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Rude awakening from the Scottish delusion:

 

http://news.scotsman.com/latestnews/First-...ince.4451340.jp

First Edinburgh house-price fall since 1971

...

6.5%

Downturn recorded by Edinburgh Solicitors Property Centre (ESPC)

 

So, Hadrian's Wall hasn't stopped it. Who would have thought it?? :o

 

Expect 50% drops. Edinburgh has a lot of oversupply.

 

"...But stone-built, traditional family houses will hold their value."

Sure. :lol: :lol:

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Rude awakening from the Scottish delusion:

 

http://news.scotsman.com/latestnews/First-...ince.4451340.jp

 

 

So, Hadrian's Wall hasn't stopped it. Who would have thought it?? :o

 

Expect 50% drops. Edinburgh has a lot of oversupply.

 

 

Sure. :lol: :lol:

 

It is not 10 minutes since the SNP crowed from the rooftops for extra funding and the return of free and easy lending North of the borer. Because Scotland was immune to falling house prices :lol:

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House prices are falling at fastest rate since the Great Depression

http://www.telegraph.co.uk/money/main.jhtm...bcnhouse204.xml

 

By Harry Wallop and Edmund Conway

Last Updated: 6:17am BST 05/09/2008

 

House prices are falling at the fastest rate since the Great Depression new figures show, with the number of home owners in negative equity trebling in the last month alone.

 

Figures released by Halifax, the country’s largest mortgage lender, showed that the average house price has slumped in value by 12.7 per cent since August last year – leaving the average price at just £174,178.

 

This represents a fall of more than £25,000 over the last year and is the fastest rate of decline since Halifax started collecting its monthly data in 1983.

 

However, leading City economists said that the housing market has never witnessed an annual fall of more than 10 per cent except for in 1931 – a year when Britain was hit by the aftermath of the Wall Street crash and sterling collapsed.

 

 

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From FTAlphaville's Markets Live today...

 

House price declines and subsequent increases in unemployment

Our Gilt strategists have examined the lags between the start of past housing crises and the first

significant increases in unemployment. They found that large increases in unemployment have

typically emerged about 16 months after the onset of a housing decline. UK prices started falling

a year ago, which means that the first significant rise in unemployment could appear in spring

2009.

 

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Higher Earners Now Hit By Mortgage Repossessions

 

http://www.telegraph.co.uk/money/main.jhtm.../bcnmort105.xml

 

Mortgage arrears and home repossessions are rising fast among higher earning households, a report by a credit rating agency suggests.

 

The finding indicates that serious housing debt problems caused by the credit crisis are not limited to those on low incomes.

 

The study, by Moody's, examined the situation of people who on average owed 66 per cent of the value of their home - far less than millions of riskier borrowers.

 

The proportion of homeowners in arrears for 90 days or more had risen by half, the report found. It stood at 0.9 per cent at the end of June, compared with 0.6 per cent at the same point in 2007.

 

Meanwhile the number of homes repossessed among the group more than doubled, rising to 0.082 per cent from 0.037 per cent last year.

 

Daron Kularatnam, a co-author of the report, said: "The percentage of mortgage loans greater than 90 days in arrears has reached the highest level of recent years."

 

The report added that the problem is set to get dramatically worse, as a large number of homeowners are preparing to come off fixed-rate loans and refinance under painful new terms.

 

Nitesh Shah, another co-author, said: "The 'payment shock' to those mortgage-holders coming off the fixed interest rate period of their mortgages may increase stress on householders,"

 

The authors also pointed out that there was typically a time delay between worsening economic growth and more borrowers failing to make repayments. This week the OECD predicted that Britain will be in recession next year, meaning the number falling into arrears could keep soaring for the next few years.

 

"While the increase in delinquencies has been relatively mild so far," the report said, "arrears are thus expected to continue rising for some time."

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Expectation of 25% drops hits the mainstream

BBC

 

The chief executive of the Nationwide Building Society has told BBC News that he thinks house prices could fall as much as 25% from their peak.

 

This prediction implies that 2.5 million homeowners could be pushed into negative equity.

 

Graham Beale also said he does not expect to see signs of recovery in the housing market until 2010.

 

Nationwide is by far the UK's biggest building society and is closer to the housing market than many others.

 

Over the course of the business cycle it provides slightly fewer than one in ten of all the mortgages in the UK - though its recent share of new home loans has been a bit less.

 

So Nationwide's chief executive, Graham Beale, carries weight when prognosticating.

