How many would buy more than one house if prices fell 60%?

brit1234

chucky wrote: »

make sure that you filter this one out Brit... but you're wrong for a change....

here's normal - it hit the long term average in Q1 2009.

That one has got the bubble distortion which on a 30 year greatly throws it out. You need to go back further in time to get more acurate data. If you used the last ten years the average would be far higher, if you used the last 100 it would be a lot lower.

purch

You'd need a hefty wodge of cash in the bank that you were prepared to gamble after seeing prices tumble 60%.

Not necessarily 'gambling'

If prices fell by that much, the yield on your cash would probably make a BTL a no-brainer.

I agree that obtaining funding in those circumstances would be difficult, and personally I have always considered leveraging a BTL a pretty silly idea.

1984ReturnsForReal_2

nearlynew wrote: »

(thanked you by mistake, by the way)

You were going to report the OPs thread?

Disgusting..

DaddyBear

chucky wrote: »

make sure that you filter this one out Brit... but you're wrong for a change....

here's normal - it hit the long term average in Q1 2009.

Ahh, the bulls favourite line..... the long term trend line. Its a pity because it is otherwise a great graph, shows 2002 to 2007 for what it is.... insane bubble.

To those who believe in this trend line..... you do realise that its an exponential curve???? If you acually believe that house price averages are going to continue on an exponential curve then you need therapy.

Here I'd like to used bacterial growth as my example. If conditions allow, bacteria grow at an exponential rate. If all the bacteria on the planet suddenly had favourable conditions and started to grow at an exponential rate the entrie planet would be swamped in bacteria within hours. So whats the main limiting factor on bacterial growth and the reason that exponential growth is not sustainable? Access to food.

Now take the housing market. Its "food" is credit. We reached the peak of credit avaiability in 2007 and will never return to those levels. So the conclusion? Property increases at exponential levels are a thing of the past and the trend line on that graph is purely theoretical.

Thrugelmir

If house prices were to fall that much. Most of the country would be earning the minimum wage.

And I would emigrating abroad.........

Cleaver

Blacklight wrote: »

House prices drop 60% over night. Would you buy more than one?

If house prices dropped 60% overnight I reckon the nation would have bigger fish to fry than worrying about whether to purchase a pad by the sea or a BTL investment.

DaddyBear wrote: »

Houses should be seen as a home, not an investment.

They should be. But they're not by everyone are they? In the same way it would be nice if no one made a profit from water, food, shelter, heat, light and of lifes other necessities, but we are where we are.

And someone has to see a house an investment in order for others to be able to rent it from them.

DaddyBear wrote: »

Taxation needs to be used to make houses less attractive as an investment and easier for people to purchase a home. No stamp duty on a first property but significant stamp duty, say 5% on any further properties, plus an annual taxation related to the purchase price, say 2% per year.

I agree in principle that more should be done to make people think twice before buying a second home or a place to rent out. More stringent conditions, a landlord register, people buying second homes having to spend at least x months a year in the home etc. etc. Not sure if financial penalties are the right way to go though, unless you just want people's rent to be higher or for even richer people to buy second homes.

chucknorris

I can't imagine a scenario where prices fall 60% in one day, I would have to get my head around that first, then ask myself would I buy in that scenrio?

The only scenario I can come up with is that the daleks are about to invade, so I definitely wouldn't buy a bungalow.

Cleaver

chucknorris wrote: »

The only scenario I can come up with is that the daleks are about to invade, so I definitely wouldn't buy a bungalow.

Maybe Brit can add this to his signature?

SHARED EQUITY/OWNERSHIP scams designed to keep prices high and pay extra costs :mad:
PROPERTY BOTTOM - History tells us that property stagnates for years at the bottom, there will be no rapid rises at the bottom, don't rush.:think:
WHEN PROPERTY PRICES DROP 60% don't buy a bungalow! Daleks will be around so make sure you get somewhere with stairs.

DaddyBear

Cleaver wrote: »

unless you just want people's rent to be higher or for even richer people to buy second homes.

People can only afford what they can afford in terms of rent.
It will also make house prices cheaper so that more can afford to buy rather than rent. There will be other benfits, such as increased rent for students which will put pressure on Universities to house an increased percentage on campus.

Graham_Devon

ukcarper wrote: »

You lose your argument when you say property is twice the average price now

Glad I didn't say that then!