severnside gull
Well-known member
my pleasure
the market will doubtless have slipped further by then but I bet it still won't have crashed
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House prices to crash
- Thread starter Uncle C
- Start date
my pleasure
the market will doubtless have slipped further by then but I bet it still won't have crashed
jezzer
Active member
The market is stuck in a cul-de-sac, with people who would have moved on to a better home staying where they are for 2 main reasons, Firstly, their wages arent going up as in previous years and secondly most these houses have been purchased with decent 6 figure mortgages 150-180k+ or so, therefore they cant afford to drop their price even if they were willing to too much and therefore they decide not to move.
Therefore there is a lack of supply versus demand, therefore the prices more or less stagnate. This state will go on for a decade or more in my opinion, due to the austerity measures and the reasons given above, crash?? Cant happen if people dont/cant move house, especially as the potential buyers cant get a mortgage aswell!!
Therefore there is a lack of supply versus demand, therefore the prices more or less stagnate. This state will go on for a decade or more in my opinion, due to the austerity measures and the reasons given above, crash?? Cant happen if people dont/cant move house, especially as the potential buyers cant get a mortgage aswell!!
Uncle Spielberg
Well-known member
I expect house prices to edge down this year but no more than 5-10%. I do not expect a crash. The main reason for this is lenders still resolutely refuse to lend any money. In 2007 mortgage lending was £ 366 billion. In 2010 it was £ 137 billion and expectations this year are the lowest ever mortgage lending since records began of £ 130 billion.
A normal , functioning mortgage and property market needs around £ 200-£ 250 billion per annum. It is the oil that lubricates the Machine. Without the oil the engine seizes up which is what has happened. The mortgage and therefore property market is busted. More so the mortgage market as the property market can still continue with cash buyers and buy to let investors and that is where the sales will come from this year. Cash rich people where the savings rates are so poor and buy to let landlords building up portfolio's as first time buyers can't buy as there are no mortgages and therefore first time sellers can't move. FTB's are now First Time Renters with 5 people chasing one property. This also means landlords can drive up rents.
I am going to concentrate on buy to let as the residential mortgage market will be dead and the re mortgage market has been dead for 2 years with the BBR at 0.5%. This in itself is a major problem as many millions of people are now used to an unrealistic interest rate on their mortgage and all the extra money has been spent to adjust their lifestyle and when rates go up they will not have the slack as they think BBR will stay at 0.5% forever and will not move to a fixed rate of under 3% for 2 years as they perceive this as expensive. These people are in for a major shock. I predict interest rates will go up for the first time in March. Good luck people. I think we will need it.
A normal , functioning mortgage and property market needs around £ 200-£ 250 billion per annum. It is the oil that lubricates the Machine. Without the oil the engine seizes up which is what has happened. The mortgage and therefore property market is busted. More so the mortgage market as the property market can still continue with cash buyers and buy to let investors and that is where the sales will come from this year. Cash rich people where the savings rates are so poor and buy to let landlords building up portfolio's as first time buyers can't buy as there are no mortgages and therefore first time sellers can't move. FTB's are now First Time Renters with 5 people chasing one property. This also means landlords can drive up rents.
I am going to concentrate on buy to let as the residential mortgage market will be dead and the re mortgage market has been dead for 2 years with the BBR at 0.5%. This in itself is a major problem as many millions of people are now used to an unrealistic interest rate on their mortgage and all the extra money has been spent to adjust their lifestyle and when rates go up they will not have the slack as they think BBR will stay at 0.5% forever and will not move to a fixed rate of under 3% for 2 years as they perceive this as expensive. These people are in for a major shock. I predict interest rates will go up for the first time in March. Good luck people. I think we will need it.
Last edited:
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 36,016
what was the 2007 and 2010 mortgage lending stripping out re-mortgages and equity release? because i read somewhere that with this discounted, the lending is actually only down a fraction. i.e. the lending market was over blown with people cashing in on price rises.
