my view!

dboy1985

Ive read MSE for about 4 years, never posted because plenty of people have the same view as me, but what the hell; ive got lots of free time now so let’s get stuck in

I believe that everyone has a jumping in point with regard to buying a house; I would imagine a lot of people looking at the property market in June last year would have been put off by the prices – (in my area at least) of about 270K for a 3 bedroom house, which I feel is the average family home.

If the figures are to be believed of a rough 15% drop from this `peak` will now leave these house’s worth around 230k. All my friends who are with a partner earn roughly 50-60k between them at 3.5x this leaves them with about 200 - 210k as a potential mortgage, so based on that another 10-15% drop over the course of 2009 would leave them in line to get a house at this price.

Bear in mind that each person will have what they feel to be their jumping in rate, just like some people would never consider buying a car more than £2000, some people will never consider spending less than £5000 and so on, when house prices get to the point that a lot of people are looking at them and thinking `ok, so its dropped 50k from 2007, im going to jump now` I think you will find them stabilize around mid to late 2010, some of the posts ive read about them dropping 50% I really cant see happening, of course that doesn’t mean it wont happen. Im sure there will be a number of properties that end up pretty close to that figure but I certainly don’t think the average house will get to that level, as that would pretty much ensure that the hundreds of thousands of people who bought a house in the last 6 years would end up in negative equity!

Thoughts?

carolt

Dunno. Post again in about 10 months and you can see how your predictions have panned out.

Not long to wait now.

neverdespairgirl

welcome to the board!

caveman38

earn roughly 50-60k between them at 3.5x this leaves them with about 200 - 210k as a potential mortgage

Aren't future mortgages going to be assessed as 2.5 X joint income or 3.5 X single?

itsnever2lateisit?

Firstly, welcome!

I think there is a fundamental change which prevents people from deciding unilaterally the price they are prepared to pay, while a house that was £270k and is now 200k might seem attractive unless you have 50k deposit, then the lender wont give two hoots that 200k is only 3 times your salary

IMHO house prices will continue to fall until such times as sufficient buyers have accumulated the required deposit, when those two conditions coincide prices will stop falling

carolt

neverdespairgirl wrote: »

welcome to the board!

Quite!

Apologies for my lack of manners!

:hello:

dopester

dboy1985 wrote: »

All my friends who are with a partner earn roughly 50-60k between them at 3.5x this leaves them with about 200 - 210k as a potential mortgage, so based on that another 10-15% drop over the course of 2009 would leave them in line to get a house at this price.

Of course, for an unwinding economy which is being hit hard from nearly every direction, I'm sure your friends are completely confident they will both keep their jobs or not be asked to take a pay-cut.

It isn't like that is happening anywhere else that I could give you example after example about.. so yes, great theory.

Many of those partners are in their forties, with young children and substantial mortgages and with pension funds that have fallen dramatically in the past year.

“People are taking it very badly, and understandably so,” Ms Graham said. “They know the recession is happening, but they can't believe it's happening to them.” Ejected partners could struggle to find a similar position in another firm. “The [legal recruitment] market is just dead,” Mr Linsell said. “When they're shown the door, the chances of finding alternative positions are very low.”

Ms Graham said that firms had learnt their lesson after wholesale cuts of junior lawyers during the last recession had left them with a shortage of capable specialists coming up through the ranks when business picked up again.

However, there is also an element of expediency to the move. Shedding partners is quicker and easier than shedding associates, Mr Linsell said. As salaried employees, associates are protected by employment laws, while partners, legally classified as owners of the firm, can usually be removed through a vote of the partnership or a designated committee.

http://business.timesonline.co.uk/tol/business/law/article5454525.ece

mewbie_2

carolt wrote: »

Quite!

Apologies for my lack of manners!

:hello:

I don't recall getting a welcome when I made my first post. Cold shoulder and / or a load of abuse as I remember it. Quite right too.

chucky

mewbie wrote: »

I don't recall getting a welcome when I made my first post. Cold shoulder and / or a load of abuse as I remember it. Quite right too.

you're back Mewbie - thought that we lost you!!

welcome back

dboy1985

thanks for the welcomes people! very kind, as expected!

dopester wrote: »

Of course, for an unwinding economy which is being hit hard from nearly every direction, I'm sure your friends are completely confident they will both keep their jobs or not be asked to take a pay-cut.

It isn't like that is happening anywhere else that I could give you example after example about.. so yes, great theory.

http://business.timesonline.co.uk/tol/business/law/article5454525.ece

of course, some people will lose their jobs (i am one of them!) but that doesn't mean that they wont be able to find another job. More people will stay in work than will lose their jobs, I wouldn't have thought pay cuts were as likely as pay freezes personally

from your article:

A typical partner facing the axe is likely to specialise in an area such as finance or property

of course, because the housing and financial markets have stalled then jobs relating to those sectors will decrease. there are more than 2 markets when law is concerned however

mewbie_2

chucky wrote: »

you're back Mewbie - thought that we lost you!!

welcome back

Yes thanks, I went into a giant sulk over a heated argument which I was losing, but as no one noticed I thought I'd come back and pretend nothing had happened.