House prices stutter downwards again in November

She saved her birthday and Christmas money in a little pottery pig under the bed and when a distressed sale became available she grabbed a self certification mortgage put in a low offer, and completed the sale 28 days later.
The property was on the market for £135,000 she paid £128,500 It hopped up briefly to £165,000 and now stands in at about £142,000. On paper the price has fallen but as she isn't selling that is one less property available to the market.

Prices simply will not fall across the board and will continue sell at a price agreed between the vendor and he purchaser. Unless you are an active part of this process ie an active purchaser then you simply have no effect on the market at all. The property you want to buy will be bought by someone who does more research on how to finance their purchase than you or who is better at saving the deposit than you.

• 05 December 2010 12:02 PM

Tom is stupid for choosing the wrong people to listen to.

It doesn't offend me at all and calling him stupid shouldn't be seen as such.

With any remedial there has to be a way to get through to them.
I take it that you must be another visitor from HPC.

When the journalists and pundits publish something that I consider correct I will agree with them but if they print rubbish then I will dissagree with them.

I was the first on this board to say that Ian Duncan Smith was talking rubbish when he claimed that Landlords are ripping off the nations Benefit claiments, it turned out he got his info from a web portal!

Ther are people on this site who do know what they are talking about, people who have modified government thinking and who are about 6 months ahead of most folk when it comes to predicting the housing future.


Journalists report on the past and despite their credible verbosity so do most of the industry experts. Tom and people like him really need to get close to their local agents and take their advice rather than listen to Guff designed to sell newspapers or drive traffic to a portal.

I actually don't think Tom was stupid but I do think he is a troll who is part of a farcical attempt to talk prices down.

Like 90+% of the population who are not in need of selling our properties, the present ups and down of the market mean absolutely nothing.

People like you and people like Tom will not realise till it is too late that you would have got a better deal yesterday, last week, last month.

• 05 December 2010 10:18 AM

How does you daughter own a house if she has never had a job and never hand any hand outs?

• 04 December 2010 10:29 AM

Why accusse tom of being an idiot? Why does it offend you for someone to have an opinion that differs from yours? There's no need to be rude about it. In my area, prices have dropped and continue to do so. There are 5 - 10 new reductions every day. Thats says to me that prices are droppping and few of them are your so called "distressed sales". When there are weekly forecasts of prices rising and falling from industry "experts", it is incredubly naive and arrogant for one person to proclaim that they know what will happen and abuse people who think otherwise.

• 04 December 2010 10:28 AM

All the tenants in rented accommodation hoping that a huge rise in interest rates will see house prices crash are forgetting that their cozy rented home will probably get repossessed and they will be on the street temporarily.

Rents will have to rise if interest rates go up.

ps the banks are not going to move from 25% deposits for a long time - so don't think you will be able to buy even if prices come down by another 20% !!!!!!

• 02 December 2010 13:53 PM

Tom,

Scott’s comments below are bang on the money – we were talking here about all the houses we wish we had bought over the years but didn’t and I think you are at great risk of always being on the outside of the market and spending a life time talking about the deals you never did.

There’s also the point on the last proper big crash, I remember it well and people were actually posting their keys through the front door of Abbey National as the monthly payments (it was the monthly cost that drove them all to it) spiralled flooding the market with repos in quite spectacular fashion, in fact all the agents lived quite well off the back of divorces, probate and repos.

You need to be praying for massive interest rate increases in a short period of time to bring the prices down, even then you will have massive interest to pay yourself and if your ‘dream’ of 50% price drops comes then good luck scrapping in London with the cash buyers hoovering everything up in sight to rent out at a massive weekly rate to all those people that refuse to buy

Of course I might be wrong so best you stick to the journalists but if prices dropped by 50% next week they would recover before we sat down for Christmas dinner.

• 02 December 2010 13:48 PM

Tom - What type of property do you want, how many beds, which location and how much you are expecting to pay?

• 02 December 2010 11:29 AM

Tom, you say that house prices are 5 or 6 times salary but which salary?

I started in agency in Islington in the mid 1980s and at that time it was still vaguely affordable for first time buyers - in fact as a not terribly well paid negotiator I managed to buy a 1 bed flat with my girlfriend. If you look at islington now some 25 years later there is no way a trainee neg could but a flat as they have been priced out of the area.

The problem is that there are any number of twenty something city types with cash burning a hole in their pockets who can afford those prices. Rather than complaining about it though FTBs should look at the areas they could afford and buy there. I would dearly like to be able to afford to buy a house in Knightsbridge but know that, short of a lottery win, it's not going to happen.

When prices fell in the early 90s the buy to let market was significantly smaller than today and many people who were giving up and handing their keys back because of negative equity never considered that option. Only if the bottom drops out the BTL market will we see a problem as there will be a huge increase in supply.

• 02 December 2010 10:59 AM

You are either incredibly stupid or simply a Troll!

There are 30 people waiting for every tenancy. that is 30 people who can not afford to buy or can not find anywhere else to rent.

If you don't understand the basic HP inflationary signs that are around you than you are the former.

As you claim to be in work and therefore can not possibly be that stupid then you are a Troll looking for a fight.

