this came out a few days ago...
"The House Price Crash is imminent, as First Time Buyers stand aside."
Monthly Report on the UK Housing Market for December 2004,
by independent website housepricecrash.co.uk
We are now witnessing the beginning of the end for the UK property bubble, as the market moves into a serious downturn. Prices in market-leading London are down 5-10% and the scarcity of buyers suggests it has a lot further to go. This has prompted website, HousePriceCrash.co.uk to issue a "Crash is Imminent" warning. This view is backed by the reports and evidence supplied by the members and contributors to the website as well our own research.
Reinhard XXX, press spokesman for housepricecrash.co.uk comments: "The 'Denial' phase, which has run for several months since last summer, is ending. It is becoming increasingly apparent that prices are falling. Those who said that prices would pick up in the fall, or the market would see a gradual sideways correction, are waking up to the reality of an overbuilt and overpriced market with buyers unwilling to pay current asking prices."
There is a growing supply, with sellers seeking to achieve prices at perceived "market value", but these are based upon historical reports of substantial house price growth in the past. Significant number of properties are now advertised as chain-free - evidence suggesting that many "buy-to-let" landlords are also heading for the exit door. But serious buyers are scarce and those that do buy, are only responding to clear bargains. Information we receive from estate agents suggests that aggressive price cuts are required, just to get viewings. Cash buyers are getting big discounts, from sellers who are too nervous to wait in chains. Unfortunately for those sellers holding out, today's bargain price is tomorrow's market level.
"Another phenonemon we see in the market is sales being agreed but subsequently falling through, as buyers are unable to get financing due to lenders becoming more restrictive or surveyors downvaluing the property. Chains also fail because buyers are unable to sell their own properties, which is often down to the failure to find a first time buyer at the bottom of the chain. Gazundering is on the increase, and the average chain length has increased significantly as first time buyers have fallen to record low levels and buy-to-let has slowed sharply," active HPC member Van XXX said.
In the meantime, the overhang of offplan, and soon-to-be-completed new properties is something we are watching closely. Builders are getting nervous. We hear that most new developments have fallen behind on their budgeted sales, and they are getting creative to make sales. Stealth price cuts like paid-stamp-duty, and rental subsidies are proliferating. But builders are avoiding advertising outright price cuts for fear that it will further depress the market. Meanwhile, the builders are quietly offloading their properties at 10-20% discounts to wholesale buyers and through commissioned property finders. If these transactions were more transparent, the market would be sliding faster, in our opinion.
Plenty of properties are quietly being withdrawn from the market with no sale agreed, and it is likely that they will reappear at some point next spring in the hope that the market will be more favourable, as predicted by some commentators with vested interests. "Sellers who withdraw now in the hope that they can get a better price in spring will be in for a nasty suprise", Van XXX said. "Rather than attract buyers as hoped for, the likely effect is that the resulting increased supply next spring will put further downward pressure on prices. Once the fabled 'spring recovery' fails to materialise, it will finally sink in to the public that the market is going down", he said.
If the past is anyhting to go by, vendors should not place too much reliance on forecasts for the market to pick up next spring. On 5th November 1989, The Times reported that "Britain's depressed housing market could pick up much sooner than expected, according to a forecast to be published this week." The rest is history.
- housepricecrash.co.uk
press contact: press@housepricecrash.co.uk, Tel.: xxxxxxxxxxxxx
ABOUT housepricecrash.co.uk:
housepricecrash.co.uk (HPC) is the fastest growing independent house price website and discussion forum in the UK. Regularly achieving 20,000 daily page hits and over 150 users online at peak times, our members range from taxi drivers to rocket scientists and solicitors, landlords to engineers. In addition to the active forum discussion boards, HPC features daily news summaries, property charts, and an extensive summary of property price statistics. It is THE Place for intelligent prospective first time buyers, "sell-to-renters", and anyone with an active interest in the property market.
Unlike many official sources, which are tied in with lenders, estate agencies, and money brokers, HPC has no vested interest in maintaining an uptrending property market. The site is visited by persons from all walks of life, including students, housewives, and manual workers. But a survey has shown that the most frequent users are professionals from fields such as IT, Finance, and the legal profession. Many are prospective First Time Buyers who feel that they have been kept out of the market by the rapid increase in prices, but there are many other types of users of the forum. Some are older people, who have "seen it all before" and have sold-to-rent. Others are "TUBs", who still own, and plan to "Trade-Up-at-the-Bottom" And there are a number of buy-to-let investors, who until recently had been visiting to the site to tell would be buyers about how they were missing out on capital gains from a rising market. In formulating the commentary in our first Monthly Update, we have relied upon the anecdocal experiences of many of our posters.
Link: PRweb Release