UK house prices hit 2002/3 levels at auction.

[Drifterwood]

Despite what the UK Labour Government is trying to tell people that it is doing in the style of King Cnut (Canute), I tracked a big auction today in London and house prices were hitting 2002/3 levels with many properties not even selling. That's about half last year's peak.

What is happening in the US? Is the Government trying to stop the apparently natural cycle of repossession/foreclosure? What sort of prices are these properties getting?

It seems to me in the UK that we are being told that people won't be repossessed. But that sems to me to be a sure way to protract the overall agony. You would just be clogging up an already oversupplied market. Almost noone can get credit because they just don't have the large/sensible deposits now needed again.

 

[D_Mallaber Manynuts]

Banks in the UK were lending to people of poor credit worthiness at high multiples and/or 125% valuations so a crash was bound to happen. It's made worse by the coincidence of the world plunging into recession.

Folk can't get credit because of a) lack of lending funds b) so many people losing their jobs as well as your point about big deposits. In the small city where i live houses just aren't selling so people are trying to rent them out, this has created a huge pool of houses for rent with no commensurate increase in the size of the market so, big surprise, rentals are falling dramatically. It's a horrible mess and no one wants to take any responsibility for it.

BTW I'd like an answer to your excellent question on what's happening in the US. My cousin in Florida tells me house prices there just keep on falling.

 

[Drifterwood]

BTW I'd like an answer to your excellent question on what's happening in the US. My cousin in Florida tells me house prices there just keep on falling.

I think we are in a cycle whereby, the supply from repossession and let's face it people dieing is greater than the able demand to buy. As you say, rental values keep falling as well, so this will in turn push down what investors are willing to pay.

Here we go round the merry go round. It amazes me really that the Government thinks it can control this process. You have to get to ground zero before things can improve. If you are a homeowner, you just have to hope that you won't have to sell during this process.

 

[Drifterwood]

Though it is a bit bad form to bump your own threads when it appears that noone is interested in the subject, I would like one more go at hearing what people's opinions are.

Are we in denial about our sudden loss of paper profit? Has it become as bad form to discuss it as it was good form when prices were zooming up?

Was there any social policy in the US to try to keep defaulters in their homes or is there the uncompromising law of foreclosure and forced sale?