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Housing crash in London - when will it recover?

Housing crash in London - when will it recover?

Old Aug 12th 2008, 11:55 pm
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Cool Housing crash in London - when will it recover?

Hi

We have property in South London and we are trying to sell it. We have reduced the price already because of the failing market.

How long do you think it would be before the market picks up again, would it be months, years?? Any ideas.

If we cant sell it we are thinking of renting it out, but do not want to make further losses if the market takes years to recover

Thanks
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Old Aug 13th 2008, 12:43 am
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Default Re: Housing crash in London - when will it recover?

Originally Posted by jacknscoob View Post
Hi

We have property in South London and we are trying to sell it. We have reduced the price already because of the failing market.

How long do you think it would be before the market picks up again, would it be months, years?? Any ideas.

If we cant sell it we are thinking of renting it out, but do not want to make further losses if the market takes years to recover

Thanks
If you can cover the mortgage and you're not relying on the equity in the house to fund the move here, the I'd rent it. Apart from anything else, you might find you hate Oz and are glad to have your old house to return to.
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Old Aug 13th 2008, 3:52 am
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Default Re: Housing crash in London - when will it recover?

Originally Posted by jacknscoob View Post
Hi

We have property in South London and we are trying to sell it. We have reduced the price already because of the failing market.

How long do you think it would be before the market picks up again, would it be months, years?? Any ideas.

If we cant sell it we are thinking of renting it out, but do not want to make further losses if the market takes years to recover

Thanks
There have been quite a number of articles on the subject recently including the FT, last year the OECD put out a report indicating that UK house prices where overvalued by around 45%.

The UK (global) housing bubble has been so extreme, and given the current economic climate it is quite likely that it will over correct past the required 45% (as is usual in the boom/bust cycles). Many economists and commentators do not expect a bottom to be reached until 2010/2011.
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Old Aug 13th 2008, 4:00 am
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Default Re: Housing crash in London - when will it recover?

Originally Posted by jacknscoob View Post
Hi

We have property in South London and we are trying to sell it. We have reduced the price already because of the failing market.

How long do you think it would be before the market picks up again, would it be months, years?? Any ideas.

If we cant sell it we are thinking of renting it out, but do not want to make further losses if the market takes years to recover

Thanks
Every day the numbers seem to be looking worse. Big inflation numbers yesterday mean interest rates less likely to be dropped any time soon so housing finance less affordable, if you can get a loan at all. Plus forecasts of less than 1% GDP growth for the next 2 years = pretty miserable economic conditions, job losses = further deterioration in housing market. Personally I don't see the time to any turnaround being mesaured in months.
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Old Aug 13th 2008, 5:02 am
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Default Re: Housing crash in London - when will it recover?

Originally Posted by bcworld View Post
Every day the numbers seem to be looking worse. Big inflation numbers yesterday mean interest rates less likely to be dropped any time soon so housing finance less affordable, if you can get a loan at all. Plus forecasts of less than 1% GDP growth for the next 2 years = pretty miserable economic conditions, job losses = further deterioration in housing market. Personally I don't see the time to any turnaround being mesaured in months.
I'm still amazed at how quickly the UK economy seems to have come undone. This time last year it was flying, and now it's more like a Banana Republic


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Old Aug 13th 2008, 5:20 am
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Default Re: Housing crash in London - when will it recover?

Originally Posted by jacknscoob View Post
Hi

We have property in South London and we are trying to sell it. We have reduced the price already because of the failing market.

How long do you think it would be before the market picks up again, would it be months, years?? Any ideas.

If we cant sell it we are thinking of renting it out, but do not want to make further losses if the market takes years to recover

Thanks


Based on 4 previous UK housing boom/busts we can see that in the bust always goes below the long term trend and bottoms at about the point of the previous boom. We still have a long, long way to go.
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Old Aug 13th 2008, 5:25 am
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Default Re: Housing crash in London - when will it recover?

Originally Posted by ossigeno View Post
http://www.housepricecrash.co.uk/gra...d/homepage.png

Based on 4 previous UK housing boom/busts we can see that in the bust always goes below the long term trend and bottoms at about the point of the previous boom. We still have a long, long way to go.
This is interesting - anyone got one for Australia?
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Old Aug 13th 2008, 5:26 am
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Default Re: Housing crash in London - when will it recover?

Originally Posted by NKSK version 2 View Post
This is interesting
Damn straight! Average house price of 120k in about 2015 - I'm going back! No matter how much of a banana republic it is!
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Old Aug 13th 2008, 5:26 am
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Default Re: Housing crash in London - when will it recover?

Originally Posted by NKSK version 2 View Post
This is interesting - anyone got one for Australia?
I was thinking the same thing...


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Old Aug 13th 2008, 5:28 am
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Default Re: Housing crash in London - when will it recover?

Originally Posted by ossigeno View Post
http://www.housepricecrash.co.uk/gra...d/homepage.png

Based on 4 previous UK housing boom/busts we can see that in the bust always goes below the long term trend and bottoms at about the point of the previous boom. We still have a long, long way to go.
Do you think that the long term trendline is accurate - mathematically?
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Old Aug 13th 2008, 10:42 am
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Default Re: Housing crash in London - when will it recover?

Originally Posted by Hutch View Post
If you can cover the mortgage and you're not relying on the equity in the house to fund the move here, the I'd rent it. Apart from anything else, you might find you hate Oz and are glad to have your old house to return to.
I'd totally agree with this; it is a prudent option. Try to switch to interest only - it won't matter for a couple of years. On the other hand you need to be pretty confident you can rent your place with minimal vacancy and you need a brilliant agency.
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Old Aug 13th 2008, 4:14 pm
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Default Re: Housing crash in London - when will it recover?

Originally Posted by jacknscoob View Post
Hi

We have property in South London and we are trying to sell it. We have reduced the price already because of the failing market.

How long do you think it would be before the market picks up again, would it be months, years?? Any ideas.

If we cant sell it we are thinking of renting it out, but do not want to make further losses if the market takes years to recover

Thanks
30% off minimum from peak (summer 2007) to trough (summer 2010), then stagnant for two or three years, then gradual recovery.

The MPC's gross negligence in refusing to raise IRs in order to prop up this crashing housing market is of great interest to me, not least because the RBA is thinking of committing suicide by the same methods. Inflation nearly at 5% in UK at at 17 year-high in Australia requires IR rises to cool it. Will they do it? The MPC knew the latest inflation figures and they still decided to hold rates. Shocking. What they hoping, of course, is that the dropping oil prices will hit the economy and cool it off and they can cut rates and save the crashing housing market. Wrong. Sliding oil prices and a similar reduction in the cost of precious metals all points towards recession and possibly a general deflation in the economy.

Some serious people are talking about over 50% coming off house prices from peak, in the UK and Australia, and when I'm in the right mood I can go along with this - far worse happened in Japan after the 1990 crash.

An interesting side-effect is that everybody selling their houses is deciding to let them out instead. I hope Britain suddenly has an influx of millions of people looking for houses to rent because otherwise the maths doesn't add up.

In answer to your question, my personal view is that dependent on property type and region, a recovery is not likely in years, and I don't think house prices in the UK will reach the same value in real terms in decades.
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Old Aug 13th 2008, 4:18 pm
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Default Re: Housing crash in London - when will it recover?

Originally Posted by NKSK version 2 View Post
Do you think that the long term trendline is accurate - mathematically?
The trendline is only mathematically accurate up to the present, anything after that is speculation. However, it might be possible to make an educated inference from this data, the conclusion of which might lead one not to purchase a house any time soon..........
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