House prices could fall... Blog Discussion

This is a chat forum discussion on Martin's 'House prices could fall...' blog which you can read here.

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  • zar
    zar Posts: 284 Forumite
    Remember renting isn’t a crime.

    :T Thanks Martin, a very measured blog entry I think. There must be lots of people tempted to overstretch themselves to get into the housing market because they feel they have to, which is OK if they've thought about the risks but not so good when they think there aren't any.

    Renting really isn't all that bad if you are aware of the pitfalls - and those of us who aren't "homeowners" aren't second-class citizens either, although it occasionally seems as if we're viewed that way. Can I plug here the request to give somewhere for renters and landlords on MSE? - either a sub-board of our own or to rename the house buying/selling/prices board? I regularly see posts from tenants and landlords on there saying "I'm not sure if this is the right place to post but..."

    :shhh: There's somewhere you can go and get books to read... for free!
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  • System
    System Posts: 178,089 Community Admin
    Photogenic Name Dropper First Post
    Give me a rented house any day.:mad:
  • DrStep
    DrStep Posts: 50 Forumite
    Are you kidding?

    I have 3 kids, £20,000 of unsecured debt, drive a Saab Convertible, and I have just remortgaged to buy 2 more buy to let properties, one in Bristol another in Bulgaria to add to my existing 2 others.

    When these go up in value they will be my pension and pay off my debts. I suggest buy as many as the bank lends you!!! Otherwise they could go up even more!

    :beer: :T :beer: :T :beer: :T :beer: :T :beer: :T :beer: :T :beer: :T :beer: :T :beer: :T

    i d ignore people on as they are doom mongers who wont ever afford property as they missed the boat.

    Property is the BEST investment you can make, look at shares they are tumbling, whereas property is SOLID AS HOUSES. Property growth has slowed (but still climbing YoY figures show) as the mortgage lenders have predicted a soft landing, and they ARE RIGHT. We re about to move onto the next upswing leg as the market pauses for breath....

    Remeber what kirsty and Phil said on location location? As long as you follow their simple rules, you re on a winner, and I m on a winner! 47% profit in a few years here i come!

    This is a tongue in cheek post
  • System
    System Posts: 178,089 Community Admin
    Photogenic Name Dropper First Post
    Remeber what kirsty and Phil said on location location?

    What did Kirsty and Phil say on location location?
  • tonyg_2
    tonyg_2 Posts: 494 Forumite
    First Post First Anniversary Combo Breaker
    I am totally convinced that there will be a MAJOR CRASH in house prices. I feel it will happen within the next 2 to 3 years.

    This is backed up by a number of very influential economists. In the past there were some economists that predicted that they would rise and others that predicted they would fall.

    NOW, there are economists that predict they will be flat and others that predict that prices will crash. The tide has turned.

    The fact is that ridiculously high prices has ruined the fabric of society. High house prices have had a major major negative effect.

    There are those people who have benefited greedily by owning multiple houses reaping the benefits of year on year increases. Whilst there are other people, not only youngsters, who can not get on the first rung of the ladder of owning a single home or flat.

    Teachers can not afford to buy a home. Nurses can not afford to buy a home. Most people in these essential professions can not afford to buy a home. They move to lower house-price areas which helps to some extent. Youngsters can not afford to get married.

    All kinds of people can not afford to live a normal life. Totally because of the greed of people fuelled by the house-owning frenzy 25 years ago.

    House prices have divided society between the have's and the have nots. Thankfully house prices have no option other than to CRASH which will be a move to a much fairer society.
  • MSE_Martin
    MSE_Martin Posts: 8,272 Money Saving Expert
    First Post First Anniversary Combo Breaker
    Tony while I understand your sentiment. I don't agree that all economists predict either flat or drop. In fact last night I was on news 24 with the chief UK economist from Barclays Group who said "there's a limited supply of housing, which indicates house prices will continue to rise."

    Again as I note in the blog. The key is no one truly knows - its perfectly possible you are right Tony, then again so could the economist be. What people have to do is remember that there is no certainty and they must plan for the worst and hope for the best.

    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
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  • eels_2
    eels_2 Posts: 41 Forumite
    This is an easy one. If you are buying a house as a home its just that. If you are buying a house as an investment read 'gamble'. I bought my first house by myself for £44k and sold it for exactly the same 4 years later despite many improvements. I was happy as it was my home. My nextdoor neighbours sold theirs at the same time for a couple of £k less (smaller garden) but they had paid £60k for theirs and again made lots of improvements. If its happened before it can happen again.
    We are now about to spend a lot more on a more expensive property including a business. This is lifestyle change and again will be our home. Providing that, if prices fall, we don't NEED to sell it we won't have lost our because we will be paying what we think it is worth at the time.

    PS I've got a brand new Nissan and a Triumph motorcycle, 2 dogs and my only debt is my mortgage.
  • Aliktren
    Aliktren Posts: 306 Forumite
    Look at the geography as well not just the economics.....

    Growing population, fuelled as well by growth in divorce, limited housing supply not being replenished fast enough, limited space on island UK, high demand in certain areas influenced by transport links and jobs.

    And the thatcherite philosophy ingrained now into us all that we must own our own house. Good returns on investment mean owning multiple properties is likely to be a goal for many middle income families, further driving down available housing stock

    Put these together and you have good demand, there may be a dip at the lower end as first time buyers cant get on the ladder, but for people moving from an existing property, the above factors drive price growth in a resticted supply. All the signs, to my mind, is that prices will grow, they may grow slowly, but at the moment there is nothing that would influence a long term drive down in prices. Any drop will be taken up by investors taking advantage of bargains (I know I would). I sense the housing market now is a lot more like the stock market - over the long term you're a winner.

    Good demand will drive up prices in a limited market, I learnt this in A-Level economics.
  • This is a subject fairly close to my heart as I have just written a book about it!

    My experience is in stock markets and I have done a fair bit of work on markets generally. Markets are manic depressives and property markets are exactly the same - they just don't seem to be because of all that solid real estate and because they are slower moving.

    But property markets have crashed in the past and they will crash in the future - that is guaranteed.

    If you look at the market today the view "it can only go up" is prevalent + we now have many people with not just one property, but often several. How many more people are there to buy this stuff? How many more houses do these people want?

    In my view a top is very close and, coincidentally, stock markets gave a major sell signal last month. The stock marklet collpase which started around the turn of the new millennium did not have much of an impact on property but I think this time it might be a different.

    I am not trying to be gloomy, the only constant in this world is change and the key is to be prepared.

  • pjala
    pjala Posts: 420 Forumite
    First Post First Anniversary Combo Breaker
    Looking at the wider economy, as well as house prices in the US, check out this article:

    A bear market is when the stock market is in a continuous downtrend, and needs some really good economic news to get out of it. As noted, this is already affecting house prices in the US, and there is no historic reason to assume we are going to be isolated from house price falls.
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