Tell me 1 reason why a non distressed vendor should reduce the price of their property and sell it.

Game, set and match to me!

• 02 December 2010 10:41 AM

On behalf of all landords i would like to thank Tom and his mates for keeping us in beer.Cheers!

p.s you rent is going up next month

• 02 December 2010 10:02 AM

I would rather listen to the economics than the maths. Actual sales are plummeting, prices have been falling for months. We all know house prices are overvalued as they need 5-6 times salary. Prices will fall to what people can afford, I can't see a status quo. Every seller who drops their price and sells puts pressure on those who don't.

• 02 December 2010 09:43 AM

Great Post.

I do feel for the FTB that are struggling and really want to buy, but on top of them many of them are way to fussy and have got over ambitious ideas of what they want in the area I cover. A lot of FTB think with the mentality that we want to buy somewhere cheap, stay a couple of years and pull a lump sum out and move up the ladder. Im sorry, not going to happen those days have gone. A house should be a home!

• 02 December 2010 09:27 AM

Very well said

• 02 December 2010 07:17 AM

You and your mates know best Tom

I have a son and daughter who both own their own homes, both now have over 33% equity in their properties, they have not been give a single penny in handouts (unless you count child allowance) and neither of them have inherited a penny.

My daughter hasn't got her first job yet and my son earns under £12,000.

In the past 2 years both of their properties have continued to rise.

What is going on here Tom?
Do they know something you and your mates don't? No, Do they read paper pundits teling them what is going on? No,they listened to the advice they were given.

I don't know if you bothered to listen to the Maths teacher Tom,
If you did you will be able to put two and two together to work out that a 0.8% drop in house prices mean absolutely nothing to you.
The 0.8% drop is a historic figure representing properties sold to other people, not to you. In that 0.8% neither your nor I can tell whether it is 0.8% on all properties or whether there is a 25% drop on Kensington mansion repos and a 15% rise in starter homes.

If you think prices are going to drop because you and your mates plus a heap of other folk think they control the market you need to think again. People are still buying property and you think He He they are going to come a cropper . The thing is I know people who have had £50,000 theoretical negative equity on £75,000 mortgages at 11%. Because they didn't sell they now have 50% equity in their properties. Their mortgage payments have come right down and it doesn't matter to them what happens to the market, they have a £75,000 mortgage that used to cost them £700 in interest a month is now costing £120/ month.
They aren't going to sell and free up that property for you or one of your mates to buy. And it doesn't matter that they live in the wrong area, the home owners where you want to live aren't moving. That is not because the paper say prices are dropping. it is beacuse it is so very cheap to stay put.

As I said earlier you need to get to a distressed sale before anyone else. Those are the only properties where the prices are falling.

• 02 December 2010 07:06 AM

House prices are going down not up. They have been for months.

What incentive is there to lose a hard saved deposit when it will be wiped out in the falls.

Surely it is better to hold off buying now. All the indices show prices falling and have done for months. All the predictions are bigger falls next year.

It makes sense for us to hold out and save more. My FTB friends are all thinking the same at last.

• 01 December 2010 23:41 PM

I really do doubt you can save asquick ast they are going up.

If you can find somewhere in the next 3 weeks buy it. Once us agents get to even the slightest sniff of movement we are duty bound to add any rise we notice to the asking price, as we work on round numbers that is either 5 or 10%. Typically you won't know about the hike until 6 weeks into the rises.

You can take what info you like from where ever but if I were you I would make real good friends with the agents in the area you "Want"to buy, treat them with respect and you might just find somewhere to own.

When I moved last a please and thank you saved me £79,000.

Do you know what a 3.4% increase respresents on the sought of property you want to buy?

The reason Newspaper people sell chip wrapping is because that is what they know. The reason Agents sell houses is because that is what they know. Go figure where you and you mates ought to be getting advice.

• 01 December 2010 19:41 PM

My friends and I will just hold off buying. Each month prices fall it gives us hope and allows us to save more. The Telegraph state house prices to fall another 20%. So better hold off buying till then.

Buying futher out isn't really an option with rail fares shooting up and working shifts.

• 01 December 2010 17:36 PM

The lenders (the banks) can't really do very much to help you. I do have every sympathy with someone with a 25% deposit and a good salary. If I were you I would look outside where you want to live and just buy something. 25% deposit in London would probaly buy some places outright in other areas.
I am guessing you have happened here from HPC, We agents are not all bad so I will give you the same advice I gave my son, just buy something and you will always have a foothold on the market. No matter what happens with prices up or down you have pegged your mortgage at what you can afford right now. Even if you have to move in with relatives again for a short term, increasing rental yields mean that your 75% mortgage will be covered and your tenant wll be paying off some of the capital too.

Blame Blair and Brown who kept prices artificially high with cheap credit, all the time they were collecting Tax VAT and Stamp duty on every deal, they earnt about 2.5 times what the average agent did out of every one of those sales.

Where did all that money go? It was buying votes to keep them in power.

PS it is very rosey where I am sitting. I learnt how all this worked when I was 21 and have been putting money away for this very predictable rainy day.

