New House Prices Holding Up, But...

Is it just me that can only see good news for the property market? Due to HIP's less Property's are coming to market with speculative sellers less likely to try there luck. Less property's on the market means demand will much more easily exceed supply. More sensible lending policy's can only be good for a long term stable market, getting away from boom and bust. With Interest rates on the way down landlords and others in the market already should not see massive hikes in there repayments, keeping repayments as affordable this year as last, maybe cheaper for some, and in no way going to force ten's of thousands to dump there properties on the market trying to escape spiralling costs. I can see no reason for a House price crash, indeed with fewer second hand properties on the market, people wishing to buy will have few options other than to buy new and can well see why Persimmon have posted good figures. I think the Fool have been predicting a crash in the market so long they cannot do a U turn now !!! I see a stable more sensible market, even steady growth keeping up with inflation, not a crash or a boom. But then who am I, just a logical engineer who has had a Mortgage for 25 years and lived through most situations already.

Given the inflationary pressures caused by high hard and soft commodity price increases, my take is that the BoE will not have much more room for manoeuvre in reducing interest rates. Combine this with the relative inaccessibility of finance compared with a year ago due to the credit crunch and there is, ceteris paribus, a significant increase in the financing costs associated with property ownership. If in addition to this one accounts for the fact that property is anywhere between 20-40% overvalued against long-term fundamentals (Rental yield, price/av earnings, etc) depending on which reports you read, there is further reason for pessimism. Another factor which I haven't seen mentioned is the potential impact of the changes to CGT which will effect the buy-to-let market. I suspect that many of these investors will be waiting until the new tax year to unwind their positions and put their property on the market to benefit from the reduced CGT rate. Given the above, there would seem to be some very good reasons to be bearish on property this year. Caveat emptor.

I have seen two previous house price cycles and whilst each time is a little different certain features are always present. 1. Continued optimism by those who can't accept (for whatever reason)that the cycle has turned down. 2. Once the decline starts actual prices usually fall on average by about 20% from their peak values. 3. Because the fall in house prices is part of a wider economic cycle - Inflation tends to pick up - this normally makes mortgages more expensive and erodes the real value of house prices more quickly - note that the increase in inflation is what limits the fall in houseprices to 20% or so; if inflation doesn't pick up then the fall in prices takes longer or falls further than 20%. 4. Whether its the stock exchange or house prices, when prices fall its not all DOWN DOWN DOWN - Is down 2, up 1, down 2 more, up 1, down another 2, etc. so you get lots of conflicting info. What would I do: Well I'm in the Student rental market and have not purchased property since 2005 when the market got too expensive - I am waiting another 2 years when I know that prices will be a lot lower in relation to rents before making any further purchases. What would I recommend - don't be rushed into the market by those anxious to get you to buy - be patient - houses will become more affordable - that's the cycle, and NO things are not different this time round no matter what the reasons given. Best Wishes.

Having asked a number of people locally and watched the stock market and housing market for some time, I think they have it right. Figurewizard summed it up nicely with his first comment. The affordability rate is simply put too high. You put too much pressure on a system and eventually it will break and the housing market figures and observation of the market locally tie in with that. The stock market crash was a result of exactly that problem. In regards to there being low supply and high demand, I'd say that's incorrect too. Anyone who isn't bind (based on the feedback from a lot of mats who live around the country too) can see that the market is slipping. There are more and more houses on the market for sale, and simply put, they aren't selling. I've heard from the local estate agents that several sellers are attempting to rent their houses out instead of sell them, purely because they have been on the market for a long time and there are very few buyers. If people can't afford these houses due to martgage companies cracking down and high prices, they simply won't sell. If the houses don't sell sellers have to try to lower prices to get rid of them. There are a number of die-hard housing market enthusiasts out there who seem to live in a dream world of their own, strong in the belief that the market can be driven up by vast amounts and sustain such growth indefintely when the economy simply can't keep up with it. To those people I'd say WAKE UP. The camel's back is already breaking. I've heard of plans to build thousands of new houses in this area in th near future, and similar plans in other regions. The government attempts to quell demand, quite rightly, because young people can't afford to get on the housing ladder. The more supply they provide, the lower the competition and the lower the prices. It's either that or leave the situation to spiral out of control, which simply winds up in another crash.

I would like some help and advice about the best possible solution I face with regards to British gas electricity charges. The problem I face is that British gas have slapped me with a 1,700 pound electric bill which they are justifying by saying they under-charged me for a year of electricity, plus my current usage as well as my future usage. There is no way I can pay this outrageous bill which I feel is unfair because it is their own (so-called) mistake. I am now faced with a bill of 207 pounds monthly payment which I have been forced to agree to less my supply be disconnected. I have two children to cater for and I'm really struggling. They are not admitting in writing that they made the mistake but are claiming that I as a customer, did not pay for electricity I used and that I have not payed several bills, which I find ridiculous because the initial bills they sent me before this drastic calculation has been paid for. Please could someone explain my rights because I am at my wits end with continuous phone calls only to be cut off after being on the line for an hour. I have not said I will not pay, but I want them to spread it over a two year period so that I have enough money to provide for my family, since as it was beyond my control. They are only trying to pressure me to go on a pre-payment meter which I don't want as even the worker at the call centre was honest enough to state I would probably be worse off cos in the long run I will be paying more for my electric. Sorry for the speech but I would be grateful for any help and advice offered Many thanks for your time Sorry for posting on this discussuion, but I didn't know where else to post this

FOR ANGELLE2 I have lived through this scenario some years ago. Firstly go to your nearest CAB (Citizens Advice Bureau)to ghet help. Even talking to someone who can help is a tremendous relief. They will direct you to the Government Agency who deal with these issues. Do this as soon as possible. Good luck - life's a bitch anyway!