'50% drops'

neverdespairgirl

Heyman wrote: »

Surely an 100% fall = free flats?

That could happen - in blocks which are so empty there is no maintenance, no lift repair, no protection from vandalism, liability for major works, etc. They could literally be worthless.

Dithering_Dad

howler wrote: »

The board doesnt need people who come on here just to wind others up. Move along

Thanks for reminding me, !!!!!!....

yes, I'm also bored with the number of alter ego's people use on here. Tedious stuff indeed.

That and the sycophantic posters...

Max_Headroom_3

Dithering_Dad wrote: »

Not saying that it's boring for people who have a vested interest, but I'm happy where I live and bought many years ago and so I'm not really touched by house prices - whether they rise or fall.

Even if we have the mooted 100% reductions in 5 years hence, I'll have paid off my mortgage so still won't have negative equity.

Same here (except hopefully by the end of the year). However I do believe that house prices (whether they should be or not) are intrinsically linked to the finances of the nation and that affects us all (and those we love) to some degree and is therefore worthy of discussion.

And also, no one really knows do they? That's the really fascinating part.

Heyman_2

neverdespairgirl wrote: »

That is not what is happening in my area (WC1, Bloomsbury and Holborn, in London).

Rents are either the same, or slightly lower, than they were 12 - 18 months ago. That's for the same places, coming back on the market.

My argument is against those who were saying here that rents are 'falling fast' - it just isn't the case, as you yourself have stated here. I've posted quite a few articles (for what they're worth) here about the state of the rental market.

I just can't see that in the current climate we'd end up seeing plummeting rents as well as plummeting house prices - just wouldn't make sense.

howler_2

Max_Headroom wrote: »

Same here (except hopefully by the end of the year). However I do believe that house prices (whether they should be or not) are intrinsically linked to the finances of the nation and that affects us all (and those we love) to some degree and is therefore worthy of discussion.

And also, no one really knows do they? That's the really fascinating part.

The decline of new car sales shows this - massive reduction in MEW will have huge impacts

WTF?_2

Heyman wrote: »

My argument is against those who were saying here that rents are 'falling fast' - it just isn't the case, as you yourself have stated here. I've posted quite a few articles (for what they're worth) here about the state of the rental market.

I just can't see that in the current climate we'd end up seeing plummeting rents as well as plummeting house prices - just wouldn't make sense.

Supply and demand ..... and ability to pay. You can't get a loan to pay rent.

Even as house prices were soaring, allegedly due to demand, rents were not rising at anything like the same rate.

To me, that indicates that actual demand for places to live in isn't anything like as strong as people inferred from the boom in house prices.

As recession rolls in, people will be scaling back expenditure. That includes housing. Options include moving into a cheaper house (smaller or less convenient area), going into a HMO or even moving back with family.

A lot of the economic immigration by Eastern Europeans is sure to be reversed, feeing up a lot of lower end property. That's got to have a ripple effect too.

Max_Headroom_3

Conrad wrote: »

I think I can envisage £250k 2 bed flats on the London periphery, in decent locations going down to £100,000. I know it sounds incredible, but it could well come to pass with rising unemployment, and frozen lending.

Just back to this briefly, have a look at number 8 here...

http://timesbusiness.typepad.com/money_weblog/2008/06/post.html

Heyman_2

!!!!!!? wrote: »

Supply and demand ..... and ability to pay. You can't get a loan to pay rent.

Even as house prices were soaring, allegedly due to demand, rents were not rising at anything like the same rate.

To me, that indicates that actual demand for places to live in isn't anything like as strong as people inferred from the boom in house prices.

As recession rolls in, people will be scaling back expenditure. That includes housing. Options include moving into a cheaper house (smaller or less convenient area), going into a HMO or even moving back with family.

A lot of the economic immigration by Eastern Europeans is sure to be reversed, feeing up a lot of lower end property. That's got to have a ripple effect too.

Too much generalisation, vagueness and narrative and not enough actual backed-up facts there for me I'm afraid.

What are you saying then? Do you think rents will 'plummet'?

GDB2222

neverdespairgirl wrote: »

That could happen - in blocks which are so empty there is no maintenance, no lift repair, no protection from vandalism, liability for major works, etc. They could literally be worthless.

I remember in the last slump there were two blocks of flats in one of the auctions with a guide price of £10k. That's a total of 80 flats for £10k = £125 each.

I think those are the blocks that eventually ended up housing Kosovan refugees on housing benefit. I imagine that they made their purchase price in rent each week - may have needed some work doing though.

WTF?_2

Heyman wrote: »

Too much generalisation, vagueness and narrative and not enough actual backed-up facts there for me I'm afraid.

What are you saying then? Do you think rents will 'plummet'?

I'm saying there will be strong downward pressure on rents.

* I doubt there is the demand factor.
* The 'ability to pay' factor is certainly in doubt.
* People have options to downgrade and will take them to save money

I can't see there being enough upward pressure to support meaningful rises unless of course inflation really takes off.

If you want to sink cash into BTL then even at current reduced (vs peak) prices, that's something to consider.

The best bet for rental demand is that lots of people get repossessed and end up living in rented accomodation. But frankly I can see a lot of reposessions going hand in hand with bankruptcy. Maybe the government will step in and buy up a lot of houses for social housing with all that cash they salted away during the good times.