This year looks set to have the lowest number of housing transactions in 40 years.
A total of 840,000 transactions are predicted, almost 50% lower than in 2007, and the equivalent of the average home changing hands just once every 26 years.
House prices are also heading slowly but surely down, Hometrack reported this morning.
The survey says that asking prices tiptoed down just 0.2% this month – but after similar tiny falls every month for the last 16 months.
The small size of the falls means that average national house prices are down by just 2.3% compared with a year ago. Consumer confidence, says Hometrack, is down by a lot more.
Only in London have house prices remained unchanged over the last two months, but Hometrack warns that London is unlikely to escape the continued turmoil in the economic markets, and that when prices start to fall in the capital, the scale of headline price falls will start to accelerate.
Nor is the drop in national asking prices boosting sales. Hometrack says that while it expects a four-decade low in transactions this year, it does not think sales will pick up next year.
Demand from buyers has continued to drop off, by 2.2% in the last month. Hometrack also observes that only ‘committed sellers’ are putting their homes on the market and are having to ‘align’ their prices to meet what buyers are prepared to pay.
Richard Donnell, director of research at Hometrack, which bases its findings on responses from estate agents, said: “Demand is likely to continue to fall in the run-up to Christmas, keeping the supply/demand balance in negative territory.
“As a result, Hometrack expects to see an acceleration in price falls in the months ahead.”
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Comments
Points well made on both counts PeeBee - despite the small hour of the night.
If you can't sleep, there's always the HPC site ; )
rant. You remember only a couple of hours or so ago I said to you "(For what it's worth, in my opinion any Estate Agent who 'wants' a house price crash doesn't want it for YOUR benefit...)"
Well - I'd like to offer what I would suggest adds weight to that statement. Saddo that I am - I'm sitting here at 2am with nothing better to do than catch up on 'who's saying what' about the property world.
Remember our 'friend' Realising Reality? This is from his online blog that he keeps trying to shove down our throats:
"House asking prices are high, all over the place, and way out of kilter with earnings, across the UK, because estate agents aren’t being ‘clean’ about what achievable prices are...
We’ve had personal experience of this currently and have found it impossible to move from Nottingham to Cornwall in a chain, owing to unrealistically high asking prices in Cornwall..."
So - can it be taken from the above that Mr RR cannot afford (or simply doesn't want to pay the price of...) the type of house he wants to buy, where he wants to live?
Hmmm... no vested interest whatsoever in his pushing left, right and centre for the immediate lowering of house prices, then... ;o)
rant - you didn't think I was going to go to bed with you in the lead, did you? :o)
You said "There are a few who post here in attempts to ridicule those that suggest prices are too high. They use various names, or post anonymously. Rarely do they put forward anything approaching a constructive or coherent comment."
True. Now, while I assure you that the person who 'reloaded' people's posts on here some time ago was not me, I am going to do the same to yours and I make no apoloies...
"There are a few who post here in attempts to ridicule Estate Agents. They use various names, or post anonymously. Rarely do they put forward anything approaching a constructive or coherent comment."
It doesn't matter which individual or which 'side' started it, mate - the rot has set in... and I doubt whether it will ever stop.
Incidentally, following on from my last post, the five stages of overcoming grief and loss (as shamelessly copied and adapted from Wikipedia) have been described as:
Denial — "I feel fine."; "This can't be happening, not to me."
Anger — "Why me? It's not fair!"; "How can this happen to me?"; '"Who is to blame?"
Bargaining — "I'll do anything for a few more years."; "I will give my life savings if..."
Depression — "I'm so sad, why bother with anything?"; "What's the point?"
Acceptance — "It's going to be okay."; "I can't fight it, I may as well prepare for it."
There was a fair bit of the 'denial' stage about on this site a year ago. Recent months have seen a noticeable shift towards 'anger' in my opinion.
There are a few who post here in attempts to ridicule those that suggest prices are too high. They use various names, or post anonymously. Rarely do they put forward anything approaching a constructive or coherent comment.
In reality, it's more likely to be a smaller group using multiple aliases. Their reasons are most likely down to their own personal circumstances at having jumped in to housing too much at the peak of the market. They do not like to be presented with facts that show their investments are failing, and have a kneejerk reaction to those whose posts suggest that.
rant: Thanks for clearing that up. Erm... sort of. A bit. Maybe. ;o)
I kinda see where you are coming from - so let me do the same (but in waaaaaay longer terms - and a few caps thrown in cos you know I like them a bit! ;o) ). Apologies in advance for the fact that this is gonna be a long one...
