House prices falling in Britain already!

[The Magnificent Goldberg]

House prices fall by 2.5%

Press Assoc. - 49 minutes agoHouse prices have dived by 2.5% during March, their biggest monthly fall since the 1990s house price crash.

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Britain's biggest mortgage lender Halifax said the drop was the largest since September 1992.

House prices are now just 1.1% higher than they were a year ago, the slowest rate of annual growth for 12 years.

Martin Ellis, Halifax chief economist, said: "This fall is continuing the pattern whereby the market is readjusting. Sellers are having to adjust the price they ask for their properties."

But he said the group still expected there to be only a "modest fall" in house prices for the whole of 2008.

He added that the most recent drops needed to be seen in the context of house price gains of 51% during the past five years and rises of 171% during the past 10 years.

The group said homes had lost 1% of their value during the first quarter of 2008, to leave the average property costing £191,556.

But there has been huge regional variation within this figure, with house prices in the West Midlands falling by 5% during the first three months of the year, while property prices have dropped by 4.7% in Wales and by 2.6% in the South West.

There were also price falls of 1.5% in Northern Ireland and drops of 0.5% in both Yorkshire and the Humber and the North West. But at the other end of the scale house prices rose by 2.2% in the East Midlands, 1.6% in Greater London and by 1.4% in East Anglia.

House prices are now lower in three regions of the country than they were a year ago, with the average home costing 5.3% less in Wales, 3.7% less in the West Midlands and 3.3% less in the South West.

Link

http://uk.news.yahoo.com/pressass/20080408...25-6323e80.html

Wales, as ever, hardest hit. Thank God we won the Rugby Grand Slam!

MG

[Christiern]

So Britain, too, has been Bushed.

[papsrus]

This, of course, is good news for buyers, and should entice some activity. ... I'm in the process of buying a home (in the U.S.) and was able to secure a very favorable deal, including the seller agreeing to pay closing costs (which saves me about $5,000) and extend me some flexibility on the closing date (which I need due to an unrelated issue). They basically accepted my terms on a counteroffer without further negotiation.

Locked in a nice interest rate, too. ... All in all, a bit of a sweet spot for buyers.

I will say that while looking around I did find home prices were all over the map. Sale-by-owner prices are still way too high, from what I saw. But I expect they always are.

[sidewinder]

I thought that this would have happened over here at least 5 years ago ! Things have been kept artificially buoyant by banks and building societies who have been basically loaning money to pretty well anything which has a pulse (and a lot which hasn't). I've thought for some years that this will end in tears and - what do you know..

Lending criteria now back to where we were around 12-15 years ago. No bad thing IMO - too many 'amateur landlords' and people in over their heads.

[sidewinder]

So Britain, too, has been Bushed.

We've been "Blaired" - or is it "Browned"? Either way it comes out as a turd.

[BillF]

So Britain, too, has been Bushed.

We've been "Blaired" - or is it "Browned"? Either way it comes out as a turd.

[The Magnificent Goldberg]

I thought that this would have happened over here at least 5 years ago ! Things have been kept artificially buoyant by banks and building societies who have been basically loaning money to pretty well anything which has a pulse (and a lot which hasn't). I've thought for some years that this will end in tears and - what do you know..

Lending criteria now back to where we were around 12-15 years ago. No bad thing IMO - too many 'amateur landlords' and people in over their heads.

I tried for over a year to dissuade my son-in-law not to go in for a self-build house in beautiful rural Wales, to no avail - they'll be laying the foundations in a couple of weeks. I think the eventual tears might be ours. You can't tell kids anything, can you?

MG

[sidewinder]

I blame it all on damn Northern Rock and other reckless banks. The way they were giving out 5x+ income multiple mortgages etc. to the self employed and amateur landlords on the basis of self-certification was totally reckless. Now we will be back to 3x multiples maximum with bigger deposits and - thanks to these bozos - higher interest rates for all. And that useless CEO gangster guy Adam Thingy gets a £1M payoff for setting their 'strategic direction' which was a large contributor to this? Outrageous

and meanwhile the FSA, supposedly 'policing' all of this - were sat on their butts, attending stratergic direction seminars, going to lots of nice jollies and freebies etc. Can the lot of them and put them in concrete jackets !

This will come back to bite Gordo big time.

Edited April 10, 2008 by sidewinder

[sidewinder]

Time for a cup of this..

Strange Brew

[BillF]

Time for a cup of this..

Strange Brew

Down with Adam Thingy

[porcy62]

House pricing has stopped over here, but not really falling. IMHO until world stock markets are so uncertain, and depressed, 'brick' as we call investing in houses and real estates, is still regarded as secure investment. Lots of people retreat from financial market, funds are really down at the moment, and put money into 'brick'.

Edited April 11, 2008 by porcy62

[ejp626]

House pricing has stopped over here, but not really falling. IMHO until world stock markets are so uncertain, and depressed, 'brick' as we call investing in houses and real estates, is still regarded as secure investment. Lots of people retreat from financial market, funds are really down at the moment, and put money into 'brick'.

Of course, gold is also a haven during uncertain times. I've decided to combine the two and build the extension of my house out of some of these gold "bricks" laying around:

[porcy62]

House pricing has stopped over here, but not really falling. IMHO until world stock markets are so uncertain, and depressed, 'brick' as we call investing in houses and real estates, is still regarded as secure investment. Lots of people retreat from financial market, funds are really down at the moment, and put money into 'brick'.

Of course, gold is also a haven during uncertain times. I've decided to combine the two and build the extension of my house out of some of these gold "bricks" laying around:

Nice, my suggestion is to double check foundations, otherwise the precious house would sink in the ground like Titanic.

[marcello]

1% is not really much of a drop in prices, MG.

