The Nationwide has just issued its house price index for May. The numbers are just awful:It is bad, and it is going to get worse.
Thursday, 29 May 2008
The collapse accelerates
The Nationwide has just issued its house price index for May. The numbers are just awful:It is bad, and it is going to get worse.
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14 comments:
Biggest fall for 17 years.
Who said we would never see the price crash of the early 90's happening again?
This country needs a bouyant housing market. It gives people the confidence to spend, as not spending indicates recession.
The sooner that there is an upturn in house price fortunes the better it will be for us all.
Over half of working Brits would survive financially for only four months if they lost their jobs - Egg
http://firstrung.co.uk/articles.asp?pageid=NEWS&articlekey=9681&cat=44-0-0
The housing market was the safety net. Now it is gone.
"This country needs a bouyant housing market. It gives people the confidence to spend, as not spending indicates recession."
Talk about getting things arse-backwards. People need the ability to PRODUCE. If you don't produce, you are just borrowing to spend. That's digging a whole ever deeper.
Best thing that could've happened to the UK is a housing bust.
Nick
"Who said we would never see the price crash of the early 90's happening again?"
Lots of people!
The original report is interesting:
http://www.nationwide.co.uk/hpi/historical/May_2008.pdf
Observation: About 30% of all mortgages have an LTV of 90% or more.
(N.B. Alice, this contradicts your negative-equity-ometer graph...)
I'm sad that we've not yet broken the record of the 1990s slump... never mind, this is the "big one" - so we can amuse ourselves over the coming month as that new milestone is reached.
Erm - maybe it doesn't... Hmmm - depends upon volumes sold, I guess. Still - 30% of all properties sold last year being underwater would still be amusing. ;)
2.5 percent in one month - that must have been a shock to home sellers.
2.5% in a month is about £4k off the median house? Median income is £21k. So that'll be two month's of pre-tax salary "lost" on the house in one month.
Hardly worth getting out of bed when the world punches you in the face like that.
Nick
2.5% in a month is about £4k off the median house? Median income is £21k. So that'll be two month's of pre-tax salary "lost" on the house in one month.
Hardly worth getting out of bed when the world punches you in the face like that.
Nick
Now might be a good time to look at bankruptcy law and what happens when people are underwater and can't / won't pay.
Having never been bankrupt, I haven't studied the law. I'd be interested to know how far a mortgage can pursue you when you walk away. With 30% of mortgages 90% LTV and about to sink, that leaves 2 likely probabilities:
1) People walk. Foreclosed homes flood the market. Very fast price drops.
2) People can't walk. Owners "priced in" to homes for the next decade while renters live the life of Reilly.
Nick
asteve: The 31% figure, of loans that are > 90% LTV, is calculated only on new loans, not remortgages. Still, who lends at 10% money down or less?
Thanks anon, I fathomed my error the moment I pressed post... (hence my correction moments later...) ;)
I guess it is also relevant to ask if the figures (both Alice's and the Nationwide statistics) take account of re-mortgaging and secured loans.
My instinct is that the big picture is far worse than the statistics suggest.
It must be agony trying to sell a house at the moment.
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