Sorry - when I said "a hopeful HPCer" I wasn't actually limiting that category exclusively to those who frequent the HPC site - but all and anyone who dream/hope/yearn for a crash in house prices.
Thing is, there really are only three types who come on here - and I believe I have pretty much summed them up in the correct categories. In 'Camp 1', there's yer AceofSpades, Jonnie, wardy, FBA types (sorry to those I've omitted - certainly not out of disrespect) who walk the line and fight the fight day in:day out.
In the second camp there's the likes of Industry Observer, Happy Chappy, - and I'll bring Ray Evans in at this point - as those who walk on the outer path (in Ray's case of course he is now Home Guard following his distinguished service at the Front Line...;o) ); and last but certainly not least:
There is the 'HPC Camp' rantnrave and Sibley's... - who do not fear to tread among the enemy!
Of the three 'camps', only the first is easily definable. You either ARE or you ARE NOT a practicing Estate Agent. So - the likes of Ray (and I) cannot really be part of that camp.
The second group is slightly more wooly, I have to say. It will contain the most diversity; and dependent on the part of the industry they work in, will dictate where they stand on the whole prices debate (as well as their own personal circumstances and opinions, of course...).
The final group - 'the hopeful HPCers' camp as I named them - APPEAR to have one aim... but SO MANY different agendae. I don't have a problem with you, Sibley's..., FTB Dan or any GENUINE would-be buyer who wants the best deal for themselves, as you know. If I were in your circumstances I would be looking for the same, and when it comes to my kids dipping their toes in the homebuying water I'll make Henry Pryor look like a rank amateur in negotiating DOWN a price! :o) The ones I DON'T 'get' are those who in my opinion are riding the whole HPC pony for reasons that defeat the whole point of the cause - and therefore weaken it for you and others. The ones who, I am absolutely certain, would stamp all over the fallen bodies of real FTBs in the post-crash rush in order to snap up a dozen properties at knock-down values and to then rent them out to those they trampled on, or to flip them for a profit.
(For what it's worth, in my opinion any Estate Agent who 'wants' a house price crash doesn't want it for YOUR benefit...)
Now - if you can tell me another 'group' who, in their right mind would be frequenting this site and why, I will take my titfer off to you, matey! ;o)
Re your post at 16.49:
"Are these the words of a practicing Estate Agent; of someone working in another sector of the property industry; or simply a hopeful HPCer?"
I'm saying that these aren't mutually exclusive groups!
rant: "It's not so clear cut PeeBee - there are several EAs who post on HPC (and not to go against the points made there)."
Sorry, mate - you've lost me there. Maybe it's late; maybe I've had one of those days; maybe even this grey hair of mine is actually platinum blond - but I can't for the life of me think what you're on about!
Please explain in nice easy terms for this thick Geordie to comprende! :o)
It's not so clear cut PeeBee - there are several EAs who post on HPC (and not to go against the points made there).
Baldy: "Not enough money in the pot or going into the pot so unless prices come down it is a bolted on certainty that 2012 will be even worse. Much worse is my prediction."
Are these the words of a practicing Estate Agent; of someone working in another sector of the property industry; or simply a hopeful HPCer?
I just like to know who or what I am going to lock horns with... ;o)
You ain't seen nothing yet. In 2012 it will be 41 years and subsequent years will break the record still further. Not enough money in the pot or going into the pot so unless prices come down it is a bolted on certainty that 2012 will be even worse. Much worse is my prediction.
Lowest figures for years and EAs all still here, how sad for you silly knockers!
Puzzled...: "No, sorry, your figures should be based on 1 salary - 1 and a half at the most. When I was young it was 2.5 times the main earner and 1 times the other."
EXCUSE ME??
THAT world has gone - remember? YOU are the one saying that the world has changed and that you cannot look to the past to dictate the rules for the future! Then you come up with the above merde de taureau.
Respectfully suggest you GET YOUR ARGUMENT IN PROPER ORDER!