 

What he said in an exclusive BBC interview on Monday is that he does not expect the housing market to show signs of recovery till 2010.

 

"I think we are into 2010 [before we see signs of recovery]," Mr Beale said.

 

"I think that next year we will see a similar pattern to this year...we will see further falls in house prices. And I think before we really get to the new world, whatever that is, I think we will be into 2010."

 

Negative equity

 

He also forecasts the peak-to-trough fall in prices will reach 25%..

 

That is a very significant drop.

 

It would mean that a typical house would have decreased in value by a quarter during the two-and-a-bit years from last autumn, when prices peaked, to some time in the next decade.

 

If Mr Beale is right, some 2.5 million homeowners would suffer from negative equity, according to research by Michael Saunders of Citigroup.

 

That would mean 22% of all householders with mortgages would have home loans greater than the value of their respective homes.

 

Beale believes that there is little the government - or anyone else - can do to stem in any significant way what he believes is a necessary adjustment of prices.

 

Confidence boost

 

He says that the US Treasury's colossal scheme to shore up the two great providers of housing finance, Fannie Mae and Freddie Mac, should help to restore confidence in financial markets.

 

But, he adds, it won't swiftly revitalise the UK housing market - even though Britain's prospects are inextricably linked to prospects for the US residential property market, because of its importance for the funding of the global financial system.

 

That said, the UK government is under pressure from banks and building societies to help them raise money so that they can lend a little more to us in the form of mortgages.

 

Treasury battle

 

The two options being considered at the Treasury are to provide a taxpayer guarantee for mortgages packaged up as bonds for sale to investors, or to extend an existing Bank of England liquidity scheme so that it could help banks to refinance new mortgages.

 

Both options would be designed to increase the confidence of global investors that money they provide to banks for lending in the form of mortgages would be safe.

 

And both options are loathed by the Governor of the Bank of England, Mervyn King, because he believes they could distort the housing market.

 

This creates the tantalising prospect of a serious showdown between the Bank of England on the one hand and the Treasury and 10 Downing Street on the other over the best way to revive our housing market, our banking system and our economy.

 

And it is one which needs to be resolved by 1 October, when the existing Bank of England liquidity scheme runs out.

 

25% off is only half of the story in my opinion. Slowly the "experts" who are quoted chapter and verse in the media are facing reality.

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  • 2 months later...

House prices could fall a further 36%

http://www.propertyweek.com/story.asp?sect...orycode=3128787

 

House prices are set to fall a further 36% over the next two years in what could amount to the worst post-war housing crash, according to the price of contracts being traded on the derivatives market.

 

Financial markets are pricing a further 22% fall in the housing market over the next 12 months, with another 14% in 2010, before flattening out in 2011.

 

 

 

Investors bet on record property crash

 

By Daniel Thomas, Property Correspondent

 

Published: November 29 2008 02:00 | Last updated: November 29 2008 02:00

 

House prices could fall 30 per cent over the next two years in what would be the worst crash on record, according to the price of contracts being traded on the derivatives market.

 

Investors are betting hundreds of millions of pounds on expectations that house prices could lose nearly half their peak value, say brokers. They also suggest that the housing market will not return to today's level of pricing for another 10 years.

 

Contracts being traded suggest the market will bottom out sometime in 2010, based on the Halifax house price index.

 

There has already been a drop of around 16 per cent in home prices so far since the market turned last year.

 

"There is a 45-50 per cent drop in house prices predicted peak-to-trough by trading of contracts on future house prices," said Philip Ljubic, a property derivatives trader at Royal Bank of Scotland.

 

"These numbers are based off hard transactions in the market. There is serious money being wagered that this is going to be the outcome of the housing slump so it gives it some weight."

 

http://www.ft.com/cms/s/0/5376608a-bdb8-11...00779fd18c.html

 

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surely if we get high/hyper inflation, house price falls with be curtailed pdq.

 

I was listening to the guest speaker on fsn last week http://www.netcastdaily.com/broadcast/fsn2008-1122-2.asx who predicts that property will be a winner again (albeit eventually) listen from 40mins onwards

 

I realize that the difference with the 70's may be that this time the inflationary event will be coupled with recession, but even so, if the value of the money greatly decreases, tangible wealth such as property will retain some value against the depreciating currency

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i think someone on here said -

even the Zimbabwean stock excange went up 600% this year..

It could be the same with proper-dee in the UK; it increases in price but it's value decreases relative to lots of other things..

 

My tip: look for the things where the fundamentals are unimpaired.

 

I agree.

