Housing market slump

We wouldn't get enough rent to cover the mortgage, let alone the extra costs of a letting agent etc... I would rather sell now and unload it due to that. We will consider lowering the price again, but we are close to losing money on it if we lower much more and we have to allow for negotiation.

We're at the end of our contract with the current estate agent, so we may change agents to see if we can get more viewings. Although, i am not expecting too much right now, i think it would be easier to sell while we are living here rather than when we've already gone and that won't be long after the new year.

i think what I have learned is buying and selling houses is not fun and I don't know how some people make a living out of it, it would drive me insane!

We changed agents and still no luck.  They have told me that people are afraid the housing market is going to crash.  They cannot even find people for viewing for any of their homes.

Trust me you would not want to rent the house out anyhow.  Been there, still doing it though.  It is a BIG headache.  If you can afford to pay the mortgage while you're in the UK go ahead and leave.  It is actually better to have the house empty, although agents have their opinions.  Lowering the price will not help as the market is slow.  Although if you go too low you will lose lots of money as you mentioned.

Back to letting, you only have to make 80% of the mortgage to end up even due to taxes.  For example you don't have to rent it out for 800 dollars if your expenses(with mortgage) is 800, you could actually rent for less.  It may be a headache but it may be your only option in the end.  Put it back on the market once the housing market looks better.

We wouldn't get enough rent to cover the mortgage, let alone the extra costs of a letting agent etc... I would rather sell now and unload it due to that. We will consider lowering the price again, but we are close to losing money on it if we lower much more and we have to allow for negotiation.

We're at the end of our contract with the current estate agent, so we may change agents to see if we can get more viewings. Although, i am not expecting too much right now, i think it would be easier to sell while we are living here rather than when we've already gone and that won't be long after the new year.

i think what I have learned is buying and selling houses is not fun and I don't know how some people make a living out of it, it would drive me insane!

My neighbour had a beautiful large victorian house with a dining kitchen, 4 large bedrooms, a utility room and a storage cellar.  It is in a really popular neighbourhood.  It was priced at $185,000 which was below market value.  It took 1.5 years to move  It went on the market it January 2006 and she moved on Monday.  She was going to move 9 months ago but the first person who made an offer pulled out the day before they were going to sign.  She was all packed and ready to move but the chain broke and she had to start over.


We want to move back to the in 2008 but I am not hopeful.  We cannt afford to go if we don't sell the house.

I think it's the media's fault.  All the doom and gloom that everyone is projecting.  It's what drives the RE market unfortunately.  If I don't sell my house I'm just going to hand it over to the bank.  The hell with it all.

I think it's the media's fault.  All the doom and gloom that everyone is projecting.  It's what drives the RE market unfortunately.  If I don't sell my house I'm just going to hand it over to the bank.  The hell with it all.

I don't think that at all.  I think it's simply become entirely affordable for an increasing number of people - either to shift to a different house and increase their mortgage or to buy at all.

People are getting sick of borrowing stupid sums of money, or simply can't afford the repayments and just staying put.

What first time buyers are generally having to club in with mates or buy with parents so they're often looking at flexible properties which allow for this.

I know a rather large number of people who are literally trapped in their homes, unable to downsize or upsize because they can no longer afford it or are now too close to retirement age to commit to an increase in mortgage.

I don't think that at all.  I think it's simply become entirely affordable for an increasing number of people - either to shift to a different house and increase their mortgage or to buy at all.

People are getting sick of borrowing stupid sums of money, or simply can't afford the repayments and just staying put.

What first time buyers are generally having to club in with mates or buy with parents so they're often looking at flexible properties which allow for this.

I know a rather large number of people who are literally trapped in their homes, unable to downsize or upsize because they can no longer afford it or are now too close to retirement age to commit to an increase in mortgage.

Along with house prices having risen way out of proportion with inflation and wage increases, as well as increasing interest rates and mortgage lenders tightening lending requirements as a result of sky-rocketing debt and people defaulting on loans.

I think it's the media's fault.  All the doom and gloom that everyone is projecting.  It's what drives the RE market unfortunately. 

I thought I would jump in here, I totally agree with this view above.  If the media carry on talking up the housing slump, they will talk us straight into a recession.  At the end of the day, the housing market is driven by confidence and the media right now is knocking that confidence.  I know plenty of people at work who are now just holding back from buying a new house because they want to wait until they see what the housing market does, they are making this decision based on media reports and NOT if they can afford it or not!!

Lets remember the root cause of this slump, that being the US Sub Prime market, this unknown debt knocked bank confidence and they started to not lend to each other.  This in tern caused the media to quote a so called credit crunch.  Next Northern Rock almost goes belly up caused mainly by a lack of bank confidence to lend to each other.  This then knocked consumer confidence and then "hey presto" the housing market slows and the media starts reporting wild drops of up to 30% next year!!

Will the market crash, I doubt it, as I feel it would bring down 50% of the nation who have over borrowed, but I do think however, that we will see a drop in housing prices.  That said, talking to my estate agent last week he said that the 1st time buyer market is still moving along fairly well, its the 2nd and 3rd time buyers who are not buying or for that matter selling, hence the situation Pittpanther and I have found ourselves in.

If I don't sell my house I'm just going to hand it over to the bank.  The hell with it all.

Same here - don't wanna do it and will do everything in my power not to do it, but if its a choice between living a life in America and moving on with our life together or paying a mortgage over here (5000 miles from where I will be living) and having no clue when or if it will end, I'll be handing the keys back to !!

