The House Price Crash Thread

[BillyShears]

You see I made the mistake of buying a house to live in rather than an investment - silly me.

Its still worth more than I paid for it 4 years ago but since Im not planning on moving anytime soon it doesnt really matter - the people who buy to let might have their finger s burnt though

Me too. I was foolhardy enough to raise a family in mine too!

[Gringo]

You see I made the mistake of buying a house to live in rather than an investment - silly me.

Its still worth more than I paid for it 4 years ago but since Im not planning on moving anytime soon it doesnt really matter - the people who buy to let might have their finger s burnt though

Indeed the majority of people do - that doesn't help the 200,000 people who bought since the start of 2007 who are now in or close to negative equity and now longer have the freediom to choose whether they move anytime soon

Well said that man

And some people who may have started of simply as home owners may have been sucked into the market by the cheap prices on offer in the downturn

Hmmm interesting Gringo - they have a new housing development going up near here and have something I would be interested in - time for a bit of wheeling and dealing

[drat01]

See Gringo if you knew the full facts your little point scoring attempt would look very very silly, maybe you don't help out with your kids etc,

[Gringo]

No need to point score on this thread. Just like at the house prices and who called it right and who didn't. But seeing as you insist on playing victor mature - yah boo sucks.

[drat01]

Playing Victor Mature - Hmmm never really cared for him as an actor

And as you say no need to point score, but you still tried to do it - maybe that says a lot about the character of the person, eh?

[Gringo]

You crack me up.

[drat01]

remind me not to buy a house from you then - obviously shoddy builders

[leviramsey]

Are we scoring on a ten-point must system?

[mykeyb]

Well the thing is if you went out and bought at your absolute limit you are taking a gamble that for the next 5 - 10 years the economy is going to trundle along and as we all know the global economy is up shit creak meaning that some people are buggered by their own doing. When we bought our last house after living in Cradley for 14 years we bought at nowhere near the maximum mortgage available, infact we didnt even go half way simply because when we bought our first house the crash happened and it took 10 years for the house to reach the value we bought at (the next 4 years saw the value double).

There was a girl who used to work in our studio who banged on about how much her house had gone up in value and of course she then went out and borrowed the difference because in her words it was almost free money. 3 months ago she was made redundant and now her house is worth around what she paid for it but now she has a nice big loan attached and the bank are getting very worried that they will be stung big time.

[Gringo]

Crosby inStills the need for Cash

Housing crisis to continue until 2011, Crosby warns

Sir James Crosby has no easy answers to the mortgage famine that has sent house prices tumbling and new Bank of England figures suggest no respite is in sight. By Sean O'Grady

In a report long on analysis and short on solutions, Sir James Crosby has told the Government there is no end in sight to the mortgage famine – and there is very little ministers can do about it.

Sir James, a former chief executive of HBOS, said in a letter to the Chancellor, Alistair Darling, that "a shortage of mortgage fin-ance will persist throughout 2008, 2009 and 2010", and the crisis will "take its toll" on the housing market and consumer spending.

Even in this interim review, Sir James in effect ruled out any sort of state guarantee in the mortgage market on the American model, because "I think it unlikely that it would be right to tackle this century's problems with last century's solution".

Recent problems affecting the big American mortgage corporations, Fannie Mae and Freddie Mac, have discredited the idea. But Sir James even poured cold water on some of the more modest options put forward in his own review, stating that "I doubt whether, on their own, such initiatives will do much to increase the demand for mortgage-backed securities".

With no great show of enthusiasm, the review notes proposals to reform the Bank of England's Special Liquidity Scheme, proposals to improve the transparency and attractiveness of mortgage-backed securities to lenders and international efforts to inject some confidence into the market.

The option of doing nothing is also explicitly on Sir James' agenda: "I should stress that I may yet recommend that the Government should not intervene in the market, on the grounds that such intervention would create more problems than it would solve."

The review will disappoint ministers, who hoped that he would offer more help in their stated political objective of being seen to be sympathetic towards "hard-working families".

The Liberal Democrat's shadow Chancellor, Vince Cable, said: "Sir James' caution towards government intervention in the housing market is welcome. It is critical that siren voices in the City don't seduce ministers into using taxpayers' money to underwrite new bank lending and reinflate unsustainable house prices.

If the mortgage market is still in slump until 2011 it makes the NHF prediction of a 25% rise by 2013 rather unlikely.

Of course this report might scare the govt enough to override swervin Mervyn and incorporate the uk version of fannie mae and guarantee all new mortgages.