I think you'll see that after a year or so of stagnant prices, a real measurable decline.

Fuel prices and the demand for raw material and resourses in China, will push the world enconomy into a recession soon enough, and then you will really see a real decline in real estate prices. And everything else, including stocks.

Here, in highly populated and developed areas, there's been a 20% or more drop.

I'm in the housing business and have been through this before. The difference this time is that interest rates are very low.

I don't think that building is a bad idea, as long as your son in law doesn't overpay for the land.

Raw land, in the right location, survives everything.

[ejp626]

House pricing has stopped over here, but not really falling. IMHO until world stock markets are so uncertain, and depressed, 'brick' as we call investing in houses and real estates, is still regarded as secure investment. Lots of people retreat from financial market, funds are really down at the moment, and put money into 'brick'.

Of course, gold is also a haven during uncertain times. I've decided to combine the two and build the extension of my house out of some of these gold "bricks" laying around:

Nice, my suggestion is to double check foundations, otherwise the precious house would sink in the ground like Titanic.

No problem -- I'll just convert it to a pool then.

[BERIGAN]

So Britain, too, has been Bushed.

I guess using the same logic, you need to give credit to Bush for the high values of real estate in the past....

[papsrus]

So Britain, too, has been Bushed.

I guess using the same logic, you need to give credit to Bush for the high values of real estate in the past....

[The Magnificent Goldberg]

1% is not really much of a drop in prices, MG.

That's 1.1% in three months.

I think you'll see that after a year or so of stagnant prices, a real measurable decline.

Fuel prices and the demand for raw material and resourses in China, will push the world enconomy into a recession soon enough, and then you will really see a real decline in real estate prices. And everything else, including stocks.

I'm sure you're right there. I've been expecting this for a year or two.

Here, in highly populated and developed areas, there's been a 20% or more drop.

I'm in the housing business and have been through this before. The difference this time is that interest rates are very low.

In the long term, of course, bricks & mortar is a fairly sound investment. Buying at the wrong time, and then having to sell at the wrong time can make that go terribly wrong, of course.

I don't think that building is a bad idea, as long as your son in law doesn't overpay for the land.

Raw land, in the right location, survives everything.

I don't think he paid too much for the land, though I don't have any evidence of that - nor the other way. Timing is awkward, though, for them. The project is about 6 months behind. They'd budgeted for paying about $1,800 a month rent for nine months. So at the moment it's going to cost them nearly eleven grand more than they thought - without further slippage.

And it's a long commute for both of them - to different towns, so no saving on petrol. And their older son would have another long commute, in yet another direction, to school. The younger one would go to school locally until he's eleven. The original idea was to buy and build the place and sell at a profit. That's gone for a burton now, as I said it would. But the commuting position is so difficult - and grandmothers no longer available to pick the kids up from school - that I can't really see them being able to sustain it in the long term. Unless my daughter, who's an actuarial controller and earns a bit more than he does, can swing working from home four days a week.

I can see chickens coming to roost on our and their other grandmother's doorstep in terms of looking after the kids.

MG

[marcello]

I see. Like I said, location is everything to consider, including your lifestyle.

By the way, what's a "burton"?

[The Magnificent Goldberg]

By the way, what's a "burton"?

Oh, I think in America I've seen the expression "going south". I think it means the same thing.

MG

[papsrus]

From today's NY Times:

Housing Woes in U.S. Spread Around Globe

By MARK LANDLER

Published: April 14, 2008

DUBLIN — The collapse of the housing bubble in the United States is mutating into a global phenomenon, with real estate prices swooning from the Irish countryside and the Spanish coast to Baltic seaports and even parts of northern India.

This synchronized global slowdown, which has become increasingly stark in recent months, is hobbling economic growth worldwide, affecting not just homes but jobs as well.

In Ireland, Spain, Britain and elsewhere, housing markets that soared over the last decade are falling back to earth. Property analysts predict that some countries, like this one, will face an even more wrenching adjustment than that of the United States, including the possibility that the downturn could become a wholesale collapse.

To some extent, the world’s problems are a result of American contagion. As home financing and credit tightens in response to the crisis that began in the subprime mortgage market, analysts worry that other countries could suffer the mortgage defaults and foreclosures that have afflicted California, Florida and other states.

Citing the reverberations of the American housing bust and credit squeeze, the International Monetary Fund last Wednesday cut its forecast for global economic growth this year and warned that the malaise could extend into 2009.

Continued here

[sidewinder]

Hmm - I thought the rises in house prices here were pretty daft but the Republic of Ireland (and N.I. for that matter) has been off the scale. Considering the relatively low base at which they started from in the 1990s, it could be a shocker.

Spain too has been a total cowboy market. Don't envy any Brits with 2nd places over there..

Edited April 14, 2008 by sidewinder

[A Lark Ascending]

I recall driving round Ireland in 1989 and seeing 4 bedroom bungalows with lots of land going for the same price I bought my two bedroom terrace with small garden a couple of years later.

Subsequent visits have shown Ireland to be a building site with estates and individual houses springing up like mushrooms. Sounds like a lot of people are going to get caught out.

[sidewinder]

Yep, a friend of mine who moved over to Canada around the same time had a lovely Georgian detatched house in Dublin which he ummed-and-ahed over and decided to keep, renting it out. At the time it was worth maybe £70K but must be around the Million mark now, at least. A good decision on his part (assuming he kept it and possibly returned back over there).

[sidewinder]

Subsequent visits have shown Ireland to be a building site with estates and individual houses springing up like mushrooms. Sounds like a lot of people are going to get caught out.

Weren't they planning to build a major motorway and development over that sacred hill-top near Dublin? The Gods have spoken..