The last House Price Crash...

lostinrates

We could, I believe still get a mortgage and buy something short-medium term suitable for us, as we had hoped to do earlier this year. In very many ways it would e easier....if the market showed signs of stability we might have reverted to this plan. Rising market not the issue here, but a stable market. if we were to buy it would not be making money that would be the aim (even in an exuberant market however, our moving fees etc would probably mean there would be no gains in the short term) but rather feeling the money would be 'safe' in the house for 1-2 years while we continued to build funds for the dream property. The market is volatile, so we sit still. It would, IMO, have to be a very non-average set of circumstances that made entering the housing market a good move right now. There ARE FTBs who are mortageable but I think they are those that are a bit scared off by the current instablity in the financial and housing markets.

Heyman_2

carolt wrote: »

Disagree - certainly tightened bank lending will prevent some buyers.

But I think more buyers will be/have been put off by a change in sentiment. Many buyers were speculative or buying because when prices were rising, they thought they'd better get on the ladder now, or they'd not be able to afford it a month or two down the line. Ten months of heavily falling prices, along with real fear in people's minds about job security, has on its own put off all but the most determined buyer.

Don't underestimate sentiment as a market driver.

Or to put it another way, most (not all) buyers are less stupid than you seem to imagine. Doubt many are even enquiring about mortgages at the moment; rather than the situation you seem to picture, where they are all queuing up for them, but tragically being rejected. I stopped viewings, let alone enquiring about finance, about a year and a half ago, and whilst I was a a few months ahead of the trend, I think I'm pretty typical. I still want to buy - just not now. No way.

Well I certainly didn't say anyone was stupid! :rolleyes: More like not as well informed as the regulars on here. You have to bear in mind that the vast majority of people in this country do not visit this forum or this type of internet forum in general, and probably aren't as 'into it' as people are on here.

I'm certainly not getting all dewey-eyed about the naive hopeful first time buyer being tragically denied their dream home because of mortgage lending as you seem to suggest in your last paragraph!

I seem to remember reading that a few months ago, the Estate Agents union (or whatever it is) was saying that there were still plenty of would-be buyers coming through the door, just that none of them could get mortgages. And also, closer to home (literally), a house conversion next to us containing two flats was sold to two individual buying parties within days of going on the market, but both fell through because the buyers in both cases couldn't get a mortgage agreed. We really need an Estate Agent to come on here and give us their opinion!

I do agree with you about people being worried about their jobs though etc as that has to be a huge factor, but like I've said before, if it's the FTBs we're talking about, I don't think you can deny that many of them are coming to the market without knowledge and perspective.

SingleSue

Bought for 41k in 1990 at what we thought was bottom of the market (previous owners had lost a fair bit already, circa 20k from new) and it was sold late 94 early 95 for 27k.

GDB2222

neverdespairgirl wrote: »

A lot of it is down to mortgage lending. So if a couple with a £30k deposit can only get £170k on top of that as a mortgage, the most they can pay for a house is £200k. A lot of couples in that boat means that the houses that were £285k, for example, have to drop in price if they are to sell.

It's certainly true that house prices are linked to mortgage finance in most of the market. However, at the top end it's mostly cash buyers and the prices are also very high.

Baz_2

chucky wrote: »

i would also add that the high end property cash buyers are more often than not using cash that would be otherwise be going to the Inland Revenue. buying property is very tax efficient and buying even when the market prices are moving is better than paying 40% tax.

so when the HPC ghetto say not to buy at the moment, it's terrible out there, don't do it!! - here is an example to show how little they actually know... :j

How do you get tax relief for buying residential property?

moanymoany

Heyman wrote: »

We really need an Estate Agent to come on here and give us their opinion!
quote]

You could do a lot worse than read the Agent's Blog -

http://agentsdiary.blogspot.com/

Very informative.

Heyman_2

Hey, that looks pretty good - I'll have a read when I get a bit of time, cheers.

GDB2222

chucky wrote: »

i would also add that the high end property cash buyers are more often than not using cash that would be otherwise be going to the Inland Revenue. buying property is very tax efficient and buying even when the market prices are moving is better than paying 40% tax.
:j

Do you have any reference for that claim of tax relief on buying property? Where did you hear about it?

GDB2222

chucky wrote: »

i never said tax relief, i said tax efficient.

OK, no tax relief, so have you any reference for your claim that buying property is tax-efficient, then?

Walletwatch

chucky wrote: »

as i said it would be cash spent on property that would otherwise have gone to the inland revenue.

Not sure I understand that, Chucky. The money that these folks would use for buying houses would otherwise go into savings or investments, or some other expense. How is it even tax-efficient, as this would be post-tax income anyway.