Respected Analyst : House prices 'could drop another 55%' and leave Britain bankrupt

ukcarper

Been a bit of wage inflation since then

dervish

kt63 wrote: »

I'd love house prices to fall another 55% as I'm looking to move to a bigger house with a garden (due to birth of a child). However I don't actually think they will.

Sometimes I think people on this board confuse what they'd like to happen with what is likely to happen. I'd like it if the value of my house fell to £1. That way I'd be able to buy a house ten times as nice for £10. However I don't think such a scenario is likely.

no but house prices are driven by AFFORDABILITY.

A few years ago loads of mortgages giave you that affordability. Now they have gone.

New levels of affordability will dirve house prices MUCH MUCH lower.

dervish

ukcarper wrote: »

Been a bit of wage inflation since then

no, not that much.

And anyway deflation is soon to arrive here.

Graham_Devon

ukcarper wrote: »

Been a bit of wage inflation since then

And a lot of jobs lost since then too.

Plus a hell of a lot of people in neg eq which will simply stagnate the market, bringing house prices down even further as less can buy.

I don't see why so many seem to think that theres loads of people out there with massive pots of cash in the bank, with a job, with a salary that will cover the 4x income multiplier.

There hasn't been this massive load of people in the last decade, so why all of a sudden now!?

jay3_2

An interesting debate - I will admit here and now that I have no idea where house prices will end up (even less of an ego than GD!)

Would anyone like to comment on the following "variables" however: (a) restricted house building, (b) continuing fascination with property generally, driving demand (even if severely mitigated by mortgage availability)>?

IMO, these may be fleeting, short-term factors (a final hope, before capitulation?) Any ideas?

StevieJ

dervish wrote: »

no but house prices are driven by AFFORDABILITY.

A few years ago loads of mortgages giave you that affordability. Now they have gone.

New levels of affordability will dirve house prices MUCH MUCH lower.

BR 0.5% :rotfl::rotfl::rotfl: You got a habit of saying the wrong thing at the wrong time :DThis is about buyers liquidity not affordability, they need big deposits whereas the actual mortgage costs would be fairly reasonable.

Really2

Graham_Devon wrote: »

Why is it insane to think this could happen again? It's happened before.

It's happened in America. Why can it not possibly happen here?

I thought the average drop from peak in america was less than 30%

What can happen here like America?



I dont think the average US property is any where near 1997 prices if that is what you are trying to say.

ukcarper

dervish wrote: »

no, not that much.

And anyway deflation is soon to arrive here.

If you say 3% per year 12 years approx. 1.4 times 80k X 1.4 =112k

chucky

Graham_Devon wrote: »

Why is it insane to think this could happen again? It's happened before.

It's happened in America. Why can it not possibly happen here?

different country, different economy, different culture, different laws

it's like saying what happens in Saudi Arabia can happen here - the obvious difference is where's the enourmous oil supply. so you can't compare the UK and US.

beingjdc

StevieJ wrote: »

BR 0.5% :rotfl::rotfl::rotfl:

Cheapest actual mortgage is about 3% though, and that's variable so if the Base Rate goes back up to 5%, you're lumbered with a 7.5% mortgage. Cheapest fixes still up around the 5% mark including fees, and that's with a good deposit.