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House price crash

Maybe I'm stupid, but don't most people buy a house if they have a job? Isn't house price therefore most related to unemployment figure?
 
from the economist
http://www.economist.com/business-finance/displaystory.cfm?story_id=15911113
The story is different in Britain. British house prices had risen by nearly 10% in the year to the end of the first quarter of 2010, but the country’s price-to-rent ratio still outstrips its long-term average by nearly a third. This pattern—of prices rising in markets where houses still look overvalued—is also seen in Hong Kong, Singapore, Australia, Sweden and Canada. In France, Italy, Spain and Ireland, houses do appear overpriced relative to their earnings potential, but at least prices there are still falling.
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201016FNC176.jpg


according to the table UK houses are overpriced by 31% using the price-to-rent ratio - australias not looking too good either, nor france
 
So house prices fall... or rents go up?

There are lots of ways of evaluating house prices. Rental yields are just one piece of a much bigger puzzle.
 
My mums trying to sell the house i gerw up in at the moment due to health problems etc. Not going to be good for her either way. :(
 
Thanks, she should be allright as shes got quite a bit of cash but she has lost an awful lot of money in the last year with the value of savings going down etc, partly due to this fucking bank bailout, not to mention some other family stuff that i'd prefer not to talk about on here tbh.
 
Oops I started a new thread about that guardian article not realising you were talking about it here, although most of what I said in the thread was to do with the non-housing aspects of that article.
 
Why would a Tory government turn on the 68% owner occupiers in the housing market who make up their core support though? Far more likely they will put pressure on the UK banks to extend and pretend while using their increasingly necrotic balance sheets as an excuse for further austerity measures. (because the guarantees are a public sector liability).
 
The problem is that demand for housing, especially in the South East, is very high allied with low interest rates which means that if you have any cash it makes sense to want to get it into bricks and mortar, especially since its obvious that all Governments will be wanting inflation to stay relatively high to help them eat away at the debt.

Also planning consent takes so long to get, espcially when it comes to the whole 'garden' developement side of things, that its putting builders off and so supply still remains very low.

The ironic thing is that if the banks did loosen up on their lending criteria then prices would rocket due to the amount of people coming in to the market. If people can get access to funding then its very low priced and thats always going to encourage house prices to go up.
 
I think house prices will come down quite a bit more in the UK.

Things simply got so far "out of whack" in the last ten years that so many people now just cannot afford to buy anywhere.

The banks are not willing (and may soon not be allowed) to lend very high multiples of people's salaries any more, which will push prices down further.

All of that said, unless some drastic thing happens (like a sudden rise in interest rates) I can see prices just slowly sliding relative to other rising costs, and then "bumping along the bottom" rather than "crashing" in a dramatic short period.

Giles..
 
So ska, are you going to put some money down as a bet? I'm pretty sure you could find a market for a bet on house prices falling somewhere like betfair.

Re: the sale-rent ratio - rental values in Australia have been rising for a couple of years, they're just not keeping pace with the rise in house prices. I know. I've looked.
 
Or they went up 0.1 %. http://www.nationwide.co.uk/hpi/

ETA: In reality, with these kinds of surveys, as long as their methodologies are good, what you should do is add them together. Don't know how much weighting to give each, though. I suspect the Nationwide survey is more extensive, so should be given more weight. Lender surveys also do not take into account cash buyers, who have been a larger proportion of the shrunken market in the last couple of years.
 
This site is the goldmine for house price indices. It has them all.

Their latest thing is to include a house price predictor that is actually based on more than just a wet finger in the air and an "Oooh, I reckon..."

As of 8th September, i.e. last time's Halifax data, not October's, it looked like this:

khp_aug2010.png
 
i would say the house price crash was imminent . The Tories are gonna cut housing benefit so landlords will be looking to sell. No one will have a job so they can't rent to those either. People will lose their jobs and homes, and the slightest rise in interest rates will spell doom
 
trevhagl said:
i would say the house price crash was imminent . The Tories are gonna cut housing benefit so landlords will be looking to sell. No one will have a job so they can't rent to those either. People will lose their jobs and homes, and the slightest rise in interest rates will spell doom
Click to expand...

Forget the serious analysis -- trev knows The Truth.
 
I would think that history shows us that nobody can tell what will happen in the short term. Every single 'expert' predicted falls for 2009. Every single 'expert' was wrong.
 
trevhagl said:
ok then you tell me how those factors are gonna stable the housing market
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For a start, I think you are massively overstating the impact of the change on housing benefit, probably because one way or other it is something that you can see up close. Things that are close always look bigger. But really, the numbers affected will be a small percentage of all those on housing benefit, who are just a percentage of those who rent, who are just a percentage of households. I'd be surprised if as many as 1% of homes in the UK end up in a fire sale as a result of the change. That's not significant enough to have a noticeable impact on the overall market, although it might cause a dent in a particular sector of the market.
 
Also, I can tell you first-hand that upwards pressures on rents haven't been so great for years, probably because nobody is buying or selling right now. Agents are putting rents up by 10%+ on stuff coming in compared to before the summer. Meanwhile the landlords' mortgages have never been lower, due to low interest rates. That hardly speaks of landlords needing to get out while the getting is good.
 
kabbes said:
Also, I can tell you first-hand that upwards pressures on rents having been so great for years, probably because nobody is buying or selling right now. Agents are putting rents up by 10%+ on stuff coming in compared to before the summer. Meanwhile the landlords' mortgages have never been lower, due to low interest rates. That hardly speaks of landlords needing to get out while the getting is good.
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I'm looking at rents at the moment, fuck me it's expensive. Was hoping to rent a place to myself, but it's gonna have to be another house share.
 
It's a weird lop-sided market at the moment. If you have enough for a big deposit, now is a great time to buy, in fact. Meanwhile, loads of first-time buyers remain excluded. Certainly, there will be no panic-selling for as long as the base rate stays low.
 
i do think that nearly a million losing their jobs will have a huge impact on the housing market, thousands of these will be made homeless, thats thousands of properties onto the market
 
trevhagl said:
i do think that nearly a million losing their jobs will have a huge impact on the housing market, thousands of these will be made homeless, thats thousands of properties onto the market
Click to expand...

That is what has happened in the past, but it may not happen this time. You can get your interest paid by social security, remember, and at the moment at least, lenders are more than willing to accommodate such changes in circumstances – it's not in their interests to repossess.
 
trevhagl said:
i do think that nearly a million losing their jobs will have a huge impact on the housing market, thousands of these will be made homeless, thats thousands of properties onto the market
Click to expand...
Being made redundant doesn't necessarily mean losing your home, particularly with a redundancy payoff. Those most at risk of losing jobs are probably those in their 50s, who are likely to have little or no mortgage remaining if they are a home-owner.

Certainly, at the moment, repossession rates are at historically low levels.
 
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