And the mortgage companies continue to see the market slide

House price falls continue in July

* The price of a typical house fell by 1.7% in July

* The price of a typical house is now £15,000 lower than this time last year

* Housing purchase activity reaches a new low

* Weakening economic conditions raise the likelihood of earlier interest rate cuts

“The price of a typical house fell by 1.7% in July, bringing the annual fall to 8.1%. This brings the average price to £169,316, almost £15,000 less than this time last year and its lowest level since August 2006. House prices have now been falling for nine consecutive months, but on average are still almost £11,000 higher than three years ago.

[snowychap]

Average home price expected to fall £50,000

The housing market slump will wipe £50,000 off the value of the average British home and plunge one in seven homeowners into negative equity, influential new research suggests.

Some 70,000 mortgage-holders already owe more than their homes are worth after the near-10 per cent falls in house prices over the past year, Standard & Poor's (S&P), the credit ratings agency, said. It forecasts that prices will fall by a further 17 per cent, or £30,000, by next April, putting 1.7 million borrowers into negative equity. A 17 per cent fall in prices would take the value of the average house to about £150,000, down from £199,600 in August last year, according to Halifax figures. S&P said that for every further percentage point decline in house prices, between 60,000 and 180,000 extra homeowners could fall into negative equity.

The news came as a poll showed that consumer confidence had tumbled to a 34-year low. The GfK/NOP index measuring attitudes to personal finances and Britain's economy fell to -39 this month, down from -34 in June and the lowest level recorded since the series began in 1974.

There are fears that the increased pressure on homeowners as utility, fuel and mortgage bills rise could cause more people to fall behind with home-loan payments. Borrowers in negative equity who miss multiple mortgage payments or who want to move home could be forced to sell their properties at a loss.

A further 17 per cent fall in house prices would push the average mortgage of those in negative equity up to 108 per cent of the value of their property, leaving them with a debt of £12,500 even if they sold up, S&P said.

Lloyds TSB, the third-biggest mortgage lender, which yesterday reported a 70 per cent drop in first-half pre-tax profits, said the number of its mortgage accounts three months or more in arrears rose by 3 per cent in the past year. It expected house prices to fall by a further 10 to 15 per cent this year, and 5 per cent next year.

Homeowners with a blemished credit history are more likely to fall into negative equity because more of these sub-prime borrowers bought their homes with small deposits. Nearly a quarter of them would be in negative equity if house prices fell a further 17 per cent, while 13 per cent of prime borrowers with clean credit histories would be affected. Borrowers in the East and West Midlands are more likely to be affected by negative equity than homeowners in other parts of the country, S&P said, because house prices there had risen more slowly in the past three years. More than one in five borrowers in the region would be in negative equity if house prices fell 17 per cent, while a similar fall in Scotland would force only 6.2 per cent into negative equity after strong rises in house prices there since 2005.

Some analysts predict sharper house price falls than S&P's forecast of a 25 per cent drop between August last year and next May. Global Insight, the economic consultancy, said prices would fall by 30 per cent, while Capital Economics expects a 35per cent drop.

But there was a glimmer of hope for homeowners. Abbey and HSBC announced mortgage rate cuts. HSBC has cut the rates on its fixed-rate deals by up to 0.31 percentage points from today, while Abbey will trim the rates on its two and three-year fixed and variable mortgages by up to 0.15 percentage points tomorrow.

[snowychap]

For those in the market place at the moment the following figures might be of interest:

County-by-county: completion prices as a percentage of asking prices

The latest data from the Bank of England shows new mortgage approvals fell by 68 per cent in June to 38,000, the lowest level since the early 90s. The figures prove there are fewer buyers than ever in the market place.

Those buyers that remain are increasing undercutting asking prices, according to estate agents, in an attempt to grab a bargain. Lloyds TSB, which announced a 70 per cent fall in profits today, said it expects house prices to fall 15 per cent by the end of the year.

Times Money has put together a list using figures from Hometrack, the property data provider, showing average completion prices as a percentage of original asking prices for each county in the UK.

[table]