 

wages in the UK have stood still for years, & now they have been dropping in the last couple of years, for various reasons.

all basic need prices have gone up dramatically.

all taxes/utility/mortgage/petrol costs have gone up dramatically.

 

BUT

 

the average UKer goes to Dixons & see's a 42" tv for £500 & says prices are cheap.

 

They will spend the next 5 years chasing the property prices down, telling themselves that their house is still worth a lot more than it really is.

People in this country will spend £1000 to make £500, but then lie & tell their friends that they have made £2000 & that's why the UK is in it's current state. (at a basic level of course).

 

Perception is EVERYTHING to the majority it would appear. What happens when PERCEPTION meets REALITY ?

 

DEPRESSION, coming to most people very soon. They won't be worried about house prices in 2010, they will be worried about food/water & heating imo. Some are experiencing this right now in fact BUT you won't see any indepth reports on the news though, this sort of thing only happens in those other countries, you know those countries that are abroad. ffs :D

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We won't see an immediate hyperinflation. The current quantitative easing might need 2-5 years to feed through, but then it will hit like a tsunami.

 

There is no reason why houses shouldn't have dropped 50% by then. I also think that in a hyperinflation (while a house stays a house of course!) houses will do less well than other more liquid assets, especially gold and silver.

 

(I've written the above so many times before, I can't even remember how often. :) Sometimes I think I should go on part-time (forum-wise). :lol: )

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UK house prices 'to plunge like US'

http://www.guardian.co.uk/business/2008/no...rime-markets-us

 

Robert Shiller, the Yale economist who forecast both the bursting of the dotcom bubble and America's property crash, is warning Britain's homeowners to expect things to get every bit as bad on this side of the Atlantic.

 

In London to promote his new book, The Subprime Solution, Shiller told The Observer that consumers should be wary of the comforting excuses many analysts find for explaining why Britain's housing market will be hit less hard than America's, where prices have already fallen by more than a quarter, and repossessions are rife.

 

'A lot of people say that in the UK we haven't seen so many defaults on mortgages - but we're just earlier in the cycle,' he said.

 

'These housing cycles go for a long time. Real estate markets are very different from liquid financial markets, in that they have a lot of momentum, and they continue in the same direction for a long time.' He pointed out that during the last housing boom and bust, in the 1980s and early 1990s, prices in London more than doubled, in inflation-adjusted terms, 'and then they came almost all the way back down again. That's certainly a possibility now, and that would be huge. Think of all the balance-sheet problems that would cause, for banks and for households.'

 

 

Government house price data 'flawed'

http://www.guardian.co.uk/business/2008/no...ex-market-value

 

The Government's official house price index, produced by the Land Registry, has been accused of misleading homebuyers and policymakers after it emerged that it excludes repossessions and auctions on the grounds that they do not reflect the 'full market value' of the sale.

 

:blink: :blink: :blink:

 

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Shiller was invited to Downing Street last week to share his analysis of the crisis with Alistair Darling and Gordon Brown. He is calling for much better financial education for the public

 

"Educate the public" ?! :blink: :blink:

 

Is he insane ?

That's the last thing the politicians want. The public might then start questioning :blink: :blink:

 

I'd like to have been a fly on that wall :lol: :lol:

 

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Government house price data 'flawed'

http://www.guardian.co.uk/business/2008/no...ex-market-value

 

:blink: :blink: :blink:

 

Why does that surprise us, it shouldn't - any excuse to spin the numbers in their favour is welcomed by BoE and VI's.

 

I recently did some digging into the contents of the 'basket of goods' that make up RPI/CPI and was alarmed at how many what I termed non-core household expenses were in there, the numbers are just fudged by unjust weightings to hide the real increases.

 

SafeBetter

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House prices: How low can they go?

 

"As with many properties on the market this year, the sale of Hedgerow Cottage at Barrington, Somerset, has turned into an agonising Dutch auction. In the summer of last year, the four-bedroom detached house was on the market at just over £500,000.

 

That was always over-ambitious, says Andrew Perry of Greenslade Taylor & Hunt (01460 57222), who took on the property in April at what he regarded as a more realistic price of £475,000. Nevertheless, he never imagined that he would still be trying to sell the property in November, now with its price slashed to £395,000 – exactly the same price for which it sold for new in March 2005. "

 

20% in just over a year, some of these properties fuelled by city money will be hit hard. South West UK already leading the % drop tables.

