House Price Crash 4

beanieandme

lynzpower wrote:

You cant even make generalisations across a county. My parents live in Cheshire ( by the airport, which has always been pretty good, good schools, commuter links countryside etc)

Its a completely different market where my parents are than other parts of cheshire- say parts of Stockport, or warrington, or Chester.

I can talk about my parents village with some passing interest/authority, but I couldnt tell you whats happening in Chester.

Some parts of Cheshire are not as desirable as parts of South Yorkshire and vice versa.

Yeah, but in general, Cheshire is more desirable, or should I say dearer. I know, same applies here, certain parts are more desirable than others, but the further up north you go, the cheaper it is.

lynzpower

beanieandme wrote:

Yeah, but in general, Cheshire is more desirable, or should I say dearer. I know, same applies here, certain parts are more desirable than others, but the further up north you go, the cheaper it is.

Generalisations.

As far as I can tell Edinburgh is more expensive than some parts of london.

cordial

Ok, we're one day and 30 odd posts further along the thread from my comment of yesterday which stipulated that all of these 'price crash' threads actually add nothing to our understanding of when and by how much prices might 'crash'...

Genuinely, I've been trying to act as an honest observer, possibly with a personal interest in such an event - like a potential FTB (not a million miles out, as I'm considering BTL at the moment).

When I made my post yesterday I couldn't see any comment which would have helped me - and thirty posts later I still can't.

It's all hot air, guys. All hot air.

I understand the fascination - but the difference between speculative comment and insider information is ALL the difference. Ask any market trader.
I'll leave you to it.

Alan_M_2

I refer you to post #38 on this very thread where your concerns over the substance of replies was addressed.

However I will add this, what are you actually expecting to read that will give you a more informed decision?

Who and how could anyone provide "Inside Information" on something like the housing market? Short of approaching Mystic Meg I can't think of anyone, well maybe Mervyn King, Gov of the BoE, who openly states the market is overvalued and only getting more overvalued.

I'm genuinely interested, what would you like to read on here?

mr.broderick

lypsey wrote:

Mr Broderick

I am making a big assumption here but you don't mention a current house so I am guessing you are a first time buyer. When I was 20 or 21 I waded in big time on a very flash apartment that at the time my employer bent the truth on my salary and I was stretched to the limit (and a bit further). I was in a rush to buy the day before MIRAS which was double tax relief ended. This was a signal for the last crash in house prices

It took me 9 years to get out of negative equity. I bought in 1984 and it was 1993 before I could move. My advice to you is think very carefully before you leap into the unknown and just say " I am in for the long term "
What happens if you have 100k negative equity . Why shouldn't the market drop to 2000 levels. What happens if :-
1) You need a bigger house to start a family
2) Unemployment is sharply rising now , say you are made redundant . If you have 100k debt (if you have neg equity) then I can assure you , you will not be able to sell because you will be bankrupt or downsize because you will NEED a BIGGER mortgage to settle the bill
3) What happens if your employment moves you 100 miles up the road and you need to move house . You won't be able to move because I assume like most people you are mortgaged to the hilt
4)If your family needs you and you need to move closer to home

There are so many variables and I could probably think of another 10 reasons why you might need to move . Please remember that your wages may only go up 2% a year so the chances of increasing your mortgage are relatively low

I made the same assumptions as you when I was young that the market would always go up , my family bailed me out and I learnt a hard lesson so please be careful you never know what is round the corner.

Also remember
1) Global inflation is rising
2) Global interest rates are rising , for the last decade we have had lower than "average" interest rates and some stage they will have to rise
3) Unemployment in the UK is rising
4) Most importantly the moving trend since the 1930's has traditionally been you can borrow 3.5 times your salary to get a mortgage. This has worked very well for the last eighty years and we have avoided BIG crashes but that ratio is 6.8 times salary. It will return to normal levels and wage inflation will not do that for a long long time. Therefore house prices have to come down
5) it is well documented that ftb'ers are priced out of 9 out of 10 towns. The market will not sustain this . You have to have FTB'er to keep the ladder moving

I do not want to scare you but I just wanted to pass on the mistakes I made

Thanks lypsey for an excellent post.
No we're not ftb, dont worry im not stretching myself financially but thanks for the advice, hopefully there are other members on here who will take heed of some excellent advice.

lynzpower

cordial wrote:

Ok, we're one day and 30 odd posts further along the thread from my comment of yesterday which stipulated that all of these 'price crash' threads actually add nothing to our understanding of when and by how much prices might 'crash'...

