Housing Market

[macroban]

No, it could mean the tenants might be evicted at short notice. [Note the two conditionals]

[karter]

ibilly says I predict East Dulwich prices in 2012 to be at least 40% down from their peak of 2007.

I think way before 2012, ibilly.

[ibilly99]

The Bears come out to play !

Seriously nobody knows how this will play out - we haven't been here before in this position - but if you look at the debt mountain from the World CIA Factbook - we're second to the US that's 10 trillion dollars compared to the US with 12 and our population is only 1/5 of the US.We are the most indebted nation in the world per capita and our leaders are deceieving us because they only think short term - winning the next election - we've been had - there was no new paradigm just a house of cards built on credit.

As it says in the Bible - the wise man built his house upon rock.

Countries for which no information is available are not included in this list.

Rank Country Debt - external Date of Information

1 World $ 54,310,000,000,000 2004 est.

2 United States $ 12,250,000,000,000 30 June 2007

3 United Kingdom $ 10,450,000,000,000 30 June 2007

4 Germany $ 4,489,000,000,000 30 June 2007

5 France $ 4,396,000,000,000 30 June 2007

Rents - hmm don't know about that if reverse immigartion takes place as our economy goes into a downturn then it should be a renters market I would have thought.

[karter]

ibilly, i am not being bearish, just looks the way the market is going.

[celineblondon]

"No, it could mean the tenants might be evicted at short notice. [Note the two conditionals]"

But surely if more people get evicted, everybody will look to rent and the prices for renting will go up...

[ibilly99]

If we lived in a just society where renting is the new norm then tenants ought to have a lot more rights than they currently have.Having some security about where you live ought to the the bedrock of a fair and just society.Governments should control the market.I say this as an owner occupier who appreciates the stabilty and underpinning of my life that owing my house have given me - but when I bought the banks and buidling societies ensured careful and rational judgements were made on the biggest financial puchase most people would ever make.You needed a big deposit (10%) and there weren't insane multiple of incomes which helped to ensure somewhat that the market was more balanced.

High house prices benefit no one in fact they act in reverse - they focus a society on creating empty value rather than promoting true economic activity such as making real things that we need and require.The Kirsty Allsops and all the property /porn' TV programmes out there have contributed to this current mindless mindset.

All these very clever and highly paid people in the City who have got us into this mess could have been working in the real economy discovering things like a cure for cancer,or becoming doctors and engineers instead they were bribed/corrupted into using their undoubted talents and intelligence into creating incredibly complex instruments of financial mass destruction which is where we are now at.

The people who really matter are the nurses and doctors who nurse your ill mother back to health,the men who empty our bins,or drive the buses that get us to work - the people who make the world a better place and for their sins they are paid relatively peanuts and have no hope at current prices of owning a place to live.

I hesitated posting my views on local forum but if I help to inform rational judgements and prevent one person from making an irrational decision of buying into this market then I will consider that a post worthwhile.

[darcy]

For real evidence of how people are dropping their prices in ED look at Property Snake website - many down 20-30%. With such high prices they have further to fall.

[ibilly99]

The height of the madness was Xmas to June last year the price of a 3 bed Victorian terrace went 420,500 with my neighbours house going for 600k in June - this led to sellers continuing to push the ceiling ever higher.

Same thing happened during the dot com bust of 2001 which I knew was crazy when every man and his dog had a idea of a website that would make their fortune. A landlord of my acquinatance persuaded his mum to by CISCO shares.She subssequently lost 70k in the bust.A saying from the Great Depression was when the shoeshine boy gives you stock tips time to bail out.

A`lot of this was fuelled by city bonuses looking for a home for their money.Feels like another era now - why did we all become bonkers about property ? My brother was in buy-to-let and had a great run from 2001 - he cashed out last Xmas rightly fearful.The Foxtons owner cashed out in June 2007 - as much as I hate them have to say he called the top perfectly.How many sharp haircuts and spiv patter does a empty shop need?

A rising market rightly climbs a wall of worry.If you want to know what is really going on google Peter Schiff,Roubini,Itulip for starters - the money-printing presses of American federal reserve are running red hot at the moment which is why the dollar is tanking and we're all paying more for our neccesities and why the world's financial ministers keep meeting in a huddle.The light at the end of the tunnel is the oncoming train !

[benmorg]

MrBen Wrote:

-------------------------------------------------------

> We all know you can make statistics say anything.

