House market crash!

mixmaster

Hi all,

Anyone done a great deal of research in this area? I've done a bit can can see the obvious trend and that a crash is imminent. But any ideas of how long it will be?
I'm quite young (23) with no house, and will be looking to jump in as soon as the market bottoms out but would like to have enough time to save a fair wedge for a deposit. Once the market turns which it seems to be doing right now, how long until it reaches a minimum? Are we talking about a few years?

Thanks guys

Sarahpuggy

Whereabouts in the country are you?

I think this topic has been discussed alot so you should be able to find some useful threads around here somewhere.

Im in SW London/Surrey borders and everything is selling in hours/days/weeks at most. Everything is just being sold asap...so who knows whats going to happen!

mixmaster

I live in the north-west region of the country, the market has risen a lot in the past 3-4 years but seems to be levelling off now. How much of an overall drop in price are we looking at? I've noticed some experts have predicted upto a 40% drop in prices!

wobbley

Any rumours of a crash are just speculation. It could crash, or it could flatten out or it could just continue rising. Fact is NOBOBY actually knows and if they say they do then they are full of ***t! Many people may be able to make a very well educated guess, but it's still a guess.
If you wait for a crash before investing then you may well be waiting a very long time,,,,, or you just may be lucky.

F_T_Buyer

Do you realise there is a site dedicated to this? https://www.housepricecrash.co.uk

I agree prices will fall, and they should be now if it wasn't for the interest rate cut last August. All it has done is push the fundermentals more out of kilt, meaning any crash would be far harder.

But still, it does amaze me how the media is spinning away like crazy. Just like the BBC reported the RICS survey after the interest rate cut. And how the banks are lending more and more recklessly, including sub prime lending where no one previously would of even dared suggest actively targetting lending to this group.

But with debt growth way over 10% a year, and wage growth 4% a year... you know something's up. Now with joblessness well over 5million, inflation brewing under the surface, bankruptcies, bad debt, company failures, repossessions... the list goes on.

Oh, and it will take around 5+ years to the bottom...

mixmaster

Thanks for the info, will have a read through the site. It is very frusatrating how at the moment the average house price is way more than the 5 X avg. salary, which is pretty much the max any lender will give out! Don't see how they expect the market not to crash?

BobProperty

mixmaster wrote:

Anyone done a great deal of research in this area? I've done a bit can can see the obvious trend and that a crash is imminent. But any ideas of how long it will be? ....

Would you tell us how you came to this conclusion? What figures led you to this?
I do agree by the way and think the nearest comparison is the last crash which would indicate 40%+ fall lasting 5-7 years, most of the fall in the first couple of years.

lynzpower

Im in london so I guess we do have a warped market here, that is different to the rest of the country. Salaries here continue to rise 30k for a receptionist/admin job is not uncommon at all whereas in manchester where im from I reckon 20 would be pretty much top wack. As a result there are always people able to buy.

In saying that though, a lot of what Ive been looking at ( to buy, not rent) seems to be ex - BTL ,which may well keep the FTB market moving for a while.

asandwhen

F_T_Buyer wrote:

Do you realise there is a site dedicated to this? https://www.housepricecrash.co.uk

I agree prices will fall, and they should be now if it wasn't for the interest rate cut last August. All it has done is push the fundermentals more out of kilt, meaning any crash would be far harder.

But still, it does amaze me how the media is spinning away like crazy. Just like the BBC reported the RICS survey after the interest rate cut. And how the banks are lending more and more recklessly, including sub prime lending where no one previously would of even dared suggest actively targetting lending to this group.

But with debt growth way over 10% a year, and wage growth 4% a year... you know something's up. Now with joblessness well over 5million, inflation brewing under the surface, bankruptcies, bad debt, company failures, repossessions... the list goes on.

Oh, and it will take around 5+ years to the bottom...

I think you are right about the 5 years to bottom bit but after 5 years the bottom will probably be a current levels ish give of take 5%

I can see where you are coming from with this spin of the media but some of the figures you have quoted here are also media spin (5 million joblessness news of the world today)

No body really knows for sure but would say you are better off saving for the next few years and getting on at current level in a few years time when you have saved enough - I wouldn't hold off for a crash because it may never happen

F_T_Buyer

wobbley wrote:

Any rumours of a crash are just speculation. It could crash, or it could flatten out or it could just continue rising. Fact is NOBOBY actually knows and if they say they do then they are full of ***t! Many people may be able to make a very well educated guess, but it's still a guess.
If you wait for a crash before investing then you may well be waiting a very long time,,,,, or you just may be lucky.

It's hardly guessing is it. Most predicitions, like mine, are based on fundermentals. It hardly a rumour either, more like a warning.

mixmaster wrote:

Thanks for the info, will have a read through the site. It is very frusatrating how at the moment the average house price is way more than the 5 X avg. salary, which is pretty much the max any lender will give out! Don't see how they expect the market not to crash?

Here's a chart that sums up cycles:

F_T_Buyer

asandwhen wrote:

I think you are right about the 5 years to bottom bit but after 5 years the bottom will probably be a current levels ish give of take 5%

I can see where you are coming from with this spin of the media but some of the figures you have quoted here are also media spin (5 million joblessness news of the world today)

Here's the link: http://thebusinessonline.com/Stories.aspx?The%20real%20unemployment%20figure%20in%20Britain%20today&StoryID=55D6B085-DDCE-4238-AF09-F0712F7895F4&SectionID=F3B76EF0-7991-4389-B72E-D07EB5AA1CEE
Hardly news of the world material. Just smoke and mirrors data from out PR media machine - the government.

I agree in that you will always have some people out of work, but those figures are akin to recession levels, and this is after how many years of growth?

I very much doubt wage inflation will bring price back in line (it will of course be part of it), if wages go up it just means more and more jobs will go to asia (china, india) as labour is far far cheaper. This will result in more unemployment, and more failing businesses.

If the the BoE let wage inflation rise, they will bring it back down with higher interest rates. You've just seen one rise, and that's the start.

asandwhen wrote:

No body really knows for sure but would say you are better off saving for the next few years and getting on at current level in a few years time when you have saved enough - I wouldn't hold off for a crash because it may never happen

I know it can be a difficult decision if you live in places like Northern Ireland, as prices are rising and probably will do for the next year or so. But i've no doubt that will follow England.

In some areas prices have hardly risen since summer 2004 (the claimed peak by the bears). Example, Hampshire has only risen just over 1% in two years. Now who's better off? Those who bought summer 04 having paid buying costs, maintenance, or those that have rented since?

~~

The one thing readers should take from threads like these is just don't borrow too much. If prices do fall, your next house will be cheaper. If rates go up, you'll be fine as you've not borrowed too much.

It's those deperate to buy their first property, and go ahead and borrow 5+ times their income that will be hurt. It's those that should take these warnings seriously!