Gloomy conversation with a friend who left housebuilding to go it alone developing small schemes some years back - not a do-it-up merchant, but a proper professional who finds opportunity to pick up smaller schemes below the normal cut off of the larger and mid sized building companies. Last chat he commented that he didn't recognise the credit crunch articles in the paper, because all the banks he spoke to said it was business as usual (well, they would, no one is going to fess up if not..). In the past when asking how sales went, he used to tell me over half of every scheme he did went to investors.

This time, not a happy chappy. In fact, he says the environment is as bad as he's known it. Asking prices are irrlevant as there are so few transactions. There are interested buyers for houses in SE, but most not able to proceed as can't sell, and builders no longer keen to take exchanges - some won't at all, and where reservations and deposits are put down, the fallout rate is high for all the reasons we know. The lack of ability to part exchange is a big problem now emerging.

Apartments anywhere north are a disaster, and developers now looking to put students in for nominal rents just to offload on-going costs of managment charges and council tax - and this completely undermines the BTL market in those schemes.

This is going to take a long time to clear, a long time.

some v interesting points my friend.

developers, estate agents, mortgage brokers are really all the same. the key to business is really transactions as much as prices. Once the realisation comes that we need big price reductions to get transactions moving again I think after these years of people moaning about Vested INterests blocking price crash, they will find no-one will be as loud supporters of HPC.

Once they accept that the spring bounce is and will be a complete failure , they will be begging sellers to reduce there prices by large chunks , i expect this to be happening very soon within weeks .
After all , like everyone the VI's have to eat as well .

Is HPC itself being overtaken by events? In a sense house prices become irrelevant in a stalled market with no buyers. A case of water, water everywhere but not a drop to drink.

A lot of first time buyers who were anticipating 100% mortgages might only get 75% ones. So on a £120K flat they'll have to find a £30K deposit. Even if prices drop by 50%, they'd still have to find 15K for a 75% mortgage.

As per my other thread, I'm your FTB that the countries EA's are looking for. And yes the banks says ok at 85% LTV and no more at a stretch 4x income.

This is already happening.