What's the latest, are we almost certain to see a real drop in the value of homes in the UK? We are thinking of upping to a bigger house and would prefer to do it in a slump.
It Means prices are almost down to where they were last year.
Its an important psycological milestone, as most of the vested interests use Year-on-year as their judged reporting period, for example The Express, who report month on month price falls by saying "prices are up X percent".
Year on year yes, but if prices have been falling for 6 straight months I think you know where the market is heading. Once this barrier is crossed the game is up. Once 12% from peak is crossed, according to the IMF, we are in crash territory.
The "Bail-out" of the Banks will be largely ineffective thanks to the fantastic work of Mervyn King, ensuring the public purse was not put at risk by buying excessively risky CDOs/Mortgage debt, and ensuring any price falls are protected in the "Small Print"
Personally, I am expecting 30% falls on average, so some properties such as flats I reckon will lose 50% and upwards, Decent detatched or decent in nice area you can expect to lose far less, perhaps 15-20%, as many of these properties have not been affected as badly by the housing boom (IE not appreciated as much and are more typical of 3.5X earnings), and are generally better financed, thus are less susceptible to housing price falls. So if you are hoping to pick up a grade 1 listed cottage/Georgian/edwardian palace for a snap you may be disappointed IMO. Affordable habitable housing and 3.5X income Here we come.
Best advice, save like a man posessed and get the biggest deposit you can. Once this unwinds, you may need a 25% deposit just to get a mortgage.
Originally posted by Bamford: That was 6 years ago, i will add.
But i'd like a better house, if prices do drop.
Bamford, didn't you say in another thread that you bought a house in 1973 for £995? That would make you a homebuyer at 16 if you are 51 now. Did they start young back then?
Originally posted by Bamford: That was 6 years ago, i will add.
But i'd like a better house, if prices do drop.
Bamford, didn't you say in another thread that you bought a house in 1973 for £995? That would make you a homebuyer at 16 if you are 51 now. Did they start young back then?
The era of the amateur landlord has all but ended, with banks effectively refusing to lend to new entrants to the buy-to-let market.
Katie Tucker, of the broker John Charcol, said: “After another week of turmoil in mortgage markets, novice landlords now face huge difficulties securing a loan, and thousands of existing landlords coming to the end of fixed-rate deals will find it very hard and very expensive to switch mortgage providers if they have not built up at least 75 per cent equity in their buy-to-let property.”
Halifax is expected to raise fees by £1,000 and some rates by as much as 0.6 per cent, meaning an increase of £75 a month on a £150,000 interest-only loan. The bank increased the rates on some of its tracker deals by similar margins last week, and increased the rates on mortgage deals for those with small deposits by up to 0.35 per cent on April 7.
KAboom. Thats the UK housing market done for. The 18% CGT and the lack of cashflow that this will cause is going to make this far far worse than the 30% falls I was originally predicting, especially at the lower end of the market. Looking into my crystal ball, there are going to be lots of angry punters wondering why they ever listened to that trash on Daytime tv about becoming a wideboy landlord with a 100 flats with only 5 grand down. Leverage works both ways remember, and its far easier to turn cash into property than to turn property into cash, especially in today's climate.
Those who have bought into the "executive city lifestyle appartment" dream are facing a bleak future.
- They will be coming off their teaser fixed rates. - They will be reverting to SVR deals with their providers - Their rental uplift guarantees will be ending. - Their monthly rent v mortgage shortfall will be hurting.
It's a case of bail out now or stick with monthly losses for many years, yet their equity is likely to be at best zero if not negative making sale a tough thing to swallow.
As pointed out elsewhere, there are high street bank(s) offering rate-matcher mortgages for minimal fees, with up to 95% LTV (with LTV rate being irrelevant for existing customers).
We are thinking of upping to a bigger house and would prefer to do it in a slump
As are millions of other people in the same situation - ie happy to take a 15% hit in their own home to take advantage of a 15% hit in the next house up. However, because so many people are looking to do that the prices would rise back up again immediately.
Originally posted by malkie: As are millions of other people in the same situation - ie happy to take a 15% hit in their own home to take advantage of a 15% hit in the next house up. However, because so many people are looking to do that the prices would rise back up again immediately.
That may be true in theory but think in practice there are not many buyers at the moment.
They are probably waiting for prices to drop considerably.
As pointed out elsewhere, there are high street bank(s) offering rate-matcher mortgages for minimal fees, with up to 95% LTV (with LTV rate being irrelevant for existing customers).
As are millions of other people in the same situation - ie happy to take a 15% hit in their own home to take advantage of a 15% hit in the next house up. However, because so many people are looking to do that the prices would rise back up again immediately.
Points. You cant get a residential mortgage for a BTL property; its the BTL sector mortage rates and LTVs that are changing. It generally breaches your mortgage t&c's to purchase a property with a residential mortgage with the intention of using it as a BTL.
Many BTL mortgages specify terms such that any capital depreciation below the level of the mortgage HAS to be paid in full as an additional bill; hence why highly leveraged individuals are going to come a cropper pretty damned quickly.