> But generalised statements such as "london prices

> fell 29%" don't mean much unless you relate it to

> locality and time.

am attaching a map showing how London house prices fell during the last crash, between 1988-1995. East Dulwich is in the danger zone. The map makes it clear that London was hit very hard in the last crash, with only the most expensive houses and locations holding their value. Anything that might have sold to a first-time buyer was well and truly clobbered.

> Victorian stock, good schools and organic butchers

> will prevent a 30% slide in East Dulwich and my

> estimate is up to 15% off last summers highs

> before we regain some stability in a year or two.

Estate agents tell me that East Dulwich is already 10-13% off last summer's peak, so we'd need stability very soon if your prediction isn't going to be an underestimate. But I think it's unlikely the property market will rebound or stabilize at any point in 2008.

> Gordon Clown will get back into my good books if

> he can actually breathe some life back into the

> mortgage market as that would be a massive help.

But a massive help for who? Estate agents? Certainly not for first time buyers. Most people in the UK, including existing home-owners, would actually benefit from a modest fall in house prices. It would getting on the ladder easier and would also make moving up the ladder easier. Unlike the crash in the early 90s, which was accompanied by rocketing interest rates that made mortgages absurdly expensive, the current crash could proceed quite painlessly if interest rates are kept low. I don't think we're heading for armageddon, even if house prices do fall by a significant whack.

[MrBen]

macroban Wrote:

-------------------------------------------------------

> > Victorian stock, good schools and organic

> butchers will prevent a 30% slide in East Dulwich

> and my estimate is up to 15% off last summers

> highs before we regain some stability in a year or

> two.

>

> Estimate based on which data, or is this a guess,

> or a joke?

It was a joke and a guess Macroban. The end bit sounding a bit like the weedgie lady from Bushells....

Can you imagine the headline in the Southwark News: WILLIAM ROSE STAVES OFF GLOBAL RECESSION WITH ORGANIC SAUSAGE

But uk prop 40% lower than now in 2012 and china ruling the world iBilly? Dream on!

I'm an optimist and a lot of good will come from the downturn. You need a forest fire to spark the green shoots of recovery.

As for local impact, nobody enjoys seeing a good business go under but if some have to fall then I wish it on the gift shops rather than something useful that I need (like the beef at the butcher).

In a recession I still like a nice joint on a Sunday.

[ibilly99]

Not China ruling the world but the continuation of a process that is now evidently apparent. Look at the debt figures I posted before - common sense - tells us that this is not sustainable- the boom has blown up and we are in the early stages of a transformational change. All empires rise and fall and every dog has it's day. Tony Blair said in the recent Blair years what I what to get across to the British people is the speed of change and how we must adapt to this what he meant was the old rules have changed we live in a globalised world. I work with a number of mainland Chinese students and I can?t believe at how focused and hard working they are ? it?s almost inhuman and they don?t seem to know the meaning of a work-life balance ? you just can?t compete with them on a level playing field.

I am not a supporter of globalisation because it ultimately means a levelling down of the world and lack of local control? Asia rises and we fall ? already most manufactured good come from over there ? with the money they make on these exports coming back to our banking system to be speculated in the fashion we have just seen resulting in the biggest asset inflation in history.And they have lost BIG in the credit crunch ? how would you feel if you had worked hard, created wealth to see it trashed by a declining dollar which is the way the US tries to obviate it?s responsibilities as a reserve currency. Well its not working there?s the alternative now of the Euro ? they have choices.

Our financial system was supposed to be the magic genie that kept us afloat and paid the UK?s post-industrial bills. The cash rich nations now are Asia and the Middle East and they have already been burned by the collapse of the dollar and the value of their western investments so this money is now flowing east not here. It will be interesting to see how many banks follow RBS with rights issues and how angry shareholders will be at seeing their investments tank and how many of those investors will sit on their hands.

Well the future lies in hard work, inventiness and facing reality. Our housing boom has done nothing to contribute to thta except shuffled deckchairs on the Titanic. The prices we see in the estate agents are all pretty much fantasy at the moment. If you want any chance of selling you need to lead the pack with steep price reductions. Doesn't the auction price of 155,000 next to the Texaco say something?

I bought my house for 80,000 in 1983 and when it got to 169,000 in 2001 it felt overpriced then as for 600k at the top this is absolute madness. I feel for young people and first time buyers believe me they are angry at being priced out as baby boomers have lauded their 'wealth' and the value of their houses, and TV property programmes and glossy supplements have just added to their sense of injustice. I would be priced out on my salary now as would most of the home owners out there.

