House market crash!

cuffie

Well said.
xx

F_T_Buyer

I'm calling the top!!!

Well, I think the nominal peak in house prices will happen in the next three months, as it will take that long for the rate rise and sentiment to feed through.

A few more months of positive HPI, and the it will be negative, I.e. prices will not go over the price within the next three months until the next cycle starts (years away).

No we just need to debate which index i'm refering too lol. I'd go with the land registry, Q3 will be the peak...


Anyone else prepared to put their 'peak' predictions on paper (well internet)?

richgirl

Gorgeous_George wrote:

BBC reports that the UK population broke the 60 million barrier and that's those we know about.

More people = more houses needed.

The crash may be further away than some would like.

If you are on the ladder, you have set the point where you will pay for the rest of your time in home ownership. A crash will make your next move cheaper. A rise and your 'paper profit' increases but next move is more expensive. Delaying buying means you have not set the point where you will pay for the rest of your time in home ownership. If the crash happens, quids in. If not, quids lost to rental and quality of life should count for something.

I don't want to rent.



GG

Lets do a few sums

House worth 200,000 falls by 10% over 3 years.
loss in real terms is £36k (3% inflation). So £164k in todays money.

200,000 savings at 5% = 231,000 in 3 years. In real-terms value is £212,000

Difference is £48k or 26% of a 180k house.

Now a 20% drop in house prices would imply a 41% difference ! Between owning and not owning.

Worse case of 30% implies - 60% or £85k against a £140k property.

So there definetly ARE risks in owning property when it is falling as against rising.

Gorgeous_George

That's not disputed - providing your home is an investment and not somewhere to truly call home. My 15 year mortgage is costing me about £800. I pay about £1200 to reduce the term. I initially bought when I was 22 years old. If I'd waited till the time was right I might still be waiting.

Whilst unlikely, prices could continue to rise for a few years yet and then the sums are somewhat different.

BTW, where do you return 5% tax-free on £200K?

You pays your money and takes your choice. Prices go up and down. I cannot put a price on the satisfaction that I feel when I'm in my home.



GG

richgirl

You only have to look at the crazy products coming out to know that housing has peaked !

I.e. Kent Reliance Mortgage that you never pay back ! I.e. interest only where the mortgage is passed onto those that inherit the property !

So whats the point in buying ? Might as well rent !

PoorDave

richgirl wrote:

Lets do a few sums

House worth 200,000 falls by 10% over 3 years.
loss in real terms is £36k (3% inflation). So £164k in todays money.

200,000 savings at 5% = 231,000 in 3 years. In real-terms value is £212,000

Difference is £48k or 26% of a 180k house.

Now a 20% drop in house prices would imply a 41% difference ! Between owning and not owning.

Worse case of 30% implies - 60% or £85k against a £140k property.

So there definetly ARE risks in owning property when it is falling as against rising.

Nobody disputes that there are risks!

However, most people who go to buy a 200k house do not have 200k in cash to purchase it with. If comparing property vs cash savings or any other investment, you should do your sums agaiinst the actual cash available, otherwise the comparison is a bit meaningless.

Mortgage lenders are only going to offer you the cash if you're going to buy a house with it, not for you to keep it in your probaby 4%ish after tax savings account

PoorDave

F_T_Buyer wrote:

I'm calling the top!!!

Well, I think the nominal peak in house prices will happen in the next three months, as it will take that long for the rate rise and sentiment to feed through.

A few more months of positive HPI, and the it will be negative, I.e. prices will not go over the price within the next three months until the next cycle starts (years away).

No we just need to debate which index i'm refering too lol. I'd go with the land registry, Q3 will be the peak...


Anyone else prepared to put their 'peak' predictions on paper (well internet)?

I go for 2 years after whenever F_T_Buyer says!

F_T_Buyer

PoorDave wrote:

I go for 2 years after whenever F_T_Buyer says!

Ok.

But what makes me different to all the other bears, is I said the market would not collapse in 04/05 because interest rates would go down, and they did. When rates finally went down in 05, I said the market would rise quite strongly.

Although I wasn't on MSE at the time. I did get alot of grief for going against the bear heard!

dougk_2

Even if prices do fall they will go back up so in my view it don't really matter.
If you buy now and get a 10 year fixed rate mortgage then if these "random" predictions come true you will have been paying a lower interest rate to those buying when the prices are lower and you will have had your own home for a while and have paid a chunk of the mortgage off. Also at the end of the period the house prices will be back up again!

EagerLearner

As a first time buyer in Brighton, I can safely say that demand does not equal supply here. Everyone we know is in the same boat and can't buy somewhere without mortgaging to the hilt, then running the risk of another interest rate rise. Yes we could move out of Brighton, but Eastbourne, Worthing, Burgess Hill etc all have high prices too, plus we have lived here for over 15 years and don't want to leave jobs/family/friends just because the market is in a bad way for FTB.

We tried 3 months ago and the purchase fell through as the only property we could consider/safely afford was in a run down part of Brighton, and it didn't get the green light from the surveyor due to the area, not the property itself.

We are currently renting a 1 bed property that we'd never be able to buy as it's large and has a garden @ £650 a month, able to put £400 in to savings per month to beef up our existing 5% deposit.

If we buy, we estimate it'd be around £720-£750 a month mortgage, plus £150 insurances/maintenance etc and only putting £100 or so a month into savings, which if an emergency happened would be very dangerous ground.

We're holding fast to see if after December when our letting agreement ends, whether we could buy early next year.