is extremely undervalued and 10 is extremely overvalued the economists gave UK house prices a median 6. The average house price in December stood at 162,763 pounds, according to Nationwide Building Society -- a level economists still feel is slightly expensive in relation to Britain's poor economic fundamentals.

Posted by miken @ 05:04 PM (2271 views)
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7 thoughts on “Average houses are slightly too expensive!

  • Yeah, and avg bwanker is slightly too crooked!

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  • Yes house prices are too high – but what can be done about it with a high percentage of owners in negative ( or close to ) equity – how can they sell for less and hope to trade up with no or very little deposit – answer is they can’t – so what can they do – sell at less than they owe and move into rented accommodation – ain’t going to happen – the lenders could help by offering to reduce their outstanding loan by 20% to 25% – after all most of these lenders have been bailed out with our money and as DC says ” we are all in this together “

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  • greenshootsandleaves says:

    Given that the properties that are selling on what is a very thin market are, by and large, anything but ‘average’, are bought by people who cannot be described as ‘average’ (unless ‘average’ is now defined as the ability to tip a wheelbarrow of cash onto the bargaining table or demonstrate to the lender that one could, at a push, finance the deal unaided), are these constant references to the price of an average house:

    (a) meaningful?
    (b) fodder for the delusional?
    (c) laughable?

    Answers on a postcard, please.

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  • greenshootsandleaves, I agree that it’s probably not average wage people who are driving up average prices. The problem is there are so few sales that it doesn’t take many cash rich buyers to push up average house prices. There does come a point when sales are so few that average prices should be ignored. I see many overpriced properties on rgihtmove and I begin to think many of these houses are owned by speculators who don’t need to sell quickly. What kinds of people can wait for years to sell a 1/4 million pound house? These people probably do think/hope that their house is eventually bought by someone who is also cash rich who further wants to speculate. Once you run out of speculators then the top end of the market is destroyed. You suddenly find 300k houses now cost 250k, then 250k houses cost 200k, etc. This is what I am waiting to see.

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  • prices probably are too high but with thousands in negative equity – the ones who bought when the market was at a peak with 100% mortgages and others who kept financing to fund a lavish lifestyle – even the BTL brigade who took 85% mortgages – it’s impossible for these people to sell at reduced price and trade up – the lenders could help by reducing their redemptions by 25% ( golden good buys ) that would get the market moving again – force the nationalised lenders to lend up to 95% for FTB – let’s just bail everyone out

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  • @miken… Do you think the market will ever run out of speculators, or cash-rich buyers, considering the £billions paid in banker bonus’s and the like?

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  • @4, well when you consider the amount of money required to support the market then I do think there is not enough spare money out there to continually support the 6.8bn a month (81bn a year) house purchase market. I’m also not convinced rich bankers/speculators are going to continue to invest in property, especially now housing market sentiment is changing.

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