Has the ED housing market reached the bottom yet ( II )

[????]

Which given next year's going to be a far worse year in the general (real) economy makes us 'miserable doomsters' saying prices will fall by something nearer 40% peak to trough not look so far off the mark

[indiepanda]

Yes, knowing I am out of the housing market, people keep telling me now is a good time to snap up a bargain. I am ignoring their "wisdom" - with a recession only just starting, I think the market has a long way to go yet.

I don't fancy tying myself into a mortgage when I could find myself made redundant either - would rather have my deposit as a safety net to cover living costs in the event of redundancy than put it down on a house and watch it get eroded away from a nice capital sum towards negative equity.

[????]

Wise behaviour...this time next year I reckon (guess) will be when it starts turning but I think it will be slow then

[benmorg]

serif Wrote:

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

> I bow to your wisdom and your educated guesses

> benmorg.

you missed out the word "superior". Also, you didn't answer the question...

[JimSmith]

Agree totally quids we have a 'perfect storm' as far as London property prices are concerned. Tightening lending criteria both in terms of both multiples of salary and LTV, recession in the UK led by the City, huge personal debt with servicing costs increasing, tax to rise in the medium term and the outlook on the pound is not going to attract international buyers.

[huntaaar]

Roll on I say, I might actually be able to afford a 1 bedroom garage if prices keep dropping! Can I ask where you guys got the auction prices from? I am moving into rented in December and if I like it (which by the sounds of it I'm going to) I want to buy a 2 bed somewhere.

Thanks

[indiepanda]

I wouldn't risk diving in just yet - Nationwide have said they expect prices to carry on falling through 2009/10, and Roger Bootle a pretty well known economist, has said he thinks prices will drop by 35% overall and they have only gone 15% so far (and the rest of his article makes pretty grim reading too)

http://www.deloitte.com/dtt/press_release/0,1014,sid%253D5399%2526cid%253D233072,00.html

[lard]

Another auction. Not strictly ED but interesting ones from close by.

Lot 119 Danby Street house Se15 sold for 250,000 previously

Lot 199 Denmark Road, SE5 flat sold for ?119,500

Carnage across the board with the majority from HBOS with no reserve. The Camberwell flat was down 50% on it's previous sale. Some of the city centre flats in other areas of the country down 60-70%

Camberwell Flat

Auction Summary

You can factor in a few of these previous higher prices being dodgy (overpriced deals "sold" to unsuspecting folk), but this is the current state in general. Forget prices you see in estate agent windows as these are meaningless in comparison to the real situation.

[karter]

I haven't received a copy of Foxtons monthly magazine 'Welcome to your area' in several months.

Has anybody else not received this recently?

[AcedOut]

lard - interesting link (the second one). How did you find that and why is it on a nowinnofee website?

[matthew123]

I think that Labour will try everything to re-ignite the economy / housing market as their own political futures ride on it being a success. We've seen it with stamp duty freeze / bank bail outs / interest rates being slashed and now talk of tax cuts. The Chancellor has already put pressure on Banks to reduce their mortgage rates in line with the BoE Base Rate, so I think sooner rather than later they will exert massive intolerable pressure for Mortgage borrowing to be substantially eased. I think that will reopen the gates... so IMHO we are now more or less at the bottom of the East Dulwich housing slump.

I might be wrong but that's what I think.

[Jeremy]

Seems optimistic matthew123... I follow your reasoning, but you don't seem to be factoring in consumer confidence, return on buy-to-let, etc. I would be surprised if prices started rebounding any time soon.

Saying that, I don't quite share the bleak outlooks of benmorg, quids, lard, etc either.

[karter]

we still have a long way to go.... but that's what i think

[lozzyloz]

I think a housing price recovery is at least 2 to 3 years off. The job market is going to see a lot more unemployed, the China effect is about to hit and prices are still way off what most first time buyers can afford. However, when the recovery does come there's going to be a sharp price increase as investors with cash rush to buy.

[AcedOut]

We're at the tip of the iceberg in terms of the impact the credit crunch will have on the real economy. I see what's happened with the banks so far as just the start. I'm usually very optimistic on the economy, but not this time. There will be many more job losses to come in the next year or so. All this will have a further hit on house prices, so I see a further price adjustment (down) in the coming year or two.

