House Price Crash

F_T_Buyer

MSE_Martin wrote:

Hi folks

I've been filming all day - for other programmes - so only just got back. I think Im going to write a blog explaining what I said and my thoughts on it - should be up tomorrow. Only just got to my desk now and got about 5 hours work to do!

Martin

Nice work today Martin - you got a few people flustered.

Despite peoples arguments for and against property prices, the risks and potential downsides should not be dismissed!

:money:

RHemmings

MascaraMinx wrote:

I see your point here. As a recently married almost 30 year old with a decent job who has only just been able to buy her first place I can relate to what you're saying. I just don't relish the prospect of being financially devastated should this "crash" occur simply because we couldn't wait for the market to stabilise as we want to get settled in our own home. And I can't help feeling a lot of people are sitting on the edges of their rented armchairs chuckling with glee at the prospect (not directed at individual poster in particular)

I'm looking forward to reading Martin's thoughts on this in more detail, will be waiting for his blog........

You did say that your comment wasn't directed at any one person in particular. But I'd like to point out that I really really wish that this house price "boom" had never happened. If the government had done what they said and prevented another property bubble inflating, then that would have been better for all. People would have been able to buy the houses that they need at prices they could afford.

In some ways, it's like having your child go on a school trip. And then hearing that the bus has crashed and half the children are in hospital. It's human nature to wish your own child unhurt, while in reality this is wishing ill on another family. But what can you do? Pretent you aren't relieved if your own child is unhurt?

As I see it, the damage has been done. People who bought at current prices have, in my eyes, taken a significant risk of effectively losing a lot of their wealth. I don't see this as "rich so-and-so's" losing the ability to afford the second Ferrari, but people losing the ability to get their children the education they want for their children, some comfort in their old age, and similar. In their eyes I am the one taking a risk, of being priced out permanently by waiting. But my opinion is that a correction is inevitable. In my world view, there is very little that can be done for people who have bought houses they cannot afford. (I'm not saying that you cannot afford your house) or have gambled their future on a house purchase at current prices in smaller ways. But the sooner the correction comes, the fewer people will buy at high prices, and the fewer people hurt in the crash.

But would you really be devestated? Is the house you have now the best house you ever want to live in? Because if prices do crash, you may find it easier to make the next step up the "property ladder" if the next rung gets closer.

But there are many people involved with property whom I really would like to see experience some of the troubles that they have caused for others. The presenters of the "property !!!!!!" programs. The supposedly knowledgeable commentators who say that "property never goes down" and the like. Because a lot of the people who have borrowed at 5 times their income are just ordinary everyday people trying to do the best for themselves and their families. And is Kristy Aslopp really going to be all that inconvenienced when a crash comes? Or will the two-faced slapper (self-conciously using words that describe how I think of her) just start a second career turning up in I'm a celebrity get me out of here?

MascaraMinx

RHemmings wrote:

You did say that your comment wasn't directed at any one person in particular. But I'd like to point out that I really really wish that this house price "boom" had never happened. If the government had done what they said and prevented another property bubble inflating, then that would have been better for all. People would have been able to buy the houses that they need at prices they could afford.

Can't argue with that.

RHemmings wrote:

But there are many people involved with property whom I really would like to see experience some of the troubles that they have caused for others. The presenters of the "property !!!!!!" programs. The supposedly knowledgeable commentators who say that "property never goes down" and the like. Because a lot of the people who have borrowed at 5 times their income are just ordinary everyday people trying to do the best for themselves and their families. And is Kristy Aslopp really going to be all that inconvenienced when a crash comes? Or will the two-faced slapper (self-conciously using words that describe how I think of her) just start a second career turning up in I'm a celebrity get me out of here?

Wow do you know her personally? She must really offend you!!!

RHemmings

MascaraMinx wrote:

Wow do you know her personally? She must really offend you!!!

I don't know her personally. I'll have to think up some new insults that don't trash my reputation by implying that I know her in any way.

Gorgeous_George

F_T_Buyer wrote:

Nice work today Martin - you got a few people flustered.

Despite peoples arguments for and against property prices, the risks and potential downsides should not be dismissed!

:money:

I'd wait for the blog. I saw the programme this morning and agreed with all that Martn said.

He did not say that there would be a crash (or would not be a crash). He doesn't know and whatsmore, anybody who claims to know is lying.



GG

Gorgeous_George

IIRC I was offered 3 times my salary back in 1985. 100% mortgage of £24K was about half my net pay (including the endowmment).

Interest rates were 16.5%.

Why are 5 or 6 times multiples so unrealistic when interest rates are so low?



GG

F_T_Buyer

Gorgeous_George wrote:

I'd wait for the blog. I saw the programme this morning and agreed with all that Martn said.

Yes, of course.

I think it flustered those who think prices will rise continously at their current rate. Especially those who have based a business model on it.

Gorgeous_George wrote:

IIRC I was offered 3 times my salary back in 1985. 100% mortgage of £24K was about half my net pay (including the endowmment).

Interest rates were 16.5%.

Why are 5 or 6 times multiples so unrealistic when interest rates are so low?



GG

Because interest rates are not guaranteed to always be low.

MORPH3US

Excuse the ignorance, what does IIRC stand for?

Been meaning to ask for ages!

M

njwd

If I Remember Correctly

Gorgeous_George

F_T_Buyer wrote:

Yes, of course.

I think it flustered those who think prices will rise continously at their current rate. Especially those who have based a business model on it.

I'll look forward to the blog.

I'm not sure how many people have based their business models on house price inflation remaining at the ridiculously high rates that we have suffered/enjoyed over the last few decades. Not many I would hope!



GG