odaat

http://www.angeltowns.com/members/ho..._articles.html

odaat

Economists at PricewaterhouseCoopers (PWC) warned that house prices are now dangerously overvalued and could cause prices to plumit over the next month or so.

With public confidence being so high, house prices had endured a "speculative frenzy" boosted by buy-to-let investors the group said.

But it warned price falls could rival those of the early 1990s, and could lead us into another recession.


Buy-to-let exit

The group said rising interest rates combined with people exiting the buy-to-let market could cause a fall in house prices. Also, with the fresh threat of terrorist activity, the housing market will be the first to suffer the financial uncertainty.

"Based on our analysis of evidence from previous housing market cycles, prices could decline by about 40% to 50% in cash terms," John Hawksworth, head of macroeconomics at PWC said.

Mr Hawksworth went on to warn that a fall in house prices combined with high level of personal debt could lead to increasing bankruptcy rates and negative equity returning to some parts of the UK.

Overall, a fall in house prices could reduce consumer spending by about 7.5% to 10.5% over the next few months with the impact on economic growth being of grave concern, PWC concluded.

Warning signs

PWC is the latest of a number of financial firms to forecast a fall in house prices over the next few years.

In February Durlacher predicted house prices would fall 30% from the second half of 2004 as the buy-to-let market collapsed.

Several independent economists share this view.

And last month, Mervyn King, governor of the Bank of England, warned property prices were "well above what most people would regard as sustainable in the longer term".

He also warned prospective buyers to be cautious of taking the plunge, saying that the prospect of falls in prices were now "greater than they were".

The Bank raised rates in July for the third time in as many months to 4.5%, in a bid to cool the market.

The the two most likely triggers of a slide in prices - an abrupt rise in unemployment or a sudden spurt in interest rates - are now "on the horizon", he said.

Many home owners are now looking to decrease their mortgage by moving to Verwood.

odaat

http://www.housepricecrash.co.uk/new...e-jul-2004.htm

Stormz

and your point is....... ???

It doesn`t have anything past 1996.

JackTheLad

I think the point is that history repeats itself. So read that and see what *may* be in store in the next few years.

Cheers,
JTL

Stormz

yeah I agree, but when I had posted my reply he hadn`t put up the latest figures (that I could see at least).

Thing is, all the ones who need it to remain strong say that things are totally different this time as interest rates are low and the UK isn`t in a recession.

Vinny van Gogh

I have seen a lot of the house price crash stuff about and dont believe it!
We live in a built up area but we boughta house which as a small woods behind. We are not overlooked and have plenty of birds etc,. AND my dearly beloved puts food out for a family of foxes everynight!

I insistedthat £15000 be added to the valuation for the privacy and view.
OH, no it will never sell.... we turned down three offers and a 4th was full money. Unluckly..the property we wanted was pulled off the market and in conjunction with some bad times that decended on us..we pulled it off the market. 12 months later we changed estate agents and the valuation bit was repeated..after adding another £25000 due for market price increases. Again told never sell at my price....had three full money offers before we had time to find a place. Cutting out a lot of ins and outs the short version is that our daughter and partner who has family in Adelaide and lived there for some of his childhood years decided to emigrate...we went to Oz for a holiday with them......net result our plans altered to a move to OZ as soon we could sort a method out. Took the house off the market.

OK where is this going....an immigration agent suggested we get new valuation as build up to a retirement visa statement of worth. In come the estate agents and without my £15000 addition..the house price has increased by £20000.
OK its not yet on the market and until it is we wont know how viewers will react. My believe is that those who view are interested, human nature will force them to seek a reduction... I have always told them that we have other offers and it may come to closed bids unless we have a full money offer.
The time wasters depart and others continued talking.

Finally, estate agents want a commision from the sale and a £5000 loss to you is only a few quid in real terms to them. Hold you nerve..hold your price and dont panic or listen to newspapers and dont tell viewers you need to sell cos your moving to OZ....you are just inviting a price reduction.

JackTheLad

Sounds like you messed alot of buyers around for a few years.

Maybe shows the people on here who are desperate to sell, and cursing buyers, that it works both ways, sometimes the sellers aren't really genuine, so caveat emptor.

