Interest Rate Cut?

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Interest Rate Cut?
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Bernie66

Joined: 14 Jan 2005
Posts: 13967
Location: Eastoft

Posted: Wed Aug 03, 05 3:51 pm Post subject:
Don't like to be the bearer of bad news but mine took ten weeks, around April this year. Watching another couple of people selling theirs at the moment and they are struggling. Lowering the price has not helped them either! (probably just has cost them profit)

Jb

Joined: 08 Jun 2005
Posts: 7761
Location: 91� N

Posted: Wed Aug 03, 05 3:56 pm Post subject:
Round here some properties are dropping in price while others are sitting on the market for months and longer while the owner's steadfastly refuse to concede that their two bed rabbit hutch could conceivably be worth anything less than a quarter million.

Jonnyboy

Joined: 29 Oct 2004
Posts: 23956
Location: under some rain.

Posted: Wed Aug 03, 05 3:58 pm Post subject:
Things seem to flying out here at the moment, building sites have doubled in value since we bought ours, although that may be down to stricter planning regs than anything else.

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Wed Aug 03, 05 5:46 pm Post subject:

The thing is if you're a net saver (like most retired people) then the rates are still horrendously low. It's not just the few rises that have dampened off the market but the huge amount of debt people have amassed. Some are predicting a crash again, but they have been for the last couple of years.

Has anyone thought about keeping their house and renting it out while buying another? Maybe a bit too risky but I know some who've one it.

jema
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 28237
Location: escaped from Swindon

Posted: Wed Aug 03, 05 6:32 pm Post subject:

Treacodactyl wrote:

Some are predicting a crash again, but they have been for the last couple of years..

What makes a crash, I'd say we have seen a drop of at least 20% here.

nettie

Joined: 02 Dec 2004
Posts: 5888
Location: Suffolk

Posted: Wed Aug 03, 05 6:45 pm Post subject:
Ours have stayed about the same.

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Wed Aug 03, 05 6:47 pm Post subject:

jema wrote:

Treacodactyl wrote:

Some are predicting a crash again, but they have been for the last couple of years..

What makes a crash, I'd say we have seen a drop of at least 20% here.

I bet the official figures from the Land Reg will say house prices have not gone down at all, just people expect then to go up all the time. From a personal point of view I'd love them to go down as I'm still climbing the ladder.

High Green Farm

Joined: 30 Nov 2004
Posts: 349
Location: Mid-Suffolk

Posted: Wed Aug 03, 05 9:05 pm Post subject: Re: Interest Rate Cut?

Aled wrote:

Our previous house took 3 days to sell in 2002.

And ours took a year at the same time....so much of it is luck, and finding the right person looking at the right time.

Bernie66

Joined: 14 Jan 2005
Posts: 13967
Location: Eastoft

Posted: Wed Aug 03, 05 9:12 pm Post subject:

nettie wrote:

Ours have stayed about the same.

Staying the same is equated to going down these days. I was in my last house for 13 years, for the first 8 years it increased in value circa �25k. In the last 5 years it went up �55k. Didn't help at all because the house I have just bought went up the same pro-rata.

halloween

Joined: 27 Jun 2005
Posts: 61
Location: Co. Galway, Ireland

Posted: Wed Aug 03, 05 11:55 pm Post subject: Re: Interest Rate Cut?

Aled wrote:

My fingers are certainly crossed for a rate cut tomorrow. Housing market is completely dead at the moment. Our house has been on the market for three weeks now and just the one viewing.

Our previous house took 3 days to sell in 2002.

Our house went on the market in February 2005 and we didn't get a single viewer for almost 4 months! We changed estate agents twice and dropped the price almost �12k and now hopefully, fingers crossed, touching wood, we will be exchanging in the morning!

Bernie66

Joined: 14 Jan 2005
Posts: 13967
Location: Eastoft

Posted: Thu Aug 04, 05 8:19 am Post subject:
Best of luck for today, I know what you are going through

Aled

Joined: 08 Dec 2004
Posts: 123
Location: Anglesey

Posted: Thu Aug 04, 05 8:30 am Post subject:
Thanks everybody. As HGF says, it's just getting that one person at the right time. We have a rental property waiting for us which isn't going to be there forever. That's the main frustration. Hopefully things will also pick up after the school hols in September. We've also not had a curry for three weeks for fear of the smell - I'm going to crack soon!

Aled

Joined: 08 Dec 2004
Posts: 123
Location: Anglesey

Posted: Thu Aug 04, 05 8:31 am Post subject:
Good luck halloween - let us know how you get on today.

twoscoops

Joined: 28 Oct 2004
Posts: 1924
Location: Warwickshire

Posted: Thu Aug 04, 05 8:47 am Post subject:

All the best with that, I doubt you�ll ever regret it.

"I bet the official figures from the Land Reg will say house prices have not gone down at all, just people expect then to go up all the time. From a personal point of view I'd love them to go down as I'm still climbing the ladder."

One of the reasons that people now see property as such a good investment is that prices rarely drop. During the lean times vendors can struggle to reach their asking prices, and most decide to wait until the market begins to start warming up to sell. There are some that really need to sell their homes, due to job relocation or any other number of reasons, and these are the ones who can decide to take a hit on price. That�s when it looks like prices are dropping, but really they are not.

sprinter

Joined: 07 Aug 2005
Posts: 42

Posted: Mon Aug 08, 05 9:55 am Post subject:

Hi Twoscoops,

I'm presuming then that you weren't involved in the property market around 1990?

Property prices can and do drop, in the same way they can and do go up.

Property plummeted early 1990's and almost one million people in this country were made homeless because of it.

At the moment as you say people are holding out for the market to "warm up". What is going to cause this warm-up I wonder?

The recent cut in IR's has possibly had the opposite effect in boosting house prices. A .25% cut means that someone with a 100k mortgage will save around �15 per month. It hardly covers a 10k rise in the price of any one particular property. Buyers are wary, very wary of borrowing.

In the 1990's earnings v borrowing ratio was 3 x income. Today it stands at around 5.5x. This means that people simply cannot afford to borrow anymore. It also means that for many they will not be able to pay their mortgages back. They were sold over inflated properties at a level which realistically meant repayment was a tenuous chance.

If prices fall, many will be in negative equity again. But at least as the fall kicks down the ladder people will be able to afford homes.

Many waited for the "warm up" last time. It never came. You either lower your price and sell early, hoping to buy from someone who has done the same thing. Or you sit it out till the slump is over and prices have maintained stability with inflation taking you out of the NE situation.

Try and sell in the middle and you will lose a lot more than a piddling couple of thousand.

Last time round my friend bought at the height of the boom. The value of her property was in NE for 10 years when she was finally able to sell. 1988-1998

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