Has the housing market in ED reached its bottom yet?

[Moos]

Lots of people have had to remortgage with higher interest rates, and interest rates may keep going up. If in that circumstance you have to sell and retrench then you're in big trouble if you can't cover your repayment when you sell. I hope that will only be a very few people, as interest rates are still relatively under control, but it will be very painful for those people.

re: your comment on renting, agreed - in some other countries renters have far more rights and the assumption is that you are in it for the long term, and may even rent for life. In parts of Germany for eg the landlord has to come up with a good reason to terminate a rental agreement, not just give notice.

[SeanMacGabhann]

True, in the examples you mention people will be experiencing pain. But of the 2 people in that situation that I know at work it's entirely their own fault. The panicked into getting a mortgage, over-extended themselves, didn't listen to people who said teh whole thing could blow up in their face (you can guess who one of them was) so, at least for the people I know directly, sympathy is limited

[smith]

But we've lived through 'negative equity' before and no doubt will do again. It's a tragedy that some people will lose their homes but for most people who can sit tight it makes no difference at all. Renting has it's advantages and disadvantages. Freedom versus long-term investment. Property will rise and fall, a Labour government will come and go - it's what maintains a 'healthy' economy ultimately.

[Moos]

Yes, taking a long-term point of view, I don't think anyone would disagree that a correction in prices was necessary. My posts was in response to

Surely it's only a problem if you bought at the height of the market and need to sell in this depressed market.

edited for missing word. Were people always this sloppy in written English??

[SeanMacGabhann]

Just those of us like me what left skool early

[Moos]

I haven't got that excuse.

[Jeremy]

.

[SeanMacGabhann]

Agreed but given that these cycles ALWAYS come around, regardless of who is in power, why can't people learn a lesson. That way, the next time we are booming and some estate agent says to a couple worried about whatever policy they are selling at the time that "ahhh but it's different this time", it will be enshrined in law that we can punch that person in the face

Woefully constructed sentence that, but still, you get my drift

[Moos]

I do agree with the face-punching for anyone who lies to people about what they can afford!

I believe it's because of rising prices. People have expectations about their quality of living, and when they have to compromise on the area they'd like to live in and still get faced with the prospect of calling a noisy shoebox home, it takes a very cool head not to be tempted by a huge loan that will buy them a better place to live.

[smith]

Who ever said it was different this time? And I'm not sure that "face-punching" will do anyone any good to anyone - liars or not. Most of us are responsible for our own actions - not exactly worried victims who get pressurised into buying what we can't afford. People aspire to living in houses in desirable areas for all sorts of reasons and not usually because they're lied to by a bank or (even worse) an estate agent!

[SeanMacGabhann]

A very cool head

Or regulation

I don't want to come over all TLS, but back to the days of smaller limits on salary-multiples I say

[SeanMacGabhann]

Of course I don't mean literally punching someone's face. There are security cameras everywhere..

As for

I have lost count of the number of experts on radio and TV when asked (during the boom) how much longer can teh boom go on - surely it must busrt? And the response was always along the lines of "It won't burst, the economy is different and lessons from previous busts have been learned". I paraphrase mostly, but the "different this time" bit was used almost weekly

[SeanMacGabhann]

I was so convinced at how common place the phrase was I did a quick google

From marketoracle

Their quotes

and from the

Telegraph

An analysis on IDTT "phenomenon"

IDTT

[smith]

Paraphrasing government spokespeople or economists? I'm an eternal optimist but many people had predicted this 'crash' for the last three years. Not me I hasten to add! But, I still maintain that it's all relative. Rents have softened and property prices have fallen but I believe that the only real losers will be those who have to sell immediately without any intention of buying again. It's virtually impossible to 'overstretch' oneself with debt anyway since the lending houses have battened down the hatches!

[Asset]

It depends, I have a self-cert mortgage as a self-employed person. When I fixed the rate 2 years ago it was at 5.09%, I'm now being offered 6.99% which is increasing my monthly outgoings by nearly ?100. There are around half as many lenders offering self-cert mortgages now than a year or so ago. Even though I am in the fortunate position of having a mortgage of only around 20% of the value of the property it still means the monthly payments go up substantially.