• 01 December 2010 16:54 PM

Ray, i think you are wrong, my typical FTB property is 100k (in 2007 they were circa 140k), my typical FTB can only get a mortgage for 60k and with deposit can only afford to buy at 75K, so these properties need to fall further because salaries will not rise. The FTB are crucial to get chains moving

• 01 December 2010 16:45 PM

Prices are now,on average, just about right.
It is the 'money lenders' who are wrong.
Discuss!

• 01 December 2010 16:19 PM

To Please come down the front Tom

You should very know that house prices are extremely overflated by tradional standards. You should know that this was caused by cheap credit, mass fraud and irresponsible lending. Shock horror the fraud is being clamped down, credit is getting far more expensive and lending criteria is a lot tighter.

You may call us dreamers but you must realise that something is wrong when people have got 25% deposits, very good salaries and still priced out. Hence we look forward to price drops as it means we are closer to buying.

Also you should remember the more prices come down the cheaper it is for existing owners to move up the ladder. Their property may be reduced in price but so will the one they want to buy.

I doubt every thing is so rossy in your outlet as you make out. Prices will continue to fall.

• 01 December 2010 16:02 PM

A rise in inflation will create a demand push for more inflation, all them poor souls who have daft size mortgages are going to do what? Sell up and buy something cheaper, rent? All that is going to be created is greater demand/ shorter supply at the bottom end of the market.
High demand, short supply creates house price inflation. . Homtrack statistics show that following a fairly big fall in 2003 prices have remained faily well static ever since with a shallow sin wave of minor peaks and troughs.

• 01 December 2010 14:58 PM

the future of house prices lies in inflation and interest rates, and the delicate balance being played out each month by the B o E, if they followed their mantra they would have already put rates up, luckily for homeowners they are appeasing policitians and bankers, how long can they do this before we all start paying the price through rampant inflation is the big question.

• 01 December 2010 14:25 PM

Pin back your lug holes, stop looking out of the window.

If I have got your attention. The first time sellers can not afford to move up 1 rung on the ladder, If they bought in the last 7 years they are not going to move. Your only hope is to find a distressed vendor sale and get to it before anyone else. There are so many of you hoping prices will come down that prices will not come down.

The people who realise this are pestering us agents on a daily basis. They come into the offices with a mortgage offer and just get on with buying. We don't bother ringing dreamers like yourself. We don't need to. The only property where prices are going to come own are those where the vendors have as much understanding of how the property industry works as you.
You as a purchaser want the commodity price to come down, the vendors want it to go up. As they own the trump card what do you think is going to happen? Spend what deposit you have on the lottery its a double rolover and you might be lucky!

• 01 December 2010 13:52 PM

Interestingly the only thing to gauge in our area is the snow - all of my competitors are shut...........

• 01 December 2010 13:03 PM

How much more of this 'three times weekly guff' from every angle have we got to put up with?
Land Registry figures in arrears once a month is sufficient info.
Lets get on with life!
Merry Christmas.

• 01 December 2010 12:54 PM

Good news with the price falls. Lets hope sellers drop there prices more with this news and first time buyers can start getting on the market again.

Houses are still too inflated though.

• 01 December 2010 12:40 PM

When will the brainless nerds in these lending houses get to grips with the season thing. People go on holiday and go Xmas shopping and do not look to buying or selling houses at those times - simple aint it? Here we are again and I predict this kind of headline will be back come next July/August.

In the meantime get out there flogging the ones you've got.

Roll on 2011.

• 01 December 2010 12:31 PM

Sorry John but that IS what is going on, you are absolutely correct that they don't have that sort of spare income but they are still spending it each and every week.

Maybe it is about time Estate Agents had a £20 credit reference check for anyone on their books. Only when the true demand for property is known can you even start to work out the long term future of the housing market. "Want" satisfaction is an indication of nothing, "Need" satisfaction is what will determine the future. With Demand growing by the day and supply strangled by recession, Sales and Rental prices will only go up.

PS You need to go an work out what a month of spending is, It is not £400. Without a basic grasp of money how on earth can you consider a mortgage.

(100X52)/12= £433.33

• 01 December 2010 12:27 PM

Land Registry figures lag ...

And if you thinka FTBer has 100 GBP/weekend 'extra' to spend and/or a FTB is spending that every week-end (disposable income of 400 GB/month) then you are living in a whole different world to the rest of us.

• 01 December 2010 12:03 PM

There are early signs that the flow of new property onto the market may be slowing down again as potential sellers observe the recent weakness in prices and decide against marketing their properties at the current juncture

• 01 December 2010 10:43 AM

Average price £165,505
Change Monthly -0.8%
Annual 3.4%

The annual Growth of 3.4% means that a FTB has to find an additional £93.78 each month just to keep their deposit saving in line with the average price increase. For the average FTB that means siting at home on saturday night once a month watching X Factor and eating beans on toast rather than a Take Away.

A 0.8% drop means they have got £264 extra to spend. That hardly scratches the surface of the extra £4488 mortgage over purchasing this time last year.
HPC can say what they want, Matey at the Nationwide can spew out his stats but the reality is that prices are still rising quicker than most FTBs can save.

• 01 December 2010 10:24 AM