Peebee.....Much appreciated thanks from me and the missus. Now when we gonna argue about something :0)
I disagree with property wire that QE and low interest rates will keep prospective buyers active.....I believe it is more likely to make owners nest and keep houses on the market longer at a higher price. Thus keeping transaction volumes down.
How dare they be positive!!! See a cut and paste like rant!
Experts anticipate positive growth in the United Kingdom’s property market in 2012, although it may not be as good as initially suspected. Economists believe property prices and supply will improve in London and other business hotspots, carrying the overall market growth up to 3% over current levels. The Eurozone’s financial woes and job losses that were higher than expected will stifle growth, particularly in areas with less commercial activity, but quantitative easing and low interest rates may help keep prospective buyers active. For more on this continue reading the following article from Property Wire.
National house price growth in the UK could reach 3% in 2012 but there will be wide regional variations, it is predicted.
The current regional north south divide is expected to deepen and unemployment or concerns about job losses is set to be a major factor.
It is also expected that new housing supply will remain historically low, rents will continue their upward path, increasing by approximately 5% annually, and the mortgage market will remain limited as a result of the Eurozone turmoil.
Nice simple cut and paste for simple rantrave, well done.
"Everything else is being globalized - savings must surely be next."
Aye - I'm sure that there will be some nice Icelandic Bankers who will "look after" your life savings for you in their very capable hands...
(was Un...) Happy Chappy:
CONGRATULATIONS to you and Mrs Chappy!!
Nice to see some GOOD news on EAT... ;o)
Nationwide UK house price in October 2011: £165,650
Nationwide UK house price in November 2011: £165,798
That's a rise of £148, or less than 0.1%. It is also based on a circa 10% share of a dwindling mortgage market.
The Land Reg numbers are far, far more comprehensive.
The estate agents must be drowning their sorrows or driving minicabs so I'll save them the trouble
'this is a great time to buy, the market has bottomed out and there are some real bargains to be had'.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:
“UK house prices increased by 0.4% in November, taking the annual rate of growth to 1.6%, up from 0.8% the previous month. The price of a typical home is now £165,798.
“House prices have remained surprisingly resilient in recent months, despite the deterioration in the economic outlook.
Hawkeye: - from the DirectGov web site - 'If you find that you're being asked to pay tax both in the country of origin and in the UK, you may be able to claim relief - ‘foreign tax credit relief’ - from double taxation by completing the foreign pages section of the tax return. The UK has signed many double taxation agreements with other countries. These are arrangements that aim to prevent double taxation.'
I'm not interested in evading tax - I don't mind paying my whack - but I don't like leaving my money in a UK bank to earn 2% while they lend it out at 6% - when I can get 6% overseas.
The point I was trying to make was that we now live in a time of very poor investment returns. The stock market is still way below its highs in 1999 and, in fact, has returned NOTHING over the last 13 or 14 years. If you have been paying money into a pension over the last 15 years which has been mainly invested into FTSE 100 companies (by those so clever people that manage pensions) then your pension pot is currently worth less than the money you have put in. The fund managers, of course, have still had their 3.5% off the top each year. No problems for the clever people.
The point I was trying to make was - I wouldn't be suprised to see managed savings accounts emerge soon - backed by insurance in case of default - that move people's savings around the world into the highest paying (safe) savings accounts. When this happens we'll see interest rates rise. At the moment if you are elderly (for example) and have 100k in the bank that you get a bit of interest off to supplement your meagre pension - the returns available here mean that a lot of people might be tempted to get 3 times the return by moving the money abroad.
Everything else is being globalized - savings must surely be next.
Chris Clark: 'Add to the mix that SENSIBLE lending criteria should be about 4 times salary (not the crazy average of 6-7 times we had in 2007 with all the "liar loans"). Which means that an average couple on average salaries of £26,000pA could borrow £208,000.
This average couple are at little house buying stage, not bachelor pad stage, perhaps baby on the way or even working on number 2 little squeaker.
There £208k+deposit - call it £230k for the sake of an argument - should be buying them an average little 3 bed house.'
But your figures assume that both people earn the average wage and that, as most couples are male/female and most couples seem eventually to want to have children, both of them will work throughout the term of their mortgage(s).
Is that what we have come to - that houses are so precious, so expensive - that people must borrow so much money to GIVE TO THE PERSON WHO OWNED THE HOUSE BEFORE THEM (because that is all that is happening - the money the couple borrow is to provide the equity of people higher in the chain) - that in a (let's say) traditional family - mum and dad both have to work full time to put a roof over their heads.
