to wonder when reality will hit house prices?

[TalkinPeace2]

Rightmove chart of house asking prices :
www.housepricecrash.co.uk/indices-rightmove-national.php
August 2011 average is £231,543
Land registry chart of what houses actually sell for :
www.housepricecrash.co.uk/indices-land-registry-national-monthly.php
August 2011 average is £163,049

£68,494 less

so there are THOUSANDS of homes sitting on the market with unrealistic asking prices that buyers cannot get a mortgage for
and then politicians tell us to build loads more houses - that people still cannot afford.

Estate agents are LYING to people who want to move about what property is really worth.
When will we all stop kidding ourselves?

House prices will come down through inflation - which is good for the VI's as it looks as though there hasn't been a crash!

We bought a year ago and have watched prices come down around here since then (doesn't bother us - we just needed a roof over our heads and will be here for a while).

Developers will, of course deliberately restrict new housing stock over the next few years to ensure that demand remains high for new houses.

Wonder if this thread will make it over to HPC - they love it when we start debating a crash over here

I read HPC regularly - must remember my password for over there !

There is no true housing shortage in this country.
Not with nearly a million homes empty
and at least another million only in use at the weekend or summer

house prices are high in this country because the commission earners have let them get that way.

if it was all about demand then the empty towns in Ireland and Spain or the deserted streets in Salford should not exist

True TalkinPeace2 - but it is all about building houses in desirable areas near good schools etc. A friend sells new houses and has been earning huge commission even over the last year or so. Buy-to-let is responsible for much of it - some people buying up 2/3 flats at a time. I know someone living next door to a house that has never been occupied by its owners - just bought on a whim in case they fancied moving back to the UK sometime. Makes me

Sorry but NO.
There is no more space or water in the South East.
The jobs and schools need to move to where the houses are.
And as for the empty properties
YES
All councils should remove ALL rate relief on empty and second properties
also single person relief should only be available on properties up to Band C
at which stage the perks of keeping properties empty would melt away
I'm not even sure that student houses should get rate relief.

I hope this happens in the short period of time between me selling my house and buying my next one....

Talkinpeace I bought my flat interest only because I knew I would sell it on, pay off the mortgage and use the equity for my next home. It was an investment. It has 120k equity in it now - according to the offers I received when it was on the market last month. I can afford it - when I bought it my mortgage was 1700. It's now 450.

I bought it as an investment and a home - apart from a few years when I let it out when we were traveling, I've lived in it as our primary home.

I know multiples have gone up. Our problem is the lender won't take my partner's income into account but that's a whole other thread.

I know a couple of people who have put their house on the market and said 'if I get 'x' I'll sell, if not I'll stay put for a few years' - it is that kind of thing that makes the average asking and selling prices so divided.

There is a bungalow that's round the corner from us, has been on the market for 4 years. Its far too overpriced (about 50k over what houses sell for round here, and its nothing special).

Another aspect of this that hadn't occured to me until recently - I'll illustrate with an example.

Buy house at £100k with £40k deposit get mortgage at a decent rate, say fixed for 5 years.

5 years up and you owe 50k (these are very badly made up numbers btw)

Try to remortgage but stoopid websites like Zoopla use an algorithm to determine an estimated house value of £75k suddenly your loan to value has moved from 50% to 67% and better rates are no longer available to you.

Crap.

It feels like as the turnover of properties slows in my area the assumption is house values decrease. Ok I am annoyed that Zoopla in particular is devaluing my house after 1 year ownership and putting the fear in me for remortgaging.

I guess as long as there are people with nowhere to live and as long as some places are nicer to live than others, there won't be a general crash.

I think you'll find there are parts of the UK where housing is quite cheap and still doesn't sell.

And of course there are the people who don't need to sell, but might move if the price was right. Like my parents possibly.

And there are those, like us, who did and put the house on the market quite low and sold within 6 weeks when everything else had been sitting there unsold for years.

I guess what I am saying is your reality isn't the same as everyone else's reality IYSWIM.

Orm we had a mixed model last year. I sold my flat which I thought was completely over valued and I had an c80% mortgage so I just wanted out.

It was an old victorian tenement (flat), I think these properties are on their last legs - roof going, stonework shoddy, cast iron waste pipes rotting from inside out. So I was happy to sell at a discount to shift quickly.

My OH on the otherhand had a modern flat better location he held out as he had no mortgage and we needed to maximise our deposit to buy a house which we wanted. He was lucky as he had location on his side.