I know plenty of people at work who are now just holding back from buying a new house because they want to wait until they see what the housing market does, they are making this decision based on media reports and NOT if they can afford it or not!!

While you may personally know some people who can afford to buy a home but choose not too, there are many people in the UK who cannot afford to own their own home, myself included.

There is a lot of research verifying this, but if I quote something that was reported in the press you'll say that it's biased. I have access to market intelligence reports through work, but I can't post directly from them on this message board. (I am a researcher for an insurance company; one of the products I work with is mortgage life insurance.)

While you may personally know some people who can afford to buy a home but choose not too, there are many people in the UK who cannot afford to own their own home, myself included.

There is a lot of research verifying this, but if I quote something that was reported in the press you'll say that it's biased. I have access to market intelligence reports through work, but I can't post directly from them on this message board. (I am a researcher for an insurance company; one of the products I work with is mortgage life insurance.)

In no way am I saying that some people can not afford to get onto the property ladder, especially in the South East BUT if this was true for everybody UK wide we would of seen a downturn a long time back - Its basic economics I'm afraid, If Prices are to high, you get no buyers, therefore prices drop.  Up until last month this wasn't the case and buyers were still there.

I come back to my point about confidence, right now the downturn is confidence fueled and nothing to do with prices.  The buyers are still out there but are waiting to see what happens, after all why buy now when tomorrow you could buy the same thing for 5% less.  If I were in the buyers market right now, I would be doing the same thing.

If you ask me the biggest risk right now is the UK's own Sub Prime problem which has not yet developed.  Due to the downturn in bank confidence, they are not lending as much and not lending too as many people. 

This will affect people who come out of their fixed term low rate mortgages over the next 12-24 months.  Normally they would refinance and get either a mortgage costing the same or even cheaper than the original.  The reality now is that the cost of borrowing has gone up therefore even if they can get a new mortgage, the cost will of gone up, this could lead to many defaults and then the domino effect really starts.

I thought I would jump in here, I totally agree with this view above.  If the media carry on talking up the housing slump, they will talk us straight into a recession. 

Not to be pedantic, but a true recession is the result of a combination of forces beyond solely media speculation, although investor confidence does play a role.

Inflation, of course, which is beyond the control of even many governments, plays a huge role, for example, as do other factors such as high unemployment and exogenous forces such as oil prices, weather conditions or war.

And whilst the true causes of recession are still debated among economists, they go beyond a few news reports, especially as for every report you hear about a slump, there's another trumpeting a rise in prices.

Recessions tend to be cyclical, and will usually at some point happen to even the most solid of economies, although government intervention can smooth things over significantly.

I think many people are now unable to afford to risk the property market at this time.  They simply cannot afford to borrow enough to buy at all, or even to downsize.

Many retirees who own their homes outright are in such a predicament.

 That said, talking to my estate agent last week he said that the 1st time buyer market is still moving along fairly well, its the 2nd and 3rd time buyers who are not buying or for that matter selling, hence the situation Pittpanther and I have found ourselves in.

Indeed!  I agree.

This is certainly the case with my ILs, who own their own outright, but prices have risen such that even if they sold, they could not move to a property which would suit their needs - ground floor, driveway (they have mobility issues), large bathroom (again, mobility issues), at least two bedrooms.

So they are staying put.

Their present house is a three-bed semi in a brilliant catchment area of Edinburgh.

And whilst the true causes of recession are still debated among economists, they go beyond a few news reports, especially as for every report you hear about a slump, there's another trumpeting a rise in prices.

Yes.

Hiya

Just saw the latest posts to this -

I don't think the 'Media' is the cause of the Property price rise/crash/fall/market slump. As already mentioned it's a combination of factors. The Media reports on happenings and depending on where you look and read etc, there are plenty of opinions around.

The place where market forces are generated as such, is on the trading room floors of the various large stock exchanges around the world. What happens in there will 'ripple effect' outwards, the first part of that ripple being reports internally, then between companies etc - it'll then hit the outside world, where the first to pick up on the 'ripple' are/is the Media.

The RBS group is due to announce a trading update this week (thrusday) - currently only RBS themselves know whats in it - is it upbeat? is it downbeat? is it treading water? etc etc - the report will be made public and the stock markets will 'react' (more than likely it's going to contain some warnings and generally downbeat news - but who knows!!)

Add in the larger economic picture, oil prices, political turbulence etc etc you can see that those factors also have a significant bearing. Add in the factor of Consumer confidence, which historically in the UK has always been high (hence all the high prices for pretty much everything) and the 'cultural' indent of the UK to borrow borrow borrow with not much thought about paying back, it's easy to see that the government, the stock markets, and economist 'hope' that the slowdown is a gradual one over the next year or so, and that there's not a repeat of the 89 'crash' - It'll be interesting to see the retail figures after christmas to see if any of the 'warnings' not to overspend this christmas have/did sink into the minds of the british consumer.....

Cheers, DtM! West London & Slough

I thought I would jump in here, I totally agree with this view above.  If the media carry on talking up the housing slump, they will talk us straight into a recession.

I'm guessing prices out of whack with income and raising interest rates have something to do with it too.

Housing market is to some degree about confidence, but it is also a matter of fundamentals such as price as a product of annual income and availability of cheap credit.

We took our flat off the market after 4 months on the market with only one offer that was 20,000 pounds below our minimum price we were willing to sell (at that time).  We're going to put it back on in the spring but have lowered our expectations a lot.