That pre-school kids must be dropped at nurseries at 6.00 in the morning and picked up at 6.00 in the evening - that when people get in from work - then they have to prepare and cook a meal, check the kids' homework, make sure they have PE kit for tomorrow, pick them up from swimming lessons, take them to football training, answer some work emails, put a load of washing on, put the drying on, do some ironing, make sure the kids have clean uniform for tomorrow, ring their elderly parents because one of them is ill ........... etc. etc. .... all because someone who owned the house before them wants some them to provide them with some unearned income!
No, sorry, your figures should be based on 1 salary - 1 and a half at the most. When I was young it was 2.5 times the main earner and 1 times the other. This allowed for the main earner to earn a bit more as time went by and for the other earner to drop out and raise the family.
I seem them around here when I go out for an early morning cycle - cars screeching to a halt outside the child-minder's house - dash in to the door - hand the kid over - often still a baby - then leg it off to a 12 hour commute/working day. Total insanity.
Wage inflation is dead in the public sector.
Luckily house price falls are making up for it.
I think the few remaining first time buyers capable of buying will hold off as they see the falls.
The gradual decline in house prices continues......and will continue......i really think this can be the forecast while the market influences remain as they are.
p.s was Unhappy Chappy....been away on honeymoon so must be a happy chappy now :0)
Puzzled...........
'I've lost patience and moved some money to my sister in law in Australia where I am now getting over 6%.'
Watch out for the man from the revenue as you may have to pay tax both here and in Aus. That may make the 6% look rubbish. Also be aware that to not declare the income is evasion and comes with very stiff penalties in this country.
Nice idea though...... can your sister in law help me please? We can all go down together then.
Who says there's no wage inflation? I got 5% last year and 10% this year. Jeez, even the doleys got 5%. Sounds like you need to work a bit harder Damien.
we can ignore the inflation for now as there is no wage inflation. only the wage inflation can support high house prices. with no wage inflation and high RPI inflation the house prices will reduce as the living costs are going up every day
If you're trying to buy a house, you need wage inflation, not price inflation. That is the reverse of what we have at the moment. With prices of goods in the shop and fuel rising faster than salaries, houses are not becoming more affordable. There is less money to be spent on housing, not more.
If you own a house as an investment, hedge against inflation etc, then inflation and nominal prices falls are eroding that at the value of 7 to 8% a year. It would be better to sell up now and put that money in a savings bond. Somebody who put their house on the market in early 2010 at £200K, looking to downsize, and has refused to drop their asking price until they get that figure, is currently losing hundreds of Pounds a week.
Prices are just too high.
I think we need to put to one side all our experiences (as agents) of the last 5-10 years and think logically.
Also forget all of this HPC nonsense too.
5% inflation and 2% price falls means a net REAL TERMS price reduction of 7% per annum.
Add to the mix that SENSIBLE lending criteria should be about 4 times salary (not the crazy average of 6-7 times we had in 2007 with all the "liar loans"). Which means that an average couple on average salaries of £26,000pA could borrow £208,000.
This average couple are at little house buying stage, not bachelor pad stage, perhaps baby on the way or even working on number 2 little squeaker.
There £208k+deposit - call it £230k for the sake of an argument - should be buying them an average little 3 bed house.
Where I am, that average little 3 bed house will cost at least £350k.
I work inside the M25 in a very average kind of area.
The figures just do not stack up.
Whilst the HPCers are right about the outcome, I really do not think that prices will crash.
As several have mentioned before, inflation at 5% for 5 years knocks 28% off the value.
Add an extra 2% odd price into the calculation and the REAL TERMS value drops by 31% in 4 years.
The only problem is that it is likely that the average salary will also drop in the same time frame too.
I know I sound all doom and gloom, and that as an agent I should be the one trying to "talk up" the market, but I would be lying.
The problem for us poor estate agents in the meantime is that everyone doesn't trust us and if we do try and tell our potential vendors the truth they move on to the next agent who polishes their ego.
Nobody likes me, everybody hates me, I think I'll go and EAT worms.
@Jonnie
Yep, some of the increase during the bubble can be written off with general inflation but not much. From memory general inflation was around 2% for much of the time whereas house prices were shooting up 5 to 10% pa.
