Author Topic: Why house prices fall  (Read 4345 times)

0 Members and 1 Guest are viewing this topic.

The Prophet

  • Global Moderator
  • Senior Member
  • *****
  • Posts: 364
  • Country: england
  • Financial & Economics commentator
Why house prices fall
« on: June 04, 2011, 08:48:44 am »
Some people believe that the fall in house prices will be restricted by the limited supply of land and planning restrictions.

But house prices have more to do with the availability of mortgages than supply and demand of residential property and land.

Unless mortgage approvals increase dramatically, which seems unlikely, house prices will continue to decline.


Fred

  • Junior Member
  • **
  • Posts: 70
Re: Why house prices fall
« Reply #1 on: July 27, 2011, 11:39:13 am »
A recent  report said that mortgages are still down on the levels they were at last year.

Tim Fee Snagging Inspector

Albert

  • Junior Member
  • **
  • Posts: 66
Re: Why house prices fall
« Reply #2 on: July 29, 2011, 11:28:20 am »
I think it is going to be bad this year if you need to sell your home.

FirstTimeBuyerGuru

  • Junior Member
  • **
  • Posts: 37
  • Free Guides For First Time Buyers
Re: Why house prices fall
« Reply #3 on: August 03, 2011, 02:31:56 pm »
It's an interesting topic isn't it.

I believe there comes a point at which even the most reckless of buyer won't borrow more than they can afford...unfortunately this point is way out of line with the number banks have in their heads! It's certainly true that house prices are a pure function of mortgage availability.

Philofacts

  • Global Moderator
  • Senior Member
  • *****
  • Posts: 454
  • Country: england
  • New Home Expert
    • Brand New Homes
Re: Why house prices fall
« Reply #4 on: August 04, 2011, 08:51:12 am »
Mortgage interest rates are historically low.
It is inconceivable that this will always be the case.
Over a 25 year loan term, rates could vary between 3% and 8% apr maybe even higher.

House buyers should therefore only borrow what they can afford if rates were at say 8% apr.
Make a Donation - If you found the information and advice helpful.
The premier information website for the UK new home buyer.