There will not be a return to the cheap credit boom for maybe a generation till banks and society forget the pain that this is causing and will be causing - ergo the market is unsupported so as I say 40% seems firmly conservative.

My parents had the view safe as houses how true is that now? When I left university I had no debt, jobs were fairly easy to come by and property was relatively affordable. We need to return to a more balanced and fairer society and if a price crash can hasten this on then so be it. I am neither an optimist nor a pessimist ? just a realist I hope.

[demery]

If you want to track changes in the asking prices across the uk, you can use http://www.propertysnake.co.uk/

If you want to track achieved prices, there's lots of websites where you can obtain UK Land registry information.

Both are vital for anyone wishing to sell or buy.

FYI The figures on propertysnake for se22 make for interesting reading. Stuff that's been on the market for a long time (upto a year) has been savagely reduced, by up to 30%. Recently marketed properties seem to have been reduced less and suggest more realistic asking prices.

As to what will happen, that's anyone's guess. Those hoping for a severe crash have short memories. Some people lost everything in the early 90's and many lives were destroyed. I for one wouldn't wish that on anyone.

Yes it's tough for first timers, but most those who have entered the market in last couple of years have often had to stretch themselves. I'd imagine most of them are not city fat cat, red brace wearing, hooray henry millionaires. Most would be hard working, young middle classed people, looking to start a family in the area. I'd wager a few even buy the Guardian. :-)

[macroban]

We're still some way off the baseline price of ?120k-?150k for an East Dulwich two bedroom plus box-room terrace.

[Andyng]

ibilly99 Wrote:

-------------------------------------------------------

> Gordon?s Brown?s No More Boom and Bust (in a dour

> Scots accent) is SPECTACUARLY falling apart. This

> chapter of the cheap credit fuelled asset binge of

> the last decade is now unravelling; we won't be

> going back to 'normal? for along time yet if ever

> for our society. House prices have departed a long

> way from fundamentals and the well overdue

> correction is upon us. George Soros one of the

> most successful investors in history says this is

> the worst financial crisis since the Great

> Depression and sub prime is only the first

> wave.Alt A mortgages are the next shoe to drop and

> they are about twice as big as sub-prime (type in

> ALT A in you tube for video) and that?s not to

> mention record commodity prices and the coming

> bond crisis so the financial situation is going to

> worsen and deepen.

>

> What are the factors that will be driving house

> prices?

>

> 1. City job losses could be as high as 40,000 - a

> lot of bonus money has been coming this way which

> will significantly reduce hard cash coming into

> the area.

> 2. First timers both priced out and unable to

> borrow same multiples as before.

> 3. Sentiment seriously turned - mantra of prices

> can only go up turning sour ? why buy now when

> prices will be cheaper by waiting?

> 4. A property developer builder friend of mine

> getting seriously worried. There are just no

> buyers out there and he is highly leveraged - or

> where there are the chains are breaking down as

> mortgage deals break downs, buyers get cold feet

> or gazunder. If you are selling get your prices at

> the head of the queue - he who panics first at

> least get some of their money back

> 5. Disposable income getting hit on fuel, energy

> food.

> 6. Mass Eastern Europe immigration reversing as

> salaries ,optimism and their currencies improve

> in their home counties and they pack their bags

> and go home to seek their fortune thus reducing

> demand for the buy-to-let landlords who serviced

> their needs.

>

> As for counter arguments there is nothing like the

> deluded optimism of the seriously invested ? as

> they say you don?t ask a barber if you need a

> haircut!

>

>

> So what does all this mean for East Dulwich

> prices?

>

> I've lived in East Dulwich for 20 years now and my

> house at the peak (which was last May) was around

> 600k - which is absolutely ridiculous - houses

> should be for living in and not an investment. In

> my heart I feel it should only be worth half of

> that and resent the inflation and obsession with

> empty speculation that has rotted our society for

> the last decade. As an economy we are increasingly

> dependant on the Financials, Insurance, Real

> Estate and service economy. They should be

> servicing the real economy not be massive casino

> for speculators. I've lived and worked in Asia

> and once you've seen how hard and diligently they

> work and save, the strengths of their families and

> schools it?s no wonder they are winning. Whilst

> China and India roars we've been running a pyramid

> scheme a ponzi scheme of debt. I do feel sorry for

> all those that have bought in the last few years -

> you have bought into a highly inflated market -

> the biggest bubble in history and where was our

> prudent Gordon Brown steadfastly on watch to look

> after his people?

>

> I have friends in the Hedge Fund business and they

> love this deluded optimism as they short the

> markets and whilst optimism remains they have a

> window to build positions which benefit from a

> fall. Things are really scary out there.