I've just bought and didn't discuss inflation with any of the EA's I met. Probably why you haven't either. There is no reason for it to come up.
Hometrack measures just England and Wales. So, in my example, you'd need to start at the 840,000 most northerly places in England, not Scotland. Good point though.
Rental properties are still owned by someone, are they not? One BTLer sells to another - the property still changes hands, even if the tenants inside are the same.
Not sure what the number for social housing is though.
Nationwide house prices going back to 1975, with nominal and real prices displayed side-by-side, can be compared here:
http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php
@Johnson,
Good, we got there -
I get it and all that but I have never, in 26 years and probably about 4000 property sales (with two sides on every deal that’s 8,000 people) had a customer work it this way, naturally there is mathematically nothing wrong with your ‘real terms’ thing but you are either ahead of your time or talking in a different currency to the wider public…….this could prove tricky if / when you buy.
However, that’s your business but while we are here, allowing for inflation what was the % increase that created the ‘bubble’ as some call it? From around 1996 to 2007 we saw prices rattle on a fair bit but based on what you are saying the bubble might not be as big as a part of the growth will have been inflation…….am I right?
Jonnie
rantnrave: "By that data, there are 21,840,000 properties in the UK."
That would be 21,840,000 'OWNED' properties, don't forget...
According to various sources on t'internet, the total number of dwellings in the UK (including Northern Ireland) is 26.02 millionish.
That would require just under 84% of the total to be potentially available to sell, would it not...?
@RnR
I was just trying to keep things simple but I agree and that is the reason my cash savings are with NS&I. RPI + 1ish% tax free, interest paid yearly and compounding.
More than that Jonnie - inflation, like interest, needs to be compounded.
It's not a case of 5x5...
100 + 5% = 105.
105 + 5% does not equal 110, but 110.25
110.25 + 5% equals 115.77
etc
5% inflation over five years would eat away at about 28% of the capital sum, not 25%.
The reason why the bond markets get in a tizzy over 7% interest rates is because on a ten year bond, the amount repaid at 7% over ten years is double what was initially borrowed.
Very, very few people in my opinion understand this principle of compounding when it comes to borrowing money.
@Jonnie
Yes of course. In a climate of general inflation, if the value of your assets doesn't rise in step then they are effectively falling.
Like the value of Granny's £10k.
@Johnson
.................so allowing for inflation (your way) that £300,000 house will 'drop' over 5 years by 25% alone?
Jonnie
By that data, there are 21,840,000 properties in the UK. If 840,000 change hands every year, then it would take 26 years for the entire lot to change.
This is highly theoretical. Some houses would change ownership several times in 26 years, others none at all.
Think of it this way, in one year, the only properties to change hands are the most 840,000 northerly in Scotland. The next year, the only houses to change hands are the next 840,000 most northerly. Slowly working southwards year after year, it would take 26 years before every property in the country had changed hands.
"...and the equivalent of the average home changing hands just once every 26 years."
Anyone care to explain this one to me, please?
From the horse's mouth:
For the last decade Hometrack has published a monthly house price survey. A sentiment survey not an index, it takes into account local market conditions with responses from over 5,000 agents and surveyors each month.
So if it's not seasonally adjusted, then it's up to the agents (& surveyors) to take that into consideration when they give their answers...
; )
@Paul on 2011-11-28 14:14:41
Good point.
Hi Jonnie
No, not a new way, just the time honoured method of valuing an investment. Inflation is crucial.
If my dear old Granny had buried £10k (equivalent to £250k today using RPI) in her garden in 1950 and pulled it out today expecting to live a comfortable retirement then she'd have a bit of a problem. No amount of her pleading "but it's still worth £10k" would help.
Assuming RPI stays at around 5%, in your example the place would have fallen more like 75% in real terms.
@2011-11-28 13:29:22
What on earth are you trying to say?
I was replying to Phil S and regarding his comment if interest rates returning to 'normal'
Hometrack are obviously not estate agents and they are not taking seasonal changes into consideration.
I have been doing this job for more years than I care to remember (I am an old fart you see) and business is centered around January 1st to the 30th June. Then holidays are more important as who will spend a grand on solicitors and survey fees when they could put this to the holiday booze fund.
They then come back from holiday and either part company or move house. Either way its good for business.
