Housing market drop

toucanspeed

At the very best the market is going to do 3-6% this year. Over the next 2 yrs, I predict a drop of 25%+ .

Irrespective of whether it does or not, it's not going to go up 10% IMHO. Why do we want to own our houses and not rent? Can you not invest better than 3-6% (or even 10%) elsewhere -the stockmarket?

Think for a while... if you invested 300k in the stockmarket and it started to fall, you take your money out that day (minute) You can't do that with a house, it takes months to sell.

In other words, why not sell your house, live in rented accomadation for 2 yrs and invest your (hard earned) equity in the stockmarket? You could do a lot worse.

An Englishman's house is his castle? Maybe be don't be sentamental about it.

The housing market in the 80's. Shares went up and down...the dot com 90's. The writings is on the wall. BTL's of the 00's is it starting again? It only need the base rate to go up and the market is dead!

When you see the bandwagon, it's too late to jump on it (or off)

cattie

Well people have been predicting a big drop in house prices now for a good few years & it's sounding a bit like a worn old record. Yes if you keep on & on year in, year out & manage to live long enough, there may well be a crash in property prices at some far distant point. :rolleyes:

The majority of people buy houses as a place to settle down in. It offers you security & a choice of type of property & location which you just don't get with rented property.

sarah_elton

toucanspeed wrote:

Why do we want to own our houses and not rent?

1) Because it's *ours*. Because we can redecorate. Because someone else can't chuck you out. You say don't be sentimental about it, but it's a personal choice. Why did I just buy a DVD when I was out shopping instead of invest that money? Because I wanted to.

2) One thing I can't get my head round with arguments like yours, is that the part of the monthly spend on rent is dead money, not money that can be invested - only any spare cash can be. I recently bought my first place. Say the market only rises with inflation for the next ten years - I lose the interest I've paid on my mortgage in that time. But if I'd rented for the next ten years I'd have given my landlord £63,000 (that's ignoring inflationary rent rises), not have invested that money.

Not sure I explained #2 clearly - do others see what I'm getting at? Of course if there's a crash #2 doesn't work, I know.

toucanspeed

Sarah, I do know where you are coming from, believe me. And yes it is dead money. But doing the sums for my situation, in simple terms, if i get it wrong over the next 2 years then I loose £12k + whatever HPI. If I get it right, then who knows how much I could have saved 100-200k. My first house I had for 10 years and sold it fo what I paid. I feel that I've ridden the housing market to the top (of where I see it) and am now jumping off. Much in the same way as shares I guess. No one sees it coming I'm just doing what 'I' think (and canvassing opinion)

sarah_elton

toucanspeed wrote:

But doing the sums for my situation

Exactly it - there is no single answer to your original question as it depends on individual circumstances.

And by all means yes - a well timed jump off the ladder can work wonders. My parents sold up in London in 1989 when dad's job relocated and they needed to move out to Essex. They couldn't find anywhere they liked so they rented for nine months, at a cost of £9,000. In that time, prices dropped and they saved £40,000 on a newbuild they were waiting for. That was pure luck - they weren't thinking about the state of the market so much as finding the right place for them.

Timing though is everything, and if the market continues to stagnate for the next two years, it's only worth jumping off if you have a decent amount of equity built up to invest, which is going to be people nearer the top of the market.

Plus, over simplifying it, everyone does that, demand for rentals goes up, BTLers come back, and the market goes up again....

Jorgan_2

People have been suggesting this for years, some did it and found they couldn't afford to buy back the houses they had sold two years earlier. I guess it all depends on if you see the roof over your head aas an investment to be traded or as a home, many see it as a home. You pays your money & takes your choice.

toucanspeed

Heaven forgive me if I'm fuelling the BTL market.

You are of course right. I'm seeing my house as an investment. I just want to be smart this time (should that be shrewd). I have got a lot of equity, but have so in 2 bounds from renting in 8yrs. All by luck with investing and hardwork with renovations. I don't want to loose it.

I'm trying to be pragmatic, if your house were shares in say steel, would you pull out now? That's all I'm doing.

sarah_elton

toucanspeed wrote:

I'm trying to be pragmatic, if your house were shares in say steel, would you pull out now? That's all I'm doing.

That reminds me, anyone know tonight's Lottery numbers?

At best you get a much better house to live in, and are more wealthy in a few years. At worst you get a scabbier house and are worse off. Personally I think you'll be slap bang in the middle between the two.

The only difference between choosing a property as an investment and other forms, is that we're talking about where you live. Are you really 100% non-sentimental about it?

meanmachine_2

What a boring thread.

The OP has just sold so needs to convince themselves and others that they've done the right thing.

Sarah_elton has just bought so needs to convince herself and others that she hasn't just boobed by buying an overinflated asset.

Same old same old.

I'm in the middle. I don't see a house as an asset, but I'm not an idiot and think timing is everything.

I look forward to the day when *no one* sees housing as an asset or an investment.

sarah_elton

It's my home. By definition it's an asset, like everything else I own. I didn't however buy it as an investment. I'm not in it to try and make thousands - and won't in the current market.

Absolute worst case - interest rates skyrocket, I can't afford the mortgage, am in negative equity, and get repossessed. Would it be a horrendous experience? Yes. Would it ruin my life? No, it's money, I rent and start over. I don't have a family to worry about right now and I'll survive. Will you be saying 'I told you so'? Probably. Obviously I don't think this is going to happen though or I wouldn't have bought.

I'm not trying to convince myself - believe me, of everything in my life it's the thing I'm losing least sleep over.

If a thread's boring, don't read it.

Tassotti

meanmachine wrote:

I'm in the middle. I don't see a house as an asset, but I'm not an idiot and think timing is everything.

I look forward to the day when *no one* sees housing as an asset or an investment.

The house is an asset. The mortgage you have on that property is a liability. Get rid of the liability and what are you left with?

You'll be 'looking forward' for the rest of time!!