That is not me 'overstretching' myself, but the economics of the situation going against me.

[will dex]

er, yeah, Asset, try paying 7.5% (was 5.09)on 90% mortgage following Northern Rocks bad management issue. Thats going against you... i wish it was just ?100/month more(!!!)

hmmm

[????]

....yeah, but you were paying 5.09% because of same issue..I know it's tough but the deals they were all giving out were ridiculous

[ibilly99]

http://www.rightmove.co.uk/viewdetails-17014261.rsp?pa_n=1&tr_t=buy&mam_disp=true

Land Registry

14 Mar 2006 5a Dunstans Road, Southwark, London,Greater London SE22 0HQ Flat (New build) Leasehold ?250,000

ouch

[benmorg]

ibilly99 Wrote:

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

> http://www.rightmove.co.uk/viewdetails-17014261.rs

> p?pa_n=1&tr_t=buy&mam_disp=true

>

> Land Registry

> 14 Mar 2006 5a Dunstans Road, Southwark,

> London,Greater London SE22 0HQ Flat (New build)

> Leasehold ?250,000

>

>

> ouch

it is quite shocking and I think a sign of the times. I hope the owner is OK.

[will dex]

??? -strongly agree, i was just making the point a ?100 rise in mortage payment at this time should be seen as a blessing.

[bawdy-nan]

Its out of ED but this has to be on eof the most extraordinarily downbeat bits of marketing I've ever encountered - "see, see the lovely views"

[red devil]

Don't think the falling market accounts for all of the 41% drop, this property was on the market well before the recent downturn (about 18 months ago), can't remember the price but think it was around ?225k, an agent at the time told me it had major structural issues which would set a buyer back circa ?30-40k, obviously the owner didn't get a structural survey when they bought it in '06, bit of a double whammy though, structural problems and a falling market, at this price it looks like the owner has lost the battle and the mortgage company is trying to offload it quickly, indeed a sign of the times...if it was new build it begs the question why the buyer didn't have any readdress re. the structural problems e.g. NHBC certificate, or even their own building insurance, my hunch is that the 'builder' rode off into the sunset on his horse, buyer beware!

benmorg Wrote:

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

> ibilly99 Wrote:

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

> -----

> >

> http://www.rightmove.co.uk/viewdetails-17014261.rs

>

> > p?pa_n=1&tr_t=buy&mam_disp=true

> >

> > Land Registry

> > 14 Mar 2006 5a Dunstans Road, Southwark,

> > London,Greater London SE22 0HQ Flat (New build)

> > Leasehold ?250,000

> >

> >

> > ouch

>

>

> it is quite shocking and I think a sign of the

> times. I hope the owner is OK.

[benmorg]

red devil Wrote:

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

> Don't think the falling market accounts for all of

> the 41% drop, this property was on the market well

> before the recent downturn (about 18 months ago),

> can't remember the price but think it was around

> ?225k, an agent at the time told me it had major

> structural issues which would set a buyer back

> circa ?30-40k, obviously the owner didn't get a

> structural survey when they bought it in '06, bit

> of a double whammy though, structural problems and

> a falling market, at this price it looks like the

> owner has lost the battle and the mortgage company

> is trying to offload it quickly, indeed a sign of

> the times...

last sold for ?250,000 in march 2006. It was being marketed june 2008 at 245,000. Price dropped to 170,000 on July 10th, then dropped again to 150,000 at end of august. The mortgage company have an offer of 140,000 which they will presumably accept if no better offers.

I assume it's a repossession. I feel sorry for the owner.

spotted another repo on upland road - a standard 3-bed victorian terrace (currently split into two flats) asking ?290,000. These distressed sales are setting the benchmarks for future prices and give some idea of how far things may fall over remainder of 2008 and into 2009.

[red devil]

properties like this on the open market used to be few and far between, they tended to get put into auctions, but I read recently that a third of auction lots are remaining unsold so it's going to become a lot more common...

[????]

100