NOW we are in a recession and I am afraid that Christmas has come early this year. Money is tight and there is uncertainty in employment and hence the slowdown which has ALLWAYS happened just prior to the festive season has arrived early.
This bunch just do not understand agency work they are statisticians and statistics as veryone knows can prove anything they want them to.
Back to work lads and make some money.
@Johnson
Hi and welcome to EAT.
Now you might be able to help me on something – it’s the new trend of inserting ‘real terms’ my old mate Rantnrave has been doing a bit of this and im wondering if some of you have redefined average house price drops and started chucking inflation in to the sums?
In old money if a property is ‘worth’ say £300,000 in 2011 then in 2016 is ‘worth’ £150,000 then that would be a 50% drop but have you created a new way of looking at this?
Jonnie
@Ray Evans
"Could apply to some.......but when peiople bought some (say) five plus years ago interest rates WERE higher - so no change there then?"
Pretty desperate comment - have you not noticed that the financial climate has changed somewhat in the last 5-6 years?? There is a now a global financial meltdown worsening by the day!!
@Monkey Tennis
In 2012 we will all be dead with the Mayan Calender, why worry about house prices?
So we can expect a gradual tightening on estate agents as transaction levels for 2012 are likely to be even less than 2011 and Rightmove & PrimeZooplaproperty ratchet up there costs another notch.
@Anonymous
I've been hearing that nonsense for about 4 years now. It's the EA mating call. They'll still be saying it in another 4 years when prices will be down 50% from peak in real terms.
Lets all rant and post about prices too high blah blah blah, so its got nothing to do with world uncertainty then? And thats still 800,000 still moving. Just a bit of confidence and the pent up desire to improve and move will soon return.
@Puzzled of Tunbridge Wells.
Just thoughts........
Cars drop in value immediately - banks still lend.
".......that 80% of young people do not earn enough money..." Still leaves 20%! ;>).
Ray Evans: 'Current home owners can just 'nest' and wait.'
How many will be in trouble if interest rates go up. I know a number of young people (well, young to me - in their late 30s and 40s) who are out on a limb financially speaking. They have bought over the last 10 years or so and have what I think of as 'mega' mortgages - up to 200k or so - on relatively modest salaries. Despite being in good jobs holidays tend to be camping in the UK and houses they live in are modest - or shared equity.
I'd say there are many millions who will be in trouble if interest rates go back up to their 'normal' levels.
And how long can interest rates be kept low? I've lost patience and moved some money to my sister in law in Australia where I am now getting over 6%. If everyone in the UK decided to do the same thing, interest rates would have to be jacked up pronto.
WOW have you seen the latest fig's from the LR?
CRASHY CRASHY
@Phil S
Could apply to some.......but when peiople bought some (say) five plus years ago interest rates WERE higher - so no change there then?
donnie: 'Prices need to drop at least another 10% poss 15% for property to become affordable.'
At what interest rates? Today's? How far would they have to drop if bank base rate went back up to its long term average of 5% with mortgage rates of 7% - 8%?
How far would they have to drop then for property to become affordable?
Maybe you think people will be happy forever getting 2% in the bank? I don't think they will. Over the next few years we will see the emergence of savings managers (bit like fund managers) who will move your money around the world for you - with insurance backed guarantees in place - chasing the highest interest rates.
Someone who did not enter a name of any sort said: "Why do people keep saying "prices are too high" for first time buyers. That isn't the case. The case is you can't afford what you want. That doesn't make it overpriced."
Ahhh, you have to smile. Let's say, for the sake of discussion, that 80% of young people do not earn enough money to ever be able to afford the house their parents brought them up in.
They are already close to their maximum earning power - they'll certainly hit that by the time they are 40. But, guess what, FTBs these days are 40 years old on average. So, how much time do they have to move up the ladder and buy the houses the baby boomers will want to sell when they retired and downsize - or die?
What happens when - next year, in 5 years .. in 10 years ... in 20 years - all the expensive houses belonging to the baby boomer generation come on the market.
Yes, you are right. Gradually the prices will come down to the level that the following generation can afford. And, when banks finally twig that there is no dodging this - and that falls of 2% to 5% a year are going to go on for years and years - they will be even more reluctant to lend - as so much of their lending will be secured against assets that - drip, drip, drip - are falling in price.
