Housing market slowdown?

[der-bomber]

So you have a vested interest then ?

So how can you make a subjective judgement ?

So-called 'in the know professionals' are usually the ones who get it most wrong from my experience.

Interest rates will start rising very soon, accelarating the cyclical 'panic phase'.....

 

[The Fat el Hombre]

What about when the interest rates go up? House prices will get this again won't they?

 

[johnmc]

So those in the game and those not all agree though that we are not at the bottom yet?

 

[Benarbia]

Low rates, low house prices

high rates high house prices

 

[The Fat el Hombre]

I don't see how house prices can rise if interest rates go up at this point in time (or any time soon)?

 

[foley87]

if interest rates go up half the country will find themselves reposessed

not gonna happen for a good couple of years at least

 

[der-bomber]

The Bank of England monetary committee control interest rates, so they can no longer be used as a political tool by the government.

Rates will start to rise in order to stimulate inflows of cash into the banks and to encourage savers.

The clowns who took out 125 % self cert mortgages and their ilk are fucked....

 

[The Fat el Hombre]

if interest rates go up half the country will find themselves reposessed

not gonna happen for a good couple of years at least

Hold on a sec, what about the people who have taken out fixed rates now? When they come round to renwewing the interest rates will have gone up and then they'll get repossessed. Unless house prices come down then the low interest rate is only delaying the inevitable

 

[Prestwich_Blue]

The Bank of England monetary committee control interest rates, so they can no longer be used as a political tool by the government.

Rates will start to rise in order to stimulate inflows of cash into the banks and to encourage savers.

And if cash comes in then they have to lend it out as well. Hence the supply of credit will increase and prices will respond.

Prices are a factor of demand, supply, the state of the economy and the availability of credit, mainly the latter. When credit tightens they go down and when it's more available they rise. So do rates, in order to control inflation and the supply of money. Signs are that the tightening is ending but we're a long way off the freely available money we had in the last few years.

House prices also move in a band of affordability. Two years ago they were at the top of that band and now they've moved down. Unless the economy collapses completely then they will stabilise lower down that band and there are indications that they are in or close to that position now.

 

[The Fat el Hombre]

http://news.bbc.co.uk/1/hi/business/8002664.stm

Predictions

So where are prices heading?

Even if the economy was not shrinking, prices would still be hindered by the lack of mortgage funds and the consequent choking of sales.

Several of our commentators gave up making price predictions at the end of last year, citing the inherent unpredictability of the market.

But for those bold enough to have a go, the outlook has not changed much in the past few months.

"Prices will weaken further over the next three or six months," says Simon Rubinsohn of Rics.

A few experts are happy to be more specific.

• Ray Boulger - "a fall of 5% this calendar year."

• Ed Stansfield - "down 20% this year and 10% next year."

• Jonathan Davis - "a 40% drop from September 2007 to the end of 2010 or 2011."