[karter]

what acedout said.

[lard]

matthew123 Wrote:

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

> I think that Labour will try everything to

> re-ignite the economy / housing market as their

> own political futures ride on it being a success.

> We've seen it with stamp duty freeze / bank bail

> outs / interest rates being slashed and now talk

> of tax cuts. The Chancellor has already put

> pressure on Banks to reduce their mortgage rates

> in line with the BoE Base Rate, so I think sooner

> rather than later they will exert massive

> intolerable pressure for Mortgage borrowing to be

> substantially eased. I think that will reopen the

> gates... so IMHO we are now more or less at the

> bottom of the East Dulwich housing slump.

>

> I might be wrong but that's what I think.

They can't lend what they don't have.

We can't spend what we don't earn.

No amount of helping hand helped Japan or the US in the short or long run. We have already seen the stamp duty freeze have no effect whatsoever.

The bottom line is the money has to come from "somewhere". You can only get this money as a nation by creating more and taxing more, or by spending less "running" yourself. Anything else is a ruse, which ultimately will fail.

We must accept it has to run it's course, until it all becomes sane again.

What would we accept as a "bleak outlook"? 2004 prices? 2002 prices? Things weren't necessarily bleak then, so a 40-50% fall to those kind of levels shouldn't necessarily be classed as "bleak" - merely returning to some sort of normality.

Don't know why those auction figures were on that site..must be the guy who does them does them in his spare time.

[????]

Just go on BBC business companies for today - Virgin Media sheds 10% of workforce, Glaxo announces redundancies - this is daily news now and we haven't even started seeing the real carnage in the FS sector yet...anectdotally a mate of mine made redundant yesterday...it's coming, be prepared

[????]

Also everyones got far too much debt - consumers, companies, banks and governemnt, the recapitalisation of us all is going to hurt...a lot.

[AcedOut]

I'm already getting emails/calls from friends and ex-colleagues who have been made redundant over the past few weeks. A big US financial house just cut 10-15% of their workforce (3000+ people). Entire teams were cut. This didn't even make the news!

My advice - if you're moving UP the property ladder, sell now (if you can) and rent. Put all your money in the Swiss Frank and wait for the bottom of the property market (est 2 years from now). Buy that bigger property after prices have fallen further and the GBP has weakened even further against the CHF.

[lard]

These things always go in cycles. Always. If you investigate the different elements, you will get the same result that has been seen in the past. The most dangerous thought when these cycles appear to be panning out in the same way again... "its different this time"

For anyone thinking that it is just doom-mongering, I'm afraid to say that the current cycle is mostly imitating the early parts of 1930s America.

(!)(td):(

[jayes]

I sold at the start of the year and in rented accomodation at the moment. I'm waiting for prices to fall a further 25%-30% before I start to look around. I would expect this to be about this time next year.

Makes me laugh to see the estate agents still grimly holding onto 2 up 2 down Victoria stock in East Dulwich that they're trying to shift at ?400,000 plus. These are still overvalued by 25% at least. They may catch the odd unsuspecting punter with a sale every so often but not enough to keep the shiny coffee shop/estate agents open.....

There are thousands of jobs being lost each day and many renewed contratcs being offered are for a significant amount less than the employee was on previously. Banks wont lend as much, mortgage market is up the spout and as a free market there is not alot the Govt is able to do to get itself out of this mess. We may have some short term solutions but these are diversionary tatics and this all has to be paid for at sometime.

Personally I'm delighted, I hope the market crashes a further 50%. The Govt, the banks, the media and estate agents suckered so many people into paying inflated sums for properties and now I'm hoping they get their comeuppance and the market can return to something sustainable.

[karter]

Blimey Acedout, i hope that you are regulated by the FSA for giving out advice like that.:-S

[Moos]

oops, wrong thread.

[Jeremy]

Well, quite... you may have an "opinion" that CHF will outperform GBP, but you can't be sure... I certainly wouldn't advise anyone to expose their entire lifes savings to the FX risk.