Following the credit boom and credit crunch, we haven't had a house price crash - because governments stepped in because simply too much money had been lent into the market and a crash would have taken the economy with it. So, what we have instead is a house price correction. Same initials, HPC, but taking 10 to 20 years instead of 2 years. And with a devastating effect on the economy for a long time.
@Ray Evans
"New listings down = less owners listing?
I wonder why? Could it be that many owners, having worked and saved to buy at a certain price and are not forced to move are indicating...'I will not have new buyers benifit excessivley at my expense - because the 'problems' they may have are not of my making - I will stick'. "
"Current home owners can just 'nest' and wait."
When interest rates rise to the levels they ought to be at, the game will change and plenty of homeowners will not be able to 'stick'.
Latest Land Reg data out today backs up the trend Hometrack suggests. Down 0.9% monthy and minus 3.2% annually. At £159,999 The average UK house price they quote is below £160K for the first time in two years.
Link to the full report:
http://www1.landregistry.gov.uk/upload/documents/HPI_Report_Oct_11_tr7lk6.pdf
@Anonymous
Who said anything about 10%? Take a look over the Irish Sea or a bit further to the US, I'm hoping for 30 or 40%. Yum yum. Merry Xmas FTB's.
No matter that I paid WAAAY over the odds, there is nothing to worry about. House prices cannot and will not fall. It is impossible. It has never happened in the past either here or abroad and will not in the future. Inflation means nothing. Wibble. Wibble. Wonk.
Why do people keep saying "prices are too high" for first time buyers. That isn't the case. The case is you can't afford what you want. That doesn't make it overpriced.
Just becasue you want a nice three bed detached with a South facing garden and it's more than you can afford, doesn't mean it's overpriced. There are plenty of properties in my area that are affordable. Two of my friends are both under 24 and they have both just bought properties. Neither of them were "cheap" but they wanted a house and could afford the mortgage, so they bought.
How would a 10% reduction make any difference? It would mean you have to save £2- £3,000 les for your deposit. Is that really going to make a massive difference? No.
@Tony.
Good points!
As said many times - A shortage of new builds means that Supply & Demand will eventually kick in and prices will stabilise and gradually rise again. When is the guess..
Current home owners can just 'nest' and wait.
Prices need to drop at least another 10% poss 15% for property to become affordable.
To FTB
Real first time buyers are more intelligent than to make comments such as yours....no one is asking you to buy a property...If ,as you suggest, prices are too high wait until they come down a bit more.....There you have got a response that you wanted......although we all know you are an agent rather than a serious first time buyer.
A view.........................
New listings down = less owners listing?
I wonder why? Could it be that many owners, having worked and saved to buy at a certain price and are not forced to move are indicating...'I will not have new buyers benifit excessivley at my expense - because the 'problems' they may have are not of my making - I will stick'.
P.S. Agents are not owed a living
A Taylor Wimpey new-build site near me has stopped building and laid most of the workers off, and will only build a house if someone agrees to buy off-plan. No doubt buyers feel the new houses are too expensive. Why are they expensive? Because government keeps adding more "green" costs to new-builds, but requires no energy efficiency measures from second-hand houses, and because it burdens builders with S106 infrastructure costs and makes them give away 40% of their houses as "affordable" homes to housing associations.
Unsurprisingly the number of affordable homes being built is collapsing. What is the point of making buidlers and new buyers pay for affordable homes if the costs make the private houses unaffordable?
Prices down, new listings down, volume of transactions down.
Imagine that. :)
Falling prices lead to lower supply and lower transactions.
As has been noted on here many times before.
I have a deposit saved over the last 4 years, mortgage apparently easy to get and a desire to buy a house.
But I can't see it happening for a while. Why?
Because greedy agents and vendors are asking for ridiculous prices.
Seems that vendors who overpaid during the boom want me to bail them out and most EA's are up to their necks in BTL and bricking it at falling prices/unemployed tenants.
I think its quite obvious that transaction levels are so low because prices are still far too high!
The average occupancy between mortgages was 7 years in 1988 so anything is possible.
26 years does seem a bit high though 20 would not surprise me.
That 'once in 26 years' stat is incredible if true.
Lots of us are priced out anyway, the rest who can afford to buy don't want to with falling prices and the economy.
The cost for everything is going up fast as well as job uncertainty.