>

> Conclusion

>

> Governments are scared the banks are basically

> bust and we could be heading for Great Depression

> 2.0 .Prices will drop significantly over the next

> few tears as global adjustment means wealth and

> power move over to Asia. I predict East Dulwich

> prices in 2012 to be at least 40% down from their

> peak of 2007.

Based on what facts?I very much doubt this drop considering

the olympics will be in london.[/bIf you lived in dalston

in 2012 with a new tube station are prices going to drop 40%?

I saved up bought my first property aged 25 by saving every penny I had.

If you have descent deposit and a job you will get a mortgage no problems.

Why wait to see what happens to the market .Its people who want 100% - 125%

mortgages that are most at risk of getting into negative equity.If you start

waiting two years thats 2 years of rent money down the drain.Typical 1 bed flat rent

?900 approx x 24 months equals ?21k .

Why is a drop in house price beneficial to a home owner when he can see his equity

increase all the time ,meaning larger deposit for next puchase.

[karter]

Andy, what if house prices plummet though? It could prove wise to wait just a little.

[Andyng]

Yes but if everyone waits by the time you commit them

everyone will commit and supply will drive up.

Once the govt starts pumping money to banks mortgage should be easier

to get get hold of.Also a few drop in interest rates should create

a bit more demand.Wait by all means but will expecting a drop

,waiting till 2012 and paying 4 years of money down the drain

rent is financial suicide.

[benmorg]

Andyng Wrote:

-------------------------------------------------------

> Yes but if everyone waits by the time you commit

> them

> everyone will commit and supply will drive up.

>

> Once the govt starts pumping money to banks

> mortgage should be easier

> to get get hold of.Also a few drop in interest

> rates should create

> a bit more demand.Wait by all means but will

> expecting a drop

> ,waiting till 2012 and paying 4 years of money

> down the drain

> rent is financial suicide.

you say rent is money down the drain, but so is the interest paid on a mortgage. If you take out a large mortage, you are effectively renting the money to buy the house. Over the lifetime of the mortgage, you pay for a house twice over. For an average east dulwich house, that means you'll fork out more than a million.

Doing this is utter madness right at the end of a boom, when prices are unlikely to climb again for years. If you have enough cash to buy a house outright, it might make more financial sense than renting and leaving the money to stagnate in a savings account, but to buy a house with a large mortgage at moment amounts to spending ?1 million on a noose.

[JimSmith]

Andy Ng,

I'll explain the drop in houseprices being beneficial to a homeowner. You are right extra equity in the home means a larger deposit for the next purchase. However if you want to trade up say for example from a 200k flat to a 400k house and prices rise by 20% you will have made 40k of equity but the house will now be 80k more expensive i.e. you are 40k + the cost of borrowing that 40k worse off. Of course the situation is reversed if you are trading down.

I'm not as pessimistic as iBilly on the prospects of the UK economy generally but I do feel that a house price correction is inevitable, two things indicate this firstly the cost of buying and renting are seriously out of line traditionally you paid a premium to rent for the freedom and maintenance issues at the present time renting is considerably cheaper than buying on an interest only basis for most properties. Secondly prices have been inflated through easy credit 100+% mortagages and BTL mortgages at only 80% LTV this looks like it has come to an end.

[Andyng]

I think waiting on the market is risky business a friend of mine

was trying to buy a flat 2 years ago he waited and waited now the

flat he wanted is 50k more and he is now priced out.Everyones

saying they'll wait.

If everyone waits and they decide to buy at the same time

there will be more demand equaling higher prices.

The 2012 olympics ,the govt chucking money to bank

More Interest rate cuts

"you say rent is money down the drain, but so is the interest paid on a mortgage. If you take out a large mortage, you are effectively renting the money to buy the house. Over the lifetime of the mortgage, you pay for a house twice over. For an average east dulwich house, that means you'll fork out more than a million.

All this pessimissm is a chain reaction from the media and estate agents.Eg scenes of queus outside northern rock.

If you were a customer of northern rock and sawa queu outisde your bank wouldn't you que uop too.

Also estate agents are taking longer to sell and get there commission so they are telling people to

drop.They don't care what a vendor sell for there just after there commision.

Yes a mortgage is like paying rent on a house over a long period.But you get a house out of it.

What do you get from renting ?Landlords will charge pretty much anything and have no probs

getting tenants because people have no choice and cannot afford a property,and have to pay for

relocation costs every 6 months when tenancy runs out or rent goes up.