 

"One who thinks so is Jonathan Davis, chartered financial planner with Armstrong Davis and spokesman for the cult website www.housepricecrash.co.uk, where those who stayed out of the property boom go to gloat. A few months ago, commentators on the housing market were lining up to pour scorn on his dire predictions. Kirstie Allsopp even called his website "sick". Now, Davis admits he has been wrong about the housing market – but only in as much as it is in a worse state than he had thought.

"In April 2007 I said I thought prices would fall by 25 per cent from peak to trough," he says. "By October 2007, I increased that to 35 per cent. Now, I think prices will fall by 40 to 50 per cent, and the market will not reach a bottom until 2011."

 

Davis has come up with a new theory on property prices. "Historically, London property has tended to be advantageously priced when the average home is worth 300 ounces in gold," he says. "That has been true for decades. Take the early 1990s crash, for example. In 1993, when the market in London reached the bottom, gold was worth about £225 an ounce. Three hundred times that is £67,500, which is about the same as the average London property at the time. At the moment, gold is around £575 an ounce. Three hundred times that is £172,500."

 

By contrast, the average London property in October, according to the Land Registry, was £328,927 – suggesting that, according to this theory, prices have a long way to fall, unless, of course, the gold price rises. So should we all be waiting for the moment that the average London house price is aligned with 300 ounces of gold, and then pile in? It isn't that easy, he says, as gold prices tend to work on a 20-year cycle and property on an 18- to 20-year cycle. In any case, Davis believes, it might be worth hanging on to your gold. "In spite of the falls this autumn, the gold price is on a long-term bull run, which started in 2000."

 

Pity HPC'ers didn't like us to talk about it though on their site!!! :lol::lol:

 

SafeBetter

 

 

 

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Government house price data 'flawed'

http://www.guardian.co.uk/business/2008/no...ex-market-value

 

 

 

:blink: :blink: :blink:

 

 

do you know what Steve,

 

I kept saying in 2007 & 2008 on both hpc & ghpc, that we would have anomalies in the stats, even the official government ones.

It was so obvious to me & others that this would be the case & that's why it's very dangerous to just rely on stats. ;)

 

B)

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do you know what Steve,

 

I kept saying in 2007 & 2008 on both hpc & ghpc, that we would have anomalies in the stats, even the official government ones.

It was so obvious to me & others that this would be the case & that's why it's very dangerous to just rely on stats. ;)

 

B)

 

And I bet 93.5% of people on here agree with you :D :D

 

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House prices: How low can they go?

 

"As with many properties on the market this year, the sale of Hedgerow Cottage at Barrington, Somerset, has turned into an agonising Dutch auction. In the summer of last year, the four-bedroom detached house was on the market at just over £500,000.

 

That was always over-ambitious, says Andrew Perry of Greenslade Taylor & Hunt (01460 57222), who took on the property in April at what he regarded as a more realistic price of £475,000. Nevertheless, he never imagined that he would still be trying to sell the property in November, now with its price slashed to £395,000 – exactly the same price for which it sold for new in March 2005. "

 

20% in just over a year, some of these properties fuelled by city money will be hit hard. South West UK already leading the % drop tables.

 

"One who thinks so is Jonathan Davis, chartered financial planner with Armstrong Davis and spokesman for the cult website www.housepricecrash.co.uk, where those who stayed out of the property boom go to gloat. A few months ago, commentators on the housing market were lining up to pour scorn on his dire predictions. Kirstie Allsopp even called his website "sick". Now, Davis admits he has been wrong about the housing market – but only in as much as it is in a worse state than he had thought.

"In April 2007 I said I thought prices would fall by 25 per cent from peak to trough," he says. "By October 2007, I increased that to 35 per cent. Now, I think prices will fall by 40 to 50 per cent, and the market will not reach a bottom until 2011."

 

Davis has come up with a new theory on property prices. "Historically, London property has tended to be advantageously priced when the average home is worth 300 ounces in gold," he says. "That has been true for decades. Take the early 1990s crash, for example. In 1993, when the market in London reached the bottom, gold was worth about £225 an ounce. Three hundred times that is £67,500, which is about the same as the average London property at the time. At the moment, gold is around £575 an ounce. Three hundred times that is £172,500."

 

By contrast, the average London property in October, according to the Land Registry, was £328,927 – suggesting that, according to this theory, prices have a long way to fall, unless, of course, the gold price rises. So should we all be waiting for the moment that the average London house price is aligned with 300 ounces of gold, and then pile in? It isn't that easy, he says, as gold prices tend to work on a 20-year cycle and property on an 18- to 20-year cycle. In any case, Davis believes, it might be worth hanging on to your gold. "In spite of the falls this autumn, the gold price is on a long-term bull run, which started in 2000."

