Are house prices set to take a tumble? February 2006

dougkillen

A house price crash is inevitable, and it will happen as soon as lenders finally start to reign in their profligate lending of recent years. Consumer debt cannot carry on rocketing the way it has done forever!

However, calling the timing of the crash is a mug's game, but when it comes it will be a good thing for the economy in the long run.

For more analysis and discussion of whether there will be a house price crash, visit the House Price Crash forum.

snuffy

I wish they would crash soon, if they were going to, as I want to buy in the next 6 months :-)

However, I am a 1st time buyer, with a good job, 10% deposit but house prices where I live are about £165,000 for a 2 bedroom house...Can I really take the risk of £165,000 ++++?...living in the South East has it's disadvantages!

KG

Depends where you mean. It's difficult to tell for the UK as a whole as some areas are already suffering whilst others are still seeing large increases.

I'm sure I read somewhere the other day that Glasgow saw a 10% increase in the last year. My understanding is that this is huge compared to some areas in the south of England.

KG

Adrian_london

Although I'm not an expert in this field I honestly believe there is no sign of a crash at the moment.

Price rises in London are expected at 5% this year but again, it all depends on where you live.

Remember, even if there is a crash how big is the crash actually going to be????

People are thinking about what happened in about 1989. It might just be that prices will not rise anymore or might go down a few % a year.

Personally I think the UK has quite a strong ecomony compared to other countries in Europe but don't forget, when the USA sneezes te UK catched a cold.

If I was advising someone I would tell them to buy as soon as possilble (assuming it is to live in and not as an investment).

Good luck to anyone who is about to buy now...........and good luck to anyone who is waiting for a crash

anticlaus105

Adrian_london wrote:

Good luck to anyone who is about to buy now...........and good luck to anyone who is waiting for a crash

That comment is a contradiction.

Tojo_Ralph

anticlaus105 wrote:

That comment is a contradiction.

No different from wishing all the teams good luck at the start of a competition.

rizla01

richiethekid wrote:

....This keeps prices high as buy-to-let investors can afford to pay over the odds in the first place,

The buy to let INVESTOR will only pay the amount (or less) that he can recoup in rent on a basis of 10/12ths, to allow for repairs & costs.

It would be foolish to pay more unless they are of the belief that prices will rise, or that they may be able to increase the value of said prop by developing it.

I believe that we will see a small increase in values this year but at some time
Mr Brown will have to make some tax concessions to get FTBs on the market.

ManAtHome

There are still plenty of btl-ers who are 'giving it a go' either because everybody's doing it or their mates postmans child-minders milkman made heaps of dosh...

I think that nice Mr Brown (or GB(H) as I prefer..) will be more concerned with legging it (next door) before the fit hits the shan.

LyndsayJ

Where I live (North Essex) an experienced Estate Agent told me that there's been so much new building, particularly of 2 bedroom flats, that BTL-ers are finding they can't achieve a sufficient rental income to cover the mortgage and can't sell the flats for as much as they bought them for, even just a few weeks ago!

We've been trying to sell for a while now and no joy so far, even though we've dropped the price by nearly 30K so far!

techboy_2

Call me cynical if you wish, but as long as estate agents and mortgage lenders are making money from all of us who are buying a home, prices will continue to rise - simply because people have no choice but to pay over the odds to get a house knowing that if they don't someone else will.

In general though, prices aren't rising as fast as they have done in the past - I bought a house for £45k in 2000 (it's a bit cheaper in most of Scotland with a few exceptions) and sold it 3 years later for £75k - same price was on the market recently and went for just £80k. The area I moved to was one of the cheapest around until people found out - now more people are looking at the same number of houses and prices have therefore increased more lately than in years past. There is a sort of latency in prices, but eventually even in the cheaper areas, house prices rise more quickly when a more expensive area nearby becomes just too expensive.

House price crashes of the past have affected different areas of the country differently. Larger crash in SE after ridiculous spiralling price rises of previous years, smaller crash/dip in Scotland where price rises were not so large. If/when it does come I expect that we'll see a similar thing happening i.e. that the largest crash will be in areas that have seen the largest price increases.