Not many people buy outright and have ?250 spare cash.If they did they;ll use that s deposit for a ?600k

property.

Shortage of affordable housing

Dont think prices will spiral downwards in a huge way,although

they may be stagnant.

Also is it better to mortgage then

[macroban]

Andyng, are you a buy-to-let person trying to sell?

[benmorg]

Andyng Wrote:

-------------------------------------------------------

> I think waiting on the market is risky business a

> friend of mine

> was trying to buy a flat 2 years ago he waited and

> waited now the

> flat he wanted is 50k more and he is now priced

> out.Everyones

> saying they'll wait.

he was priced out becuase the boom hadn't run it's course. Now the boom is definitely over. House prices are falling in US, Ireland, Spain, Denmark, New Zealand, France. Do you think the UK will be the only country where house prices keep going up and the credit boom carries on?

> If everyone waits and they decide to buy at the

> same time

> there will be more demand equaling higher prices.

the trick is to buy before everyone else. But look at graphs of house prices during the last crash from 1988-1995. It took 3 or 4 years for prices to stop falling. This time round the falls are happening after a boom that lasted much longer, so it prices could carry on falling for longer too. I doubt they will fall as steeply as in the last crash, but the total drop could add up to the same amount if they keep going down for long enough.

>

> The 2012 olympics ,the govt chucking money to

> bank

The government chucking 50 billion at banks is unprecedented and shows just how badly damaged the economy is. It smacks of panic. It is more likely to cause alarm at the state of the housing market than to make buyers feel confident again.

>

> More Interest rate cuts

this was done very aggressively in the USA but house price falls accelerated.

> All this pessimissm is a chain reaction from the

> media and estate agents.Eg scenes of queus outside

> northern rock.

no, it's becausee we've all lived through an astonishing boom in house prices. Nobody expected it to last forever or to end painlessly. House prices in London are now ten times average earnings. That simply isn't sustainable.

> Also estate agents are taking longer to sell and

> get there commission so they are telling people

> to

> drop.They don't care what a vendor sell for there

> just after there commision.

Yes I agree that estate agents are now talking down prices, but they have no choice in a falling market. Sellers have to price low at the moment to stand a chance of selling because there is now an oversupply of property. Check SE22 on Rightmove if you don't believe me. There are now more than 400 properties for sale in East Dulwich. There were 260 in late 2007. Inventory has risen by more than 50%, but demand has fallen. Prices are determined purely by the balance of supply and demand.

> Yes a mortgage is like paying rent on a house over

> a long period.But you get a house out of it.

> What do you get from renting ?Landlords will

> charge pretty much anything and have no probs

> getting tenants because people have no choice and

> cannot afford a property,and have to pay for

> relocation costs every 6 months when tenancy runs

> out or rent goes up.

at the moment, a lot of people in East Dulwich are selling and moving into rented. If house prices fall, the seller's money remains safe in a savings account and earns interest, which covers rent. If the seller decided to keep their house instead of selling, their main asset would depreciate. People who haven't yet bought stand to gain by continuing to rent because they will be able to buy a much cheaper house in a year or so and can continue saving for a deposit in the meantime. Why buy a house now if it will be worth 5-10% less in year?

>

> Not many people buy outright and have ?250 spare

> cash.If they did they;ll use that s deposit for a

> ?600k

> property.

Yes i agree with that.

>

> Shortage of affordable housing

that's a myth. If housing was truly in short supply, rents would have risen in tandem with house prices. In reality, rents have kept pace with wage inflation and houses have risen far faster. The reason for rampant house price inflation is simply that interest rates have been kept too low for too long, causing a credit bubble. This has happened all over the world, which is why house prices are now falling in other countries too. It's not simply a question of the UK being a "small island" with a shortage of property - that has merely been one factor.

>

> Dont think prices will spiral downwards in a huge

> way,although

> they may be stagnant.

I suspect they will slide down gradually. I don't see any reason for a dramatic crash, but I do think they could keep falling gently for a long time.

[neilson99]

Thought I'd drop in with some experience here, anecdotal but my anecdote! I went to look at a 1 bed flat at Levante Court at the top of Lordship Lane before Christmas. It was on at ?230k and really small looking out onto the car park, so didn't really appeal. The agent showed me around a 2 bed flat in the block as well, which had dropped from ?275k to ?250K during the time I had registered with the agent and went around to see it. It was out of my range but understand it did sell at ?250k very quickly. The agent called me again a fortnight ago to tell me that the 1 bed was now on for ?207k, so it does look like prices are dropping somewhat. Anyway, there you go...

