With the US subprime crisis spreading to Europe, shockwaves in Northern Rock which would spread to other banks, UK economy growth not looking healthy, increasing trade deficits, sharply rising mortgage costs, falling corporate profits and job cuts especially in the City, and as market turmoils escalates, housing price which shows a first drop of 2.6% (from Rightmove last month), this are the signs of the beginning of a housing crash. PROPERTY SHARES ARE A SELL!

Commercial sector already falling, Alan, hence funds are demanding 3 month notice of withdrawals. It's been gonig on for a while. A wee bounce might be on.

Residential now on slippery slope IMO.

Some fund or other is predicting the bottom of the commercial market this morning.
Residential is undoubtedly facing problems, I just don't think they are of the magnitude some parties are talking about, Big Al.
Certainly we will see less activity and lower asking prices, but the actual sale prices will not fall as far as the bigger predictions suggest.
We are basing our view of a crash on following the USA lead, since we followed them on the credit crunch, but the USA had a very different housing background to us. We have seen steadily rising prices, not runaway rises like the USA.
3 Years ago, a friend of mine was making very good money on Florida property by day trading!!! No wonder there is a fair distance to fall. And the dollar is very weak.
IMHO there are 3 things causing this prediction of a crash. The credit squeeze (which will not last for ever, it must turn around soon), High oil prices which will fuel inflation (though OPEC are pumping money into raising the supply side, at last) and perceived high rates (though historically they are fairly low).
The credit squeeze is showing signs of recovery (Citibank and Abu Dhabi), Oil is starting to fall and has further to go when capacity increases as Opec want, and as credit becomes more liquid, margins over LIBOR will reduce cheapening rates regardless of what the MPC decide.
If employment remains high the housing market will suffer a short term fall and recover just as quickly. Just as perceived problems cause a fall, a perceived bottom causes a rise.
All IMO.
Alan

I have just shorted Bovis Homes BVS at 622p. Looks likely to go down further

This quote sums up my take on housing here, there and everywhere. I have bolded the critical word. ;-0

"the price of houses is more to do with supply and demand of credit"

".... its all reason enough to fear that we may be about to experience the most prolonged downturn in the housing market for 15 years or so."

http://www.bbc.co.uk/blogs/thereporters/robertpeston/

The housing market in London is starting to show its seams. No doubt it will start to fall from now.

Meanwhile, across the pond today:

White House lowers '08 economic forecast:
"The housing market decline has been more significant than we expected," Edward Lazear, chairman of the White House's Council of Economic Advisers, told reporters in a conference call.

US foreclosure filings up in October:
U.S. foreclosure filings nearly doubled in October from the same month last year, the latest sign many homeowners are falling behind on mortgage payments and increasingly losing their homes, according to a mortgage research company.

Federal National Mortgage Assoc Home prices fall 0.4 percent in Q3:
U.S. home prices marked a quarterly decline for the first time in 13 years in the third quarter, according to government data released Thursday that provide fresh evidence of the housing market slump.

It's coming here, it has to!!!!!

I think an intrest rate cut is on the cards .

'Cards' being the operative word here.
The only thing it'll boost maybe is credit card spending over the festive wotsit.
It won't make a blind bit of difference to mortgage holders or applicants - rates have already gone up because of LIBOR.

Indeed.

Additionally, they'll no longer lend to just any Tom, Dick, Harry or Choccy. ;-)))

Oh they will, Big Al.
Capitalism can almost be defined by saying that where there is a demand, someone will evolve to supply it!! The rates may not be as good and the underwriting a tad more cautious, but it will exist. And inevitably, as the boldest players make good money from a less competative, but equally profitable market, competition will be back to drive margins down and risks up.
It may be some considerable time yet, but it will come about, because demand for this type of loan will rise, and those facing repossession or unmanagable debts will pay whatever rate they need to in order to save their home or consolidate their monthlys so they can have a beer at the weekend.
Just IMO of course.
Alan

Times are hard choccy , are you still holding your bank shares ?

Alan - I think we always agree to disagree.

People have been going bankrupt, making IVAs and losing their homes at the highest rate in years for quite some time. Of course, you don't read about it in the papers yet. The only reason there is demand is because money is cheap. It's been as cheap as it was in the 60s. Unfotruantely the 70s happened next. ;-)))))

Yes but for every repossession that goes to auction, there is ten buyers bidding strong money for the property, strong demand will not go away unless we build 100,000 more starts a year for the next ten years...

Rubbish IMO. It's all a house of cards built on very cheap money that is becoming ever more expensive.

Do you really think in your wildest dreams that people will be able to take 6x salary at 8% when they've had it at 4.5% for 2-3 years. Get real.

Not sure about 8%, the only reason there is a slowdown is because of the delayed effect of 5 rate rises still biting, 5.75% is still low. The mistake by the BOE was by lowering the rate back down to 4.5% 2 years ago, when it was at 4.75, they fuelled the surge in prices which has led to the problems we face now...

We'll disagree then Al. :-)
Just remember that 6x salary at 8% is 50% of income. Just the same as 4x salary at 12.5%, and rates were running at higher than that when I got on the ladder. Since then we have seen almost continuous boom.
Anyway, if lots get repossesed, they end up renting and there is a limited stock of social and council housing so rents will rise as demand outstrips supply. The effect will be to make buying appear more affordable than renting and so the whole shebang kicks off again.
The simple fact, long term, is that we have a population that outstrips housing supply, a changing demographic of fewer people per household and an increasing population, and not enough houses being built. There is no way that the businesses involved in home financing will not want a slice of this, so as the supply of credit comes back, prices will rise.
As a foot note, we are all pretty much locked in to it. Even though 2008 may see a dip in prices, it would have to fall almost 20% for it to be worthwhile selling my property and buying in again at the bottom, and thats if I could call top and bottom accurately and find a willing buyer and then seller, so ther is little I or anyone else can do.
Alan

Talk of an intrest rate cut on thursday ? we shall see .

House prices fell for the third month in a row during November, dropping by 1.1%, Britain's biggest mortgage lender said today.

Halifax said it was the first time prices had fallen for three consecutive months since early 1995, while it was the biggest monthly drop recorded since December last year.

The slide pushed annual house price inflation down to 6.3%, its lowest level since March last year.

The figures confirm the slowdown is now well under way, as the market responds to higher interest rates and stretched affordability.

Halifax is currently the only one of the major indexes to report three consecutive months of falling prices, but Nationwide Building Society last week said house prices fell by 0.8% during November - their biggest monthly drop for more than 12 years.

Property information group Hometrack said house prices in England and Wales fell for a second month during November, easing by 0.2%, while website Rightmove said they dropped by 0.7% in the four weeks to November 10.

Wednesday's figures will further stoke speculation among some commentators that the market is now heading for a period of sustained price falls.

But Halifax said a mixed pattern of monthly price rises and price falls was a "typical feature" of a more subdued housing market.

It said between July 2004 and June 2005 there were six monthly falls and six monthly increases as the market slowed in response to higher interest rates.

It added that higher mortgage repayments and falling earnings in real terms had put pressure on households' income, leading to a slow down in both house price growth and activity.