 

Pity HPC'ers didn't like us to talk about it though on their site!!! :lol::lol:

 

SafeBetter

 

That must be one of the most outstanding articles written so far.

 

Simply because it is the Telegraph, comparing house prices and gold !!!

 

One who thinks so is Jonathan Davis, chartered financial planner with Armstrong Davis and spokesman for the cult website www.housepricecrash.co.uk

 

:lol: :lol: :lol:

 

Isn't that incredible. It's a "cult website", much like websites talking about shares are "cult websites" :lol:

 

I think that gives you an insight into the thinking or the writer.

 

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House prices: How low can they go?

 

"As with many properties on the market this year, the sale of Hedgerow Cottage at Barrington, Somerset, has turned into an agonising Dutch auction. In the summer of last year, the four-bedroom detached house was on the market at just over £500,000.

 

That was always over-ambitious, says Andrew Perry of Greenslade Taylor & Hunt (01460 57222), who took on the property in April at what he regarded as a more realistic price of £475,000. Nevertheless, he never imagined that he would still be trying to sell the property in November, now with its price slashed to £395,000 – exactly the same price for which it sold for new in March 2005. "

 

20% in just over a year, some of these properties fuelled by city money will be hit hard. South West UK already leading the % drop tables.

 

"One who thinks so is Jonathan Davis, chartered financial planner with Armstrong Davis and spokesman for the cult website www.housepricecrash.co.uk, where those who stayed out of the property boom go to gloat. A few months ago, commentators on the housing market were lining up to pour scorn on his dire predictions. Kirstie Allsopp even called his website "sick". Now, Davis admits he has been wrong about the housing market – but only in as much as it is in a worse state than he had thought.

"In April 2007 I said I thought prices would fall by 25 per cent from peak to trough," he says. "By October 2007, I increased that to 35 per cent. Now, I think prices will fall by 40 to 50 per cent, and the market will not reach a bottom until 2011."

 

Davis has come up with a new theory on property prices. "Historically, London property has tended to be advantageously priced when the average home is worth 300 ounces in gold," he says. "That has been true for decades. Take the early 1990s crash, for example. In 1993, when the market in London reached the bottom, gold was worth about £225 an ounce. Three hundred times that is £67,500, which is about the same as the average London property at the time. At the moment, gold is around £575 an ounce. Three hundred times that is £172,500."

 

By contrast, the average London property in October, according to the Land Registry, was £328,927 – suggesting that, according to this theory, prices have a long way to fall, unless, of course, the gold price rises. So should we all be waiting for the moment that the average London house price is aligned with 300 ounces of gold, and then pile in? It isn't that easy, he says, as gold prices tend to work on a 20-year cycle and property on an 18- to 20-year cycle. In any case, Davis believes, it might be worth hanging on to your gold. "In spite of the falls this autumn, the gold price is on a long-term bull run, which started in 2000."

 

Pity HPC'ers didn't like us to talk about it though on their site!!! :lol::lol:

 

SafeBetter

 

Well I never! :lol:

 

Goldfinger should have been cited IMO. :(

 

 

 

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Mortgage lending dives to £459m

Published: Monday, 1 December 2008, 9:50AM

 

Net mortgage lending dived by nearly 70 per cent during October to just £459 million, the Bank of England has said.

 

The figure is well down on September's £1.49 billion and only 6 per cent of the level for October 2007. The steep fall was driven by the ongoing shortage of capital banks have to lend.

 

It may also reflect a renewed tightening in their lending criteria in the wake of the collapse of Lehman Brothers in September, which triggered a new round of volatility in the financial markets.

 

http://www.itv.com/News/Articles/Mortgage-...-784381848.html

 

Gosh !

 

==========

 

House sellers forced to knock 11 per cent off asking price, Hometrack claims

House sellers are having to knock at least 11 per cent off asking prices before they can attract buyers, according to the latest gloomy survey that suggests the slump is continuing apace.

 

Hometrack, a property research company, calculates that sellers got an average of just 88.9 per cent of the asking price in November, compared with 95.7 per cent at the height of the property bubble 18 months ago.

 

It is the latest evidence to suggest that home owners are having to drop their prices drastically in order to sell their properties.

 

Last month the Royal Institution of Chartered Surveyors said sellers were "radically reducing their asking prices, as the reality of the market finally dawns on many vendors."

 

http://www.telegraph.co.uk/property/proper...ack-claims.html

 

 

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