Cheers,
JTL

Vinny van Gogh

I thought my post explained a situation with regard selling and circumstances..."messing a lot of buyers" was not my remit. To cut down on space I shortened the story....about folk making full price offers only to get phones calls weeks after with a sob story and can we reduce the price...who is messing who around. Second time we put it up we accepted a full price offer from a middle aged hippy "I.T. and media expert" along with his just qualified as Doctor of Phsycology and 20 years his junior partner, who after one week telephoned and stated that unless we moved out ASAP - they would look elsewhere..not mentioned in any negotiations previously...so again who is messing who about now.

It was not meant to be an account of me selling and more an example of estate agents, prices and holding a value.
It must be in the manner I write that attracts the glass half spilt merchants

4lex

Moving to Verwood? What does that mean? Property prices may be more attractive in a grotty little town in Dorset, but there isn't space for 'many home owners' to move there.....

ahoy

there are plenty of people with huge city investments who would like to scare property owners into getting out of property and into financial investment. and they often have a big voice in the media. look at the business section of bbc morning news. they always have some horror story about house prices. i prefer to watch what is happening;

before christmas my daughter bought her first house a couple of weeks after it went on the market. just before she moved in in january the house next door went on the market. i went to see her new vase(!) yesterday and noticed that the house next door is sold. not only that, the house the other side went on the market last week and she tells me it was under offer in two days. they all sold for with £1000 of each other, the most expensive last. they are all identical ftb properties. they all sold to first time buyers. the ones who hold the maqrket up.

before christmas we had 3 agents come and value our house. there was a 20% difference between them. last week, 4 months later, we put it on the market privately for the highest figure and had 4 people over at the weekend. they seemed pretty posiitive though i'm not counting and chooks. the people yesterday said it seemed very cheep. they are waiting for the response to the open day they had on saturday and said they would love to be able to phone us back and say they can go ahead.

i know these things change across the country and it depends on the property but i refuse to listen to so called experts who may have an agenda. i also know there are plenty of people on here who have been on the maqrket for ages and are desperate and i pray we won't become one of them. its very early days for us but i certainly don't get the impression that the people who matter, the people who are real live buyers, are full of gloom and reticence in buying because they think prices are going to crash. i'm sure if we could be bothered to search, we could find an article that would suggest price rises.

i offer a big injection of positivity into the housing market in uk. (not oz tho!, selfishly)

bondipom

Estate agents going bust is a big sign.

ahoy

i haven't seen any of those around here. but i've seen loads open over the past few years. i spent 4 years working for one a long long time ago. it has always mystified me how there can be so many in our area. even the villages have one for goodness sake.

FITCHETT FAMILY

Hi all,
I have watched the property market very closely in the last few years and as soon as we decided to emigrate, we thought it the best option to sell our home and move into rented so we were ready for the move to Oz and also because I believed the housing market could'nt continue as at was going.
We still live in the same area and know that our old house is probably worth at least £10k more, however, the problem is'nt how much the agents think they are worth but how much a person is willing to pay!
I have also heard that estate agents are going out of business due to sales of around 2 properties a month.
There are MANY properties in the area that have been on the market since the beggining of last year, they have either been reduced in price or have changed estate agents in the hope of a sale.
I truly feel for those who are stuck with a property that they cannot sell, but my heart really goes out to the poor sods who have mortgaged themselves to the hilt and can bearly afford to live, because when the Property market crashes ( and I truly believe it will ) they will be the ones who are paying for the rest of their lives.
Tina x

RogerUK

I think a so called price crash is highly unlikely. The present stagnant state of the housing matrket is in my opinion media driven for whatever reason. People are not even putting in silly low offers for property which shows lack of confidence and uncertainty in potential buyers. There is no reason to be unduly worried, economy is fine, unemployment is low, jobs market is buoyant, interest rates are still relatively low. Houses are selling, albeit slowly, and prices are not coming down a great deal, certainly in my area (N/E England) I remember 35 years ago when we bought our first house the same worries were flying around about taking out massive (relative to salaries) mortgages and never being able to pay them off etc, etc.
Roger