The 70% club

IveSeenTheLight

dopester wrote: »

If you have existing debts that you are full out on trying to pay, such as a mortgage and unsecured debt - or if you have been made unemployed or taken a pay-cut, you are unlikely to get the credit to buy.

Britain is entering a recession which means there will be job cuts.
While it will be painfull for those that lose their jobs, it is a small percentage (probably less than 1%) of the work force, meaning the vast majority will still be in work.

Life will go on.

What people need to do is work their bloody socks off and try and ensure that if their job is vulnerable, that hoperfully, they will not be one of the unfortunate selected

There's a lot of if's.
I don't live my life by what if's.
I live my life making the best decisions I can and diversify if need be.

For me, someone who always thinks "what if" is a likely candidate to be left behind in whatever they "what if" about.

mystic_trev

IveSeenTheLight wrote: »

remember to post a link when you quote me.
I'll be happy to respond and show other links

But a year ago you said there wouldn't be a crash

I believe there may be a slight correction in some areas, maybe a house price stagnation in more, but definately not any significant price reduction such as people are stating as a crash is about to happen

http://forums.moneysavingexpert.com/showthread.html?t=572895

So perhaps you'd like to tell us, are we in a crash or a slight correction? Was I right and were you wrong?

baby_boomer

macaque wrote: »

A year ago I suggested that a house price correction in the region of 70% might be on the cards. People's reaction to this was ridicule and contempt. With each passing month however, more and more people have been joining the 70% club.

I wouldn't want to ridicule anyone who thinks about these issues.

But you're wrong.

I'll have bought two buy-to-let properties for retirement earnings by the time it gets to a 50% drop.

Cannon_Fodder

That doesn't make/prove him wrong.

I don't concur with 70% myself, but just because you want things to recover after you buy cheaply, doesn't mean they will.

Japan HPI was flat for nearly two decades...when is your retirement? - what if you can't rent those BTLS and don't want to sell at a loss...

mystic_trev

No - I agree and don't think prices will drop anywhere near 70% However what we're currently experiencing is a Crash - There can be no doubt in that!

For the record, I wouldn't be surprised to see prices drop another 20% by year end 2009.

baby_boomer

Cannon_Fodder wrote: »

what if you can't rent those BTLS

We have a rising population in the UK and a government that is broke so won't be able to build the social housing that is needed.

This is a plus factor in the long term rental market, assuming you don't think that the end of western capitalism is nigh.

adr0ck

baby_boomer wrote: »

We have a rising population in the UK and a government that is broke so won't be able to build the social housing that is needed.

This is a plus factor in the long term rental market, assuming you don't think that the end of western capitalism is nigh.

spot on

and if we see 70% falls no housing association (social landlords) will be able to build houses the figures wouldn't add up

dopester

adr0ck wrote: »

spot on

and if we see 70% falls no housing association (social landlords) will be able to build houses the figures wouldn't add up

Of course they will.

People in the 1950s, 1960s, 1970s ect still built houses you know. Builders may have earned like £2,500, £5,000, £10,000 for the work on each house, and paying employees... but that money went further in the economy of that time and afforded a standard of living.

Welcome to deflation. Get used to lower wages Brains, still being able to buy stuff, but less Audis and less holidays and less I-want-it-now, "bang it on the credit card", as we rebuild an economy of our own that works.

Cannon_Fodder

baby_boomer wrote: »

We have a rising population in the UK...

That was the spiel that was trotted out to deny there could ever be a reversal of ever-increasing house prices.

Then it was the spiel that was trotted out to deny there would be anything more than a stagnation of house prices.

Then it was the spiel trotted out to deny there could be more than a single digit drop in prices.

Now its the spiel used to deny the possibility that renters may not be so prolific once house prices drop enough for them to turn into buyers.

With a million empty homes in the UK, and the shortage of funds you mention - which could be temporarily ignored and circumvented thru "prudent" borrowing - I suspect the next few years will see legislation to complusory purchase and innovatively use derelict/unused properties, to the detriment of the private rental sector.

Imagine the positive electoral response for Gordon Brown, if "he" (or councils) buy loads of properties near the bottom of the market. Don't like the man, but he knows how to manipulate a situation to his political advantage...

sabretoothtigger

I think 50% is more realistic because thats when the majority of value has already been lost and it becomes more a case of grab it while you can and just take any further losses.

This should apply to anyone who actually needs that house, location, etc and intends to live there 10 years or more. The more flighty parts of the market may be subject to greater fluctuations

We have a rising population in the UK

Not really, not compared to somewhere like India. Apart from immigration maybe the most important change in britain is people living more separately, for all those divorces and less co habitation you have a massive increase in housing demand compared to how people use to live.

I think thats the real long trend forcing housing demand and the eventually saviour of the market, it does rely on people having money though because its basically a luxury or western world factor.
Falling prices shows people can make do with less space if they have to