Uncle Spielberg
Well-known member
Not sure but net lending in 2010 was about £ 6 billion and could go into negative net lending in 2011, ie more being repaid on mortgages than new lending being lent, for the first time ever. Property transactions are around a half of pre 2008.
Uncle Spielberg
Well-known member
The average rate homeowners would be prepared to fix at is now just 3.3%, dropping from 4% in January 2009, research from unbiased.com shows.
But best buys for three-year fixed rate deals are currently around 5.1% – nearly 2% more than the average homeowner is currently willing to pay.
Fixed rate mortgage deals reached around 7.8% at the end of 2007 therefore the current average fixed rate deal of 5% appears to be a long-term ‘good’ deal when considering economic predictions stating that interest rates will rise.
Just 16% of homeowners would only be happy with a fixed rate deal of 2% or less for the next three years.
Describing their current mortgage situation, 31% of all homeowners state they are on their lender’s SVR mortgage and have no plans to change.
This has increased from 26% in January 2009.
Only 22% of homeowners have just tied into another fixed rate deal after their previous fixed rate ended, instead of automatically moving onto their lender’s SVR.
Similarly, just a quarter of those currently on a fixed rate mortgage who are coming to the end of their deal will move onto a new deal as soon as this one ends – instead of moving onto their lender’s SVR.
Karen Barrett, Chief Executive of unbiased.com, says the ideas of what is a reasonable fixed rate mortgage have become distorted and borrowers must be realistic.
She says: “Homeowners need to be alert to ensure they don’t miss out on getting the best deals before it’s too late.
“It can be very confusing for homeowners to keep track of which is the best mortgage for them and when is the best time for them to move onto a new deal.
“Homeowners should seek whole of market mortgage advice to ensure they get the best deal from the whole of the market at the right time.”
But best buys for three-year fixed rate deals are currently around 5.1% – nearly 2% more than the average homeowner is currently willing to pay.
Fixed rate mortgage deals reached around 7.8% at the end of 2007 therefore the current average fixed rate deal of 5% appears to be a long-term ‘good’ deal when considering economic predictions stating that interest rates will rise.
Just 16% of homeowners would only be happy with a fixed rate deal of 2% or less for the next three years.
Describing their current mortgage situation, 31% of all homeowners state they are on their lender’s SVR mortgage and have no plans to change.
This has increased from 26% in January 2009.
Only 22% of homeowners have just tied into another fixed rate deal after their previous fixed rate ended, instead of automatically moving onto their lender’s SVR.
Similarly, just a quarter of those currently on a fixed rate mortgage who are coming to the end of their deal will move onto a new deal as soon as this one ends – instead of moving onto their lender’s SVR.
Karen Barrett, Chief Executive of unbiased.com, says the ideas of what is a reasonable fixed rate mortgage have become distorted and borrowers must be realistic.
She says: “Homeowners need to be alert to ensure they don’t miss out on getting the best deals before it’s too late.
“It can be very confusing for homeowners to keep track of which is the best mortgage for them and when is the best time for them to move onto a new deal.
“Homeowners should seek whole of market mortgage advice to ensure they get the best deal from the whole of the market at the right time.”
Uncle Spielberg
Well-known member
Recent increases in swap rates are starting to force up the price of fixed rate mortgages, say industry experts.
Since November 2010, two-year swap rates have increased from 1.31% to 1.72% and five-year swaps have gone from 2.18% to 2.82% in the same period.
Last week two-year swap rates were 1.62% and five-year swaps 2.75%.
David Hollingworth, director of communications at London & Country, says: “Swap rates have fluctuated over the last two years, but of late they have been on an upward trend.
“We have already seen evidence of lenders increasing their fixed rate mortgages because of swap rates and the sharper fixed deals are under threat.”
But Hollingworth adds that although swap rates play a part in lenders’ pricing they also look at other factors when setting fixed rates.
Alan Cleary, managing director of Precise Mortgages, says two-year swap rates have risen substantially in the past few months as a rise in the base rate looks more likely.
He says: “We are getting closer to a rate rise with every base rate decision and this is starting to affect the price of swap rates.