My solicitor was ace and she advised me not to reduce the price on mine so much (valued at £110k I reduced to £96k) - saw her recently and she said I was absolutely right as no more flats have sold in my old street since.

Everyone's reality is different as you say.

Banks are managing mor ethan risk of lending at teh moment they are also managing their own capital issues - trying to balance deposits with lending. So it isn't just about the borrower.

I just don't understand why they won't lend. If an existing client with five years payment history (including when interest rates were much higher) has a 35-50 percent deposit, excellent credit rating, no other debt and stable income.

They won't lend me what they lent me five years ago when I had no deposit.

But actually I feel very lucky to own a home because I certainly would never get one now.

mumble did they give a reason to you?

If they didn't i could be that the bank in question has a lending freeze on. It would be rare for all lending to be frozen but if they are trying to rebalance the assets and liabilities on their balance sheet - that is get more deposits in v loans out. They maybe focusing on super super safe lending, or super profitable lending.

When we applied last year we were knocked back by 2 banks and offered by another 2. We were 2.3 times our joint income and a 40% deposit. The 2 declines were woolly. But we noticed that the products we had applied for were taken off the market a few days later - so I guess nobody would have been acccpted as the product had become less profitable.

Houses where I live were fairly cheap until a few years ago when a load of investment was planned, bastardising property developers discovered how cheap the houses were and started snapping them up, the prces went up by silly amounts.

Luckily we bought our 3 bed semi for 24k in 2001 when I was only 19.

8 years later the 2 bedroomed house next door went for Over 150 k, these are only small houses with tiny yards, they should be affordable to people on low wages, those peo
They now have no chance of buying a home.

The Government are also now using the excuse of 'housing shortage' to attempt to change planning regulations so that more new houses can be built on greenfield sites - lots of opposition to this in the countryside apparently.

As OP says there wouldn't be a housing shortage if some legislation was changed in favour of people wanting the simple right to live in a home for an affordable price (eg as suggested, changing ASTs to something longer term with more tenant rights, making BTL less attractive, taxing unlived in property etc etc), but this would mean shifting the balance away from banks and others who have vested interest in keeping prices inflated.

Not sure if I'm right, but surely it's also in the government's interest to keep the value of UK housing stock inflated on paper, as if it deflated it would show up internationally as decreasing the 'value' of the UK's assets?

I had to move house about a year and a half ago, and was pissed off to discover that despite:

1. having specifically asked for a PORTABLE mortgage when I had originally taken out the mortgage
2. having never missed a mortgage payment
3. having planned to purchase a house for less than the one I currently owned (thus decreasing my overall debt) I was not permitted to do so as my earnings had fallen and the bank would not allow my mortgage to be moved as I no longer earned enough for them to agree to a mortgage of that amount.

Which was really irritating as I already owed them money and had they just let me do it then the risk their money was at would actually decrease since my repayments would be smaller and there was a job waiting for my family at the new house location, wheeras he was unable to work anywhere near the old one.

It was just insane, and I am still cross about it.

In part, I blame the 'right to buy' for the way house prices spiralled. Also, if we still had decent council housing stock, then there wouldn't be a lack of affordable housing.

I agree though that there's a lack of realism about falling prices - we've just bought a house that had been on the market for 10 months. When we had it valued it was worth 15k less than the previous survey carried out for the sellers. Obviously we dropped our offer down to the new valuation as you can only get a mortgage up the valuation, but the sellers were apparently very upset about this. We felt their estate agents were to blame for inflating their expectations, which has left them feeling that we've in some way ripped them off.

TalkinPeace2

You were spot on with your observation about many people's view of their home as an investement and their almost inevitable expectation of recouping the costs of extensions, improvements or even maintenance.

I have lost count of the number of clients (I'm an Architect not an Estate Agent BTW) who are horrified when I bluntly explain that it is very rare for the full cost of these types of work to be fully recovered when they sell. It is very common indeed to hear "Oh, so the extension / loft conversion / granny annexe / whatever wil cost £60,000. So that will add £60,ooo to the value of my hous of course" :(

quodlibet - yes aren't they just! And they keep quoting the house builders association (or whatever they are called) as the authority on the planning process and how bad it is. As if they don't have a vested interest in it being as simple and easy-going as possible. It isn't a given that all housing development is a good thing - there are often good reasons not to be build all over the green belt. But watch our countryside disappear at the rate of knots now....

mumblesale
your mortgage advisor is not correct there. We just borrowed slightly over 6x salary with Halifax. You need a triple A credit rating but it can be done.

thing is, in our area we could easily afford ex-council stock. but who wants to?