[row][col]Dorset [col]88.9%

[row][col]Teesside [col]88.9%

[row][col]Berkshire [col]89.3%

[row][col]West Sussex [col]89.6%

[row][col]London - East [col]89.7%

[row][col]London - North [col]89.7%

[row][col]Wiltshire [col]89.7%

[row][col]London - West [col]89.9%

[row][col]North Wales [col]89.9%

[row][col]Gloucestershire [col]90.1%

[row][col]London - South East [col]90.1%

[row][col]Cambridgeshire [col]90.2%

[row][col]Cornwall [col]90.2%

[row][col]Hampshire [col]90.2%

[row][col]London - North West [col]90.3%

[row][col]Avon [col]90.4%

[row][col]South Wales [col]90.4%

[row][col]London - South West [col]90.5%

[row][col]Mid Wales [col]90.5%

[row][col]Birmingham [col]90.6%

[row][col]Norfolk [col]90.6%

[row][col]Northumberland [col]90.6%

[row][col]South Lincolnshire [col]90.6%

[row][col]Greater Manchester [col]90.7%

[row][col]Buckinghamshire [col]90.8%

[row][col]East Sussex [col]90.8%

[row][col]Somerset [col]90.8%

[row][col]Warwickshire [col]90.9%

[row][col]National [col]90.9%

[row][col]Bedfordshire [col]91%

[row][col]Merseyside [col]91%

[row][col]Nottinghamshire [col]91%

[row][col]Shropshire [col]91%

[row][col]Devon [col]91.1%

[row][col]Lancashire [col]91.1%

[row][col]Derbyshire [col]91.2%

[row][col]Hertfordshire [col]91.2%

[row][col]Northamptonshire [col]91.2%

[row][col]Staffordshire [col]91.2%

[row][col]Tyne and Wear [col]91.2%

[row][col]Essex [col]91.3%

[row][col]Leicestershire [col]91.4%

[row][col]Suffolk [col]91.4%

[row][col]Cheshire [col]91.5%

[row][col]Hereford and Worcester [col]91.5%

[row][col]South Yorkshire [col]91.5%

[row][col]North Yorkshire [col]91.6%

[row][col]County Durham [col]91.8%

[row][col]North Lincolnshire [col]91.8%

[row][col]Oxfordshire [col]91.9%

[row][col]Central London & City [col]92.1%

[row][col]Kent [col]92.1%

[row][col]West Midlands [col]92.2%

[row][col]Surrey [col]92.5%

[row][col]West Yorkshire [col]92.7%

[row][col]Cumbria [col]94%

[row][col]East Riding of Yorkshire [col]94.7%

[/table]

[Jon]

I'm quite scared now. My tenants have just given me their month's notice, and i can't afford to pay 2 mortgages for any length of time.

I'm not a landlord by choice either. Couldn't sell my falt for a decent price 9 months ago, and saw an aprtment i wanted, so had to remortgage my flat to raise an advance and let my flat out.

tenants are now offski, so i either need to get some new tenants in, or sell sharpish, for what would be a very sh*t price.

Not good.

Damn you, property market!

[snowychap]

The rental market isn't too bad at the moment, though, is it?

[Jon]

The rental market isn't too bad at the moment, though, is it?

I hope not! :|

[mockingbird_franklin]

The rental market isn't too bad at the moment, though, is it?

I hope not! :|

I hope not as well, as i can see myself having to rent my house out and use the income to subsidise any rent i pay in oz, fortunately as of Saturday I owe under £100 on my mortgage + any interest owed that will go on in Jan (about £1700).

If I could get 90% of valuation and quickly I'd be a pretty happy chap.

[Gringo]

That's not the continuation of the crash - that's the start of the next bubble. Construction firms are laying off staff or closing down. So when the financial markets return to normality (2010/11) the supply will be even further diminished compared to demand. Welcome to bust and boom economics.

There ya go

Property prices 'may boom by 2010'

Property prices may be booming again by 2010 as the sharp fall in housebuilding threatens to see demand outstrip supply, according to a report.

The Centre for Economic and Business Research (CEBR) said a halt in housebuilding amid the credit crunch could fuel a 30% rise in prices between late 2009 and 2012.

[snowychap]

Didn't someone say they were going to bring an end to 'boom and bust'?

[snowychap]

Edit: Double post.

[snowychap]

Plan to suspend stamp duty for all home buyers

Gordon Brown is considering suspending stamp duty in an emergency measure to kickstart the housing market, it was claimed last night.

The idea, being worked on by the Treasury, is part of a package of help for hard-pressed families.

Details passed to The Sun suggested that buyers at all levels would avoid paying the tax, which has brought in £31.5 billion over the past ten years.

Stamp duty is paid by property buyers, and is levied at 1 per cent for houses between £125,001 to £250,000, 2 per cent for £250,001 to £500,000, 3 per cent for £250,001 to £500,000 and 4 per cent for £500,001 or more.

Officials will present their findings to the Prime Minister when he returns from the Olympic Games closing ceremony at the end of the month.

Figures last month showed that stamp duty receipts were being hit especially hard by the credit crunch. The downturn means not only that house prices are falling but also that fewer homes are changing hands.

The Chancellor hinted in an interview last month with The Times that changes to stamp duty were possible. “Stamp duty is always a factor when people buy and sell houses but we need to make sure that we support the financial system too,” he said.

The Tories have pledged to abolish stamp duty for most first-time buyers.