“Fixed rates, especially two-year rates, are on their way up and borrowers should look to fix now.”
Industry consultant Mehrdad Yousefi says high inflation is worrying the money markets and pushing up swap rates.
But he says: “Over the next four weeks fixed rate deals will cost more but it remains to be seen whether this will continue throughout the year.
“In the second half of the year when the base rate starts to rise, swap rates will start to predict the next base rate could start to rise and products will certainly become more expensive.”
Halifax raised the rates on its two-year fixes by 0.2% today and blamed the increased cost of funding and swap markets.
Since November 2010, two-year swap rates have increased from 1.31% to 1.72% and five-year swaps have gone from 2.18% to 2.82% in the same period.
Last week two-year swap rates were 1.62% and five-year swaps 2.75%.
David Hollingworth, director of communications at London & Country, says: “Swap rates have fluctuated over the last two years, but of late they have been on an upward trend.
“We have already seen evidence of lenders increasing their fixed rate mortgages because of swap rates and the sharper fixed deals are under threat.”
But Hollingworth adds that although swap rates play a part in lenders’ pricing they also look at other factors when setting fixed rates.
Alan Cleary, managing director of Precise Mortgages, says two-year swap rates have risen substantially in the past few months as a rise in the base rate looks more likely.
He says: “We are getting closer to a rate rise with every base rate decision and this is starting to affect the price of swap rates.
“Fixed rates, especially two-year rates, are on their way up and borrowers should look to fix now.”
Industry consultant Mehrdad Yousefi says high inflation is worrying the money markets and pushing up swap rates.
But he says: “Over the next four weeks fixed rate deals will cost more but it remains to be seen whether this will continue throughout the year.
“In the second half of the year when the base rate starts to rise, swap rates will start to predict the next base rate could start to rise and products will certainly become more expensive.”
Halifax raised the rates on its two-year fixes by 0.2% today and blamed the increased cost of funding and swap markets.
Can I get this right, house prices go down, you are correct, house prices go up, it's a blip?
Uncle Spielberg
Well-known member
Barretts have just done a scheme where first time buyers parents can get a loan of up to £ 50k at 5.4% for their children's deposit and the first time buyer gets an 80% mortgage.
Uncle Spielberg
Well-known member
" Just 16% of homeowners would only be happy with a fixed rate deal of 2% or less for the next three years. "
Earth calling. Is there anyone in ?.
Earth calling. Is there anyone in ?.
severnside gull
Well-known member
welcome back Uncle S
Nice to see you active again
Nice to see you active again
Uncle Spielberg
Well-known member
Still punching on mate.
Uncle C
Well-known member
- Thread starter
- #734
This is completely fictitious - its like holding shares and saying they cant drop in price if I don't sell them. It may only apply if nobody sells.
Some houses will have to sell because of divorces, death, job moves, redundancies, immigration etc etc.
It takes just one house in a street to set the level for that street and just a few houses in a district to set the level for that district. Neither the Government nor the individual will have any control over it.
As for lack of mortgages, when house prices are restored to historical levels (rather than a bubble) then mortgages will once again be achievable. The banks have a pretty good idea that the market is going down, thats why many want as much as 40% deposit and why their risk is reflected in mortgage rates many multiples of the base rate. Think that sends out a pretty clear message.
Uncle Spielberg
Well-known member
Thats rubbish. Lenders wanted 40% in 2008 and 2009 in a rising market when prices went up 15%.
Uncle Spielberg
Well-known member
The only message it sends out is they are greedy fuckers who want a massive profit margin to help balance their books from all the billions they spunked away on the USA sub prime market.
Mr Burns
New member
I'd be f***ing delighted with that!! I got a interest only mortgage at around 3.2% last year fixed for 2 years last summer, and I was over the moon with it. In fact I'd probably be delighted with 5-6% if I could fixed it long enough.
Don't agree with rater going up in March though. I think it'll be in the last quarter of 2011 if we see any moment, and thats a big if in my humble opinion.
Stumpy Tim
Well-known member
Australia? House prices are still rising here