House Price Crash

going2die_rich

mookybargirl wrote:

It's easy enough for people who bought a house before prices went up to talk about FTB and how we're (yes, I'm one) taking out 3/4x our salary or more, but do we have any choice.

YES! DON'T BUY WHAT YOU CAN'T REALISTICALLY AFFORD!

If their is a crash, I really can't see any banks paying out for mis-selling, they will have insured they are covered through their terms of the mortgage, especially after all the trouble of payouts with endowment mortgages. If you bought a property after October 2004 and recieved a KFI, it's stated in their about increases due to interest rises, so you can't make out you didn't see the pitfalls of changes in interest rates.

I don't own a property and I won't buy one now even though I'd get a mortgage for the simple fact that I'd be over stretched. It's called living within your means!

People are living by a "I want" culture, so go running to the banks for loans and mortgages for things they can't afford.

Interest rates have been low over the last decade so now they are going to start going up and up, so don't expect anything to get any easier in paying the monthly mortgage payments.

MickKnipfler

Is a gentle fall to a sustainable level really likely? My experience says that once a fall takes a grip then sentiment takes over and the fall wo n't stop until confidence rises that we're at the bottom and that could be a hell of a long way!

RHemmings

MickKnipfler wrote:

Is a gentle fall to a sustainable level really likely? My experience says that once a fall takes a grip then sentiment takes over and the fall wo n't stop until confidence rises that we're at the bottom and that could be a hell of a long way!

This is what I expect to happen. We've seen the madness of people expecting already overpriced houses to continue appreciate, which makes them willing to offer over the odds and push them up. Once they start falling, there will be a significant number of potential buyers who start thinking that if they wait a bit, they'll get a better bargain. Last time this happened even after houses were fairly priced again.

MascaraMinx

But is it not the case that there will still be more demand than supply (I am in the South East where this is definitely the case at present). I personally think the market will slow down because as you say prices can't continue to appreciate at the rates they have been, and likely enough we will see a little drop, but I think a crash is just wishful thinking for those pessimists (and tight @rses) waiting to cash in on other people's misfortune.

RHemmings

MascaraMinx wrote:

But is it not the case that there will still be more demand than supply (I am in the South East where this is definitely the case at present). I personally think the market will slow down because as you say prices can't continue to appreciate at the rates they have been, and likely enough we will see a little drop, but I think a crash is just wishful thinking for those pessimists (and tight @rses) waiting to cash in on other people's misfortune.

There was more demand than supply in Japan and Hong Kong, both of which experienced massive house price crashes. I've heard that if the population of the world was crammed into Texas, the population density would be less than Hong Kong. Japan has more space, but most people live in a rather small strip of land along the coast.

And why does the "misfortune" of home-owners mean so much, but the "misfortune" of young families priced out of the house market mean so little? I personally believe that if house prices crash, it will only be a few who suffer "misfortune", but if prices continue at their current high values, far more people will suffer "misfortune". See the previous examples of people who lose equity in their home being able to move up the ladder more easily after a crash than if there had been no crash.

MickKnipfler

Why are the estate agents full of houses for sale if there isn't enough?

dougk_2

MickKnipfler wrote:

Why are the estate agents full of houses for sale if there isn't enough?

Because lots of people move around , upgrade, downgrade, move abroad etc.

libitina_2

dougk wrote:

Because lots of people move around , upgrade, downgrade, move abroad etc.

So why are so many on the markets for months and months? Onlya few months ago they were 'flying off the shelves'

mrs_deadline

Because people are asking silly prices?

MickKnipfler

dougk wrote:

Because lots of people move around , upgrade, downgrade, move abroad etc.

Yes of course which ups both supply and demand by one each (accepting geographical differences). What I mean though is that there are new developments, papers and estate agents all full of available properties. Give me £750k and I bet I won't have any problem buying a house.