What year will it drop to?

wymondham

mitchaa wrote: »

There are a lot of lunatics on here;)

Count me in !!:j

andrewmp

obsessed_saver wrote: »

I think to try to call the bottom in a predictable way would be impossible.

Much better to just find out at what price point will you be comfortable with buying at, and buy then.

For me, my measure would be buying a house with a 90% mortgage that would result in interest per month equivalent to rental. Of course, I would be putting in a big initial payment and not just 10%, but this is my measure of "affordability". Maybe 2003/2004 levels (depending on the prevailing interest rate).

I've just bought (FTBer) as the interest only on my mortgage (based on 10% deposit) would be 25% cheaper than renting my old worse quality property.

I put down a 20% deposit so the interest only element is only 65% of what I was paying in rent.

Saying that, the way things are going I'd be able to buy it cash in a few years as property was worth next to nothing here in the 90s.

harbinger13

My 2 bits.

Lets take oil as a comparison - oil at 145 was not sustainable - so it has started to come down, now we can make a call that it will go below 1990's level - say of 80. At 145, it used to cost us at 1.25p/lit - at 80 it would have been around 75p/lit - after the rise and fall + considering inflation the human mind has learned to interpret the present cost of 1.00p/lit is OK. It is not great - it is not bad but it is OK. Once our mind adjusts to this price - this becomes the stable price.

In a similar light there will be a point midway between 2007 price to 1980 price where we start to feel comfortable and move to buy. 2007 price is max ... min price need not be 1980 (I just took it as an example).

Probably a fair price for stabilization is take the avg house price just after the last recession - housing recession and then appropriately add increases of inflation + a small premium say 2% extra over the years till 2007. This is a pretty rough guide from my point of view.

mr_magoo_5

I can say is is going to be rough!

jscalow

I hope that prices fall by 50%. As a home owner with a mortgage this will be a great benefit to me. How? Allow me to explain. I currently scratch a living working 2 jobs and renting out my spare room to live- and I just manage. If prices half loads of people who have been priced out will suddenly jump on the market- thus freeing loads of council houses. I can go bankrupt get myself a cushy council house, get them to decorate and maintain it maybe claim a few benefits, spend every evening in the pub and never have to worry again. Bring it on.

LillyJ

dopester wrote: »

1) Have they got full cash to buy? The further house prices fall, the more credit will be restricted - and/or - become more expensive to obtain. We might see the lending system lock-up near completely.

2) Are their jobs safe from:

a) Redundancy, b) Paycuts - because all job-losses have a knock-on to effect to all other types of business.

To be fair my view is a bit different because a very large proportion of our friends are Police Officers, who have secure jobs, and a lot of over time is to be had round here.
A 3 our friends have got mortgage offers recently in anticipation of buying (more and more estate agents asking for proof before they let you look, apparently), and they all had 10-15% deposit (2 had 10%, 1 had 15%). None had any trouble at all getting mortgages.
I know this isn't the case for everyone, but I still don't think there isn't that much of an issue with getting a mortgage if your credit is alright and you have a deposit.

10% round here isn't that hard to save, 89k getting you a 3 bed ex council, just over a hundred would get you a 2 bed in niceish area.

Whereas back where I grew up, friends of mine from school, some of whom are earning a lot more than me, (city wages), can't even think about getting a house, and would need a £25k deposit minimum even for a flat, plus stamp duty and fees on top. So that's why I think it is so area dependent.

I forgot to add that we are also in a fairly unusual situation round here of rent being extortionately expensive compared with house prices. All the more incentive for people to buy. I realise this is pretty rare though.