Bluegrass Lass

Damn, looks like we went back to visit 2 weeks too soon! If we had waited, we could have saved quite a bit of dough!

But one never knows with these things, so I suppose we can only be thankful the exchanged rate didn't worsen while we were over there.

farmerwife

For anyone wanting to buy a flat in the UK it's looking better everyday.
Now no stamp duty under 175,000 sterling.
http://news.bbc.co.uk/1/hi/uk_politics/7592852.stm

Only trouble is - you're right, the sitting in the metal tube and air fares don't help.

(Lansbury - Go Beavs!)

Thydney

How do you work that out? Oil is bought in dollars

Giantaxe

Well, aside from the fact that you're probably going to be buying a depreciating asset.

lapin_windstar

Innit. I would have thought the GBP:USD exchange rate was irrelevant to the price of oil in the US.

Giantaxe

On its own, yes. But if the dollar was getting stronger against a basket of other countries that are major consumers of oil, then the law of supply and demand would cause the dollar price of oil likely to fall, as demand in those countries would be constraijned by local currency price rises. I don't think that's what's happening though; the dollar pound rate seems to being driven by the pound's overwhelming weakness right now as opposed to the dollar's strength. And oil's decline seems to be being caused by a general worldwide weakening in demand from lack of growth/likely recession in some countries.

farmerwife

Ha! yes you're right of course. That's why I was thinking it was getting better everyday. Just let me know when it gets to the bottom

BritishGuy36

Might not be as far away as people think.

Mortgages are already cheaper than they were two months ago and the government seems to becoming (mildly) interested in the housing market (too little too late, but whatever) any may help out sometime soon.

Michael

The UK housing market still seems to be deteriating. The drop in home values are still accelerating on a month to month basis (1.9% last month).

IMO the major European central banks spent too much time over the past year worring about inflation (oil, food, etc.) that they don't have any control over while the US was driving interest rates down causing the USD to weaken. Now that the European economics are slowing significantly and it appears that the US economy is stabalizing, the dollar is strengthing.

I wouldn't be suprised if the USD strengthened to about $1.50 per £1 and to $1.10 per €1 over the next year as the US raises interest rates and the Europeans cut interest rates. Speculators tend to ride a trend. However, it would be doubtful that the USD would remain at those exchange rates for an extended period of time.

Giantaxe

All government schemes to prop up prices will do is prolong the downturn and ultimately likely waste taxpayers money. I doubt the hosuing market will recover until prices revert to something approaching historic norms versus income.

chartreuse

That's OK, just so long as they prop it up until we sell and move over there!

Actually, today's news wasn't bad. The stamp duty break should get the bottom end moving a bit (and will help us as we're hoping to get £170K-ish). The other stuff is aimed at propping up house builders and preventing repos. While it may hurt a bit, by steering FTBs towards new build, it should also help by forestalling any fire-sales of under-priced property.

House values are a funny thing. Ultimately, a house is worth what somebody's prepared to pay for it. In many (if not most) cases, that's whatever the bank is prepared to lend.

It seems to me that, rather than lending less per property, banks are making fewer loans. After all, 95% mortgages are still fairly readily available. That shouldn't drive the price down, yet it does.

Why? IMHO, it's the malign influence of estate agents, who don't have a clue what they're doing, don't give a flying one for their clients and, in a blind panic, are encouraging heavy discounting (both with vendors and by briefing valuers - who ain't that smart either) in a desperate attempt to get some commission, any commission, each month. Remember £20K to you is £200 to an EA.

Giantaxe

If fewer mortgages are being made, obviously the pool of available buyers decreases. House prices are set at the margins, and some people essentially have to sell:- foreclosure, death, divorce, job move, unemployment etc etc, whereas noone has to buy. That pool of "must sell" sellers are chasing a diminishing number of eligible buyers and it is that category of seller that is essentially setting prices - downwards - for the market. And as time goes by, that pool gets larger as the "overhang" of such properties increases as transactions decrease.

Did estate agents any more have a clue when prices were rising rapidly? And yet I didn't hear blaming them when prices were rising. Not that I have much time for used-house salespeople, but such an explanation really is ignoring the reality of the current credit market.

Michael

People tend to blame the messenger. They blame the news media when housing prices drop. They also blame the bears (bad bears) when the equity market drops and the speculators when oil and other commodity prices rise but praise the bears (good bears) for pulling down those prices.

Without all these bad people, excessive overpricing and market crashes would occur much more frequently and with worse consequences than we currently experience.

chartreuse

I was actually making a point that EA's often have interests which conflict with those of their clients.

Thanks for calling me a moron who knows nothing about markets, though.

penguinsix

It's at 1.76 now.