[AllforNun]

Maybe it is just ED that is crashing ? some clearly overpriced but who cares, it is only the buy to invest investors who are in panic mode and now dumping their properties on the market. In the words of the Chilli's "fuck em just to see the look on their face, fuck em just to see the look on their face"..... Oh sweet dreams my hemp weaved friends of ED, and stop worrying.

[Andyng]

benmorg Wrote:

-------------------------------------------------------

> Andyng Wrote:

> --------------------------------------------------

> -----

> the trick is to buy before everyone else. But look

> at graphs of house prices during the last crash

> from 1988-1995. It took 3 or 4 years for prices to

> stop falling. This time round the falls are

> happening after a boom that lasted much longer, so

> it prices could carry on falling for longer too. I

> doubt they will fall as steeply as in the last

> crash, but the total drop could add up to the same

> amount if they keep going down for long enough.

>

> >

> > The 2012 olympics ,the govt chucking money to

> > bank> > All this pessimissm is a chain reaction from

> the

> > media and estate agents.Eg scenes of queus

> outside

> > northern rock.

>

> no, it's becausee we've all lived through an

> astonishing boom in house prices. Nobody expected

> it to last forever or to end painlessly. House

> prices in London are now ten times average

> earnings. That simply isn't sustainable.

>

So your saying the queues outside northern rock did not

bring any panic at all

at the moment, a lot of people in East Dulwich are

> selling and moving into rented. If house prices

> fall, the seller's money remains safe in a savings

> account and earns interest, which covers rent. If

buyimg is better than renting if your deposit is large enough

you are in big trouble if your mortgaging 100%

Why buy a house now if it will be worth 5-10% less in year?

why rent if your rent will go up in a year?

why buy a house if you have no money

[benmorg]

Andyng Wrote:

> > > The 2012 olympics ,the govt chucking money to

> > > bank> > All this pessimissm is a chain

> reaction from

> > the

> > > media and estate agents.Eg scenes of queus

> > outside

> > > northern rock.

> >

> > no, it's becausee we've all lived through an

> > astonishing boom in house prices. Nobody

> expected

> > it to last forever or to end painlessly. House

> > prices in London are now ten times average

> > earnings. That simply isn't sustainable.

> >

>

> So your saying the queues outside northern rock

> did not

> bring any panic at all

no, that's not what I'm saying. The slowdown in the market is caused by changes in the global economy. The northern rock crisis had the same cause, so is linked to the house price falls, but it isn't itself the cause of house price falls, though it may have been a factor.

For a good assessment of the current state of the london property market, here's yesterday's Evening Standard:

http://www.thisislondon.co.uk/standard/article-23480853-details/Advice+to+first-time+buyers+and+investors%3A+don%27t+do+it/article.do

"Advice to first-time buyers and investors: don't do it

Mira Bar-Hillel, Property Correspondent

28.04.08

After the heady market conditions of last year - with its gazumping and 125 per cent mortgages - the spring downturn is starting to cause panic.

The market is facing gridlock because many sellers are being unrealistic about prices.

At the same time buyers are reluctant to commit to a market that they think - quite rightly - has further to fall. The result? A freeze. Houses are still going on sale at inflated prices but, in stark contrast to a year ago, no one is interested.

Prices are "slashed", but if they are reduced from a fictional original asking price the decreasing number of buyers will buy neither the "reduction" nor the house.

The result is a 40 per cent drop in property sales. So what should people do? As usual, it's horses for courses. For anyone who has no pressing need to sell, I would suggest not selling. Now is not the time to move house on a whim or to "test the market".

If you must sell, frequent reality checks are needed. If buyers are not biting, it can only be because your property is overpriced and no amount of wishful thinking or estate agent's jargon will change that. If you bought with a City bonus but now need to sell because your job is threatened by the credit squeeze, think very carefully.

There is a dearth of buyers out there and you must not delay the sale hoping someone will pay a larger price. Just find a buyer of some kind before prices fall further.

Anyone else facing redundancy or even repossession should make every effort to sell before the latter takes place. The experience of the early Nineties is that being repossessed is the worst possible option.

My advice to buyers - especially first-timers and investors - is much simpler: don't do it.

There can be no rational reason for buying anything, let alone the most expensive purchase of most people's lifetime, when the expert consensus is that it will lose at least 12 per cent of its value over the next two years.

This is also not the time for homeowners to move. The coming months - perhaps years - are likely to be quite stressful enough."