House Price Crash Website

Woby_Tide

Jim_B wrote:

"But Housepricecrash people seem to have this dream that they will then swoop in and buy all the properties cheap."

No Dander, they have a dream that one day they will be able to buy a house without having to lie on a self-cert form, borrow tens of thousands of pounds from their parents, put themselves in hock to the tune of eight to ten times their salary and even be able to get a repayment mortgage rather than an interest only. The worst of it is that nobody actually beneftis from increasing house prices except people who are able to radically reduce their houseing needs i.e. people whose children are all leaving, or people who are dead.

But if you read all of Danders post you'd see how they pointed out that just because the properties suddenly drop in price the likelihood is rates will rise so mortgage outgoings will still be the same. The move to affordability was the best move ever as it is a much more accurate way to establish what people can and should borrow. Still referring to house prices in terms of 3 times a salary as being the only way forward is completely out of date. If a house happens to be 5/8/10(and just how many people do you know in at 8 or 10 times their salary) times your salary but your outgoings allow you to purchase it and be able to afford it if rates rise and you are happy with it then that's fine. If people aren't happy with that and only want to borrow 3 times their salary then again that's their choice, there is no guarantee it will be anymore affordable. Any crash is going to be just as unpredictable, what if the crash isn't as much as people need/are expecting

Jim_B_3

It's not what they want, though. It's hardly anyone's dream (except some people here, actually, who would see their savings do well out of increased interest rates). What they want is for houses to drop to the levels they've always been and for there to be a sound, healthy economy.

"If a house happens to be 5/8/10 times your salary but your outgoings allow you to purchase it and be able to afford it if rates rise and you are happy with it then that's fine."

It's not fine. It's led to houses costing stupid amounts of money, with nobody benefitting from this increase in prices except those already in who are now opting out. It's led to kids having to put off buying for a decade or so. It's led to a bubble that, if it bursts, will leave frightening amounts of negative equity about the place.

"what if the crash isn't as much as people need/are expecting"

Then things carry on as they are.

dander

But Jim if there's a crash it's most likely to be accompanied by various other economic problems and you and those other first time buyers may not even have jobs. How will you buy the houses then?

This is the point - a crash would happen if people are unable to afford housing, even at a lower price than now - even people who wished for a crash.

I have never said house price rises are a good thing. But I do maintain a crash means a lot of people suffering - even non-homeowners. That's not something I would wish for.

Woby_Tide

Jim_B wrote:

What they want is for houses to drop to the levels they've always been and for there to be a sound, healthy economy.

I'm missing something, houses were at constant levels until 6 years ago? And the economy was a constant healthy bundle of joy for everyone all the time?

(You're going to start making posts involving the phrases 'common sense' 'could leave your doors unlocked' 'good old days' aren't you?)

Jim_B_3

No Woby, prices have never been level. Inflation is a fact of our chosen economic system. However, bubbles lead to crashes, crashes are bad for everyone, thus bubbles are bad for everyone. So long as inflation and wages and so on all rise sort of level, things can sort of hold together.

Dander, if the economy tanks nobody will be buying houses and lots of people will be unemployed. A tanking economy is what happens when there is a crash. Therefore, we don't want a crash; you don't want one, I don't want one. Therefore, we don't want a bubble. Go back and read my post again; I don't think you read it very well as you think I'm a first time buyer. The key words I used were "my house".

I know I just said the same thing twice, but it is quite important.

dander

Fair point Jim! Although, we won't know if it IS a bubble until it pops. We can only wait and see :rolleyes:

Jim_B_3

That's the question; is this a bubble or have houses somehow become inherently more valuable? I tend towards the former, especially given the hysteria surrounding it (interestingly, if you're paying for a house in gold rather than pounds sterling, they've dropped a shedload in recent times, and gold, of course, is a funny kind of money). Thing about a bubble, though, is that you can never tell when it will pop. Hang on in there, FTBs. If it doesn't pop you'll be paying your mortgage for a few more years, but what the hell, what's an extra five years on a fifty year mortgage? If it DOES pop, standby with your deposits and hope the replacement government can manage an economy.

I said I'd be quite happy to see a crash; that's not so much because I want one, as I think the longer it's held off, the worse it will be, thus let's have it as soon as we can.

Woby_Tide

supply and demand suggests that houses have become more valuable though(whether the value has increased too much in comparison is another question), in the 50's owner occupier rates were 53%, the nineties 67%, who knows now. Comparing it to historical rates the economy and mindset has changed forever so it's hard to compare. House ownership seems to be seen as a right by some which isn't helping. Time will tell, something will happen but we aren't going to return to house prices being 3x wages ever i'd say, the lack of housing will put paid to that

dander

True. And one way to increase affordability is to supply more - just build loads more houses. But of course, that eats up all our countryside and people complain about that too.

Jim_B_3

Perhaps it's time for a proper expansion of house-building. This country does have vast amounts of open land that could be built on. I think the figures are round about 90% of the population living on 10% of the land. Obviously we can't build houses forever, but maybe if we got ourselves a competent government we wouldn't need to.