Your point about many waiting for the hit to happen, well, I believe we have a VERY nasty recession, possible depression on the way, with over 20% of UK GDP in the finance sector, and another large chunk in the Retail sector. There is no cash to help out companies and reduce taxes. It isnt going to be nice. If you look at the stats since records began, house price slumps are a leading, not lagging indicator of recessions, this is exactly the reason why Governments will do everything in there power to stop a house price slump. What is concerning is that the size of the recession is typically directly proportional to the size of the previous boom... And we all know how rediculous this boom has been, with far greater lending than the last (Lawson) boom and by far more public debt to boot. This is why, I personally am ignoring what the government are saying and saving every last penny I can at the mo; I give it 8-12 months before we enter recession.
Originally posted by Pflusk: Your point about many waiting for the hit to happen, well, I believe we have a VERY nasty recession, possible depression on the way, with over 20% of UK GDP in the finance sector, and another large chunk in the Retail sector. There is no cash to help out companies and reduce taxes. It isnt going to be nice.
A few of us have been predicting this for too long......just like chicken little no one is listening anymore......trouble is now they really should!
there will be in my house if I keep listening to you lot.
Talks of a crash nark me. What about all the FTB's like myself who stopped moaning long enough to go *sensibly* buy a house? No-one dropped the prices 30% for us! Now all of a sudden ( when it could've been nipped in the bud years ago at benefit to us all) we have to all drop the prices for all the people who can't buy. Nevermind that some of us managed. Nevermind that there's houses there if you compromise and atually save your money. If you don't compromise you're being picky and you don't want a house of your own enough.
We saw no end to the rising prices, we had a baby on the way and a little-bit-woo-little-bit-way landlord. So we pulled our fingers and bought. We didn't however take leave of our senses and use a 120% mortgage. Now because some poor little upstarts can't have their holiday, their new TV and a house in their chosen area, we need a crash.
The banks should shoulder any big loss caused by 120% mortgages etc. because if they are stupid enough to lend that, that's their fault. The people stupid enough to go plastic greedy should be forced to deal in cash. House prices should not be allowed to crash because it's not fair that perfectly sensible reasonable people like myself can't offload my house for a pittance to get my son to a better school (this is presumed - I haven't tried yet.) There's nothing unfair about having to rent if you can't buy. No-one gives me a mansion as I find it unfair that I don't live in one. I don't drive a ferrari as I can't afford one (and I like to be high up and I'm not keen on red cars, and you'd have to have red) anyway I don't go crying about it and demanding that car prices are slashed so I can buy one. If I wanted one I'd have to work out how to pay for it.
HC, if you think in terms of whats best for your children, a 30% fall in prices would be absolutely the best thing for them. Why should they live in some sink estate just to be able to own a house if they are on a good wage? Surely if they have worked hard all their lives, they save (as you say) the house that they could have bought at 3.5X earnings back before prices got rediculous have to struggle at 5X earnings for no other reason to placeate the current purple-rinse brigade, who see FTBs as a way of paying for their Stanna Stairlift and their retirement pad in Spain.
HC, dont be angry at the FTBs, ITS NOT THIER FAULT!!! Prices arent coming down because they "want" them to, they are crashing because the complete ineptitude of the government to oversee the regulation of the mortgage market, as for 10 years, rampant HPI suited them fine. Blam the government, blame the banks, blame the greedy individuals that bought tens of properties and didnt even use them as rentals, just to make money on capital appreciation. It make me sick to the stomach, it really does, but you also have to say, recent buyers chose to buy, that was a risk they took, one that I cetrtainly did not want to. Except now the shoe is on the other foot, the anger I used to feel at seeing prices climb to rediculous levels year after year is over and it FINALLY looks as if we have the conditions to bring the UK housing market back to normality are in place.
Its going to be painful, unfortunately, it was inevitabe from the day Labour entered office. Remember that next time you ever vote for Labour, remember they promised "No more boom and bust".
BTW HC, much of the anger you feel now was felt by many priced out individuals who, through no fault of their own, saw the price of a reasonable home outclimb their deposit month after month.
Many of whom (myself included) didnt get any of that consumerist tat, could get a "sports car" on credit, but still despite being in a far better position than my parents when they got married, couldnt even afford the home that they moved into when I was their age.
How many times did you hear phrases like "you have missed the boat" or "they dont build land anymore" or "rent is dead money" spouted by idiot homeowners for no other reason than to upset people who couldnt afford a home?
People only ever say that when provoked by those who refuse to committ to home-ownership as they are "waiting" for a crash so they can cash in.
I've never seen anyone on these boards, or in RL say "haha, missed the boat", to someone on minimum wage in an area they can't afford to buy.
A few of us have been predicting this for too long......just like chicken little no one is listening anymore
The thing about "predictions", is that you can claim its "coming soon". It's a nonsense arguement because you can keep saying it year after year unchallenged, because you say its coming "soon". So when exactly? Give us an reasonable time frame (ie 4Q08) and a +/-10% drop figure. Then, if that situation doesn't occur, you'll need to stand up and confess you were wrong.
And I am not waiting for a crash to "Cash in". I am waiting for a crash, at the risk of prices climbing, to ensure MY family have the same opportunities as my parents did, and you did too malkie. 3.5X earnings. Higher Interest rates
.... car forum possibly? 
Times frontpage)
when it could've been nipped in the bud years ago at benefit to us all) we have to all drop the prices for all the people who can't buy. Nevermind that some of us managed. Nevermind that there's houses there if you compromise and atually save your money. 
that's my steam blown off.