Genuinely, I've been trying to act as an honest observer, possibly with a personal interest in such an event - like a potential FTB (not a million miles out, as I'm considering BTL at the moment).

When I made my post yesterday I couldn't see any comment which would have helped me - and thirty posts later I still can't.

It's all hot air, guys. All hot air.

I understand the fascination - but the difference between speculative comment and insider information is ALL the difference. Ask any market trader.
I'll leave you to it.

Cheers :beer:

Spendless

lynzpower wrote:

You cant even make generalisations across a county. My parents live in Cheshire ( by the airport, which has always been pretty good, good schools, commuter links countryside etc)

Its a completely different market where my parents are than other parts of cheshire- say parts of Stockport, or warrington, or Chester.

I can talk about my parents village with some passing interest/authority, but I couldnt tell you whats happening in Chester.

Some parts of Cheshire are not as desirable as parts of South Yorkshire and vice versa.

Yes agree completely with this. The area in question was a small village on the cheshire/derbyshire border, not that far away from Stockport;) . There are certainly more desirable areas in my part of S. Yorks than there was in *this part* of Cheshire.

To answer your other question, the mines, power stations, factories were closed prior to me buying this house. Since I've bought there has been more business come to the area including a new airport. (which gives you a better idea of where I am;) )

tim_n

hi, ftb finally got himself together to try and bag himself an after xmas bargain. It seems fairly likely that I can raise 4.5x my salary without getting burnt (I tend to live a brown bread diet and don't like champers) and ride it out if there is a crash.

But I still look at the theoretical money in my hand, and ask myself:

Is this one bedroom (2nd bedroom is a study), electrically heated with property & ground maintenance cost worth my £130k

Or should I wait and save?

I've been waiting for two years. Finally got a worthwhile job which I'll probably be fired from for sitting on MSE and have a deposit. I can't stand living cheaply at home, but don't want the hassle of going through renting (though it'd be easier than living at home right now).

Ho-hum. I suspect I'm going to be in until the summer. But I've got a bad feeling about buying right now and I had it yesterday during my viewing. I can't financially base this on anything and I know that really, this is a very difficult trent to predict. No one knows the answer and lots of people have got it very wrong before me. Do I want to be one of these people? I'm trying to weigh it up.

Brick and mortar wise, my flat is probably worth about £10k. Let's be generous and say £20k. Is the land of this tiny little flat worth £110k?

I can buy several acres of greenbelt land for £110k... I know I can't build on it...

I think my flat is actually worth, to me, about £90k. I can see the prices dropping to £90k if there is a bust. I can't predict it, neither can I do anything about it if I go into £40k negative equity. I can't see myself living there in five years time and the transfer of negative equity isn't going to happen.

A lot of first time buyers are out of the market now and buy to let is slowing. There is nothing else following and I don't think it is sustainable. It may plateau but either prices go down or wages go up.

I think I'm going to wait :- (

beanieandme

No one can tell you what to do as you know, and it sounds like you've got your head screwed on... Go with your gut feeling, but if all goes t*ts up, at least you know you looked into it well before leaping/stagnating. Try and hold on to your job instead of posting biggies on here, lol. Tell us a bit more about the property. I like your terminology "study", mine's a "nursery" .

cordial

Alan_M wrote:

Who and how could anyone provide "Inside Information" on something like the housing market? Short of approaching Mystic Meg I can't think of anyone, well maybe Mervyn King, Gov of the BoE, who openly states the market is overvalued and only getting more overvalued.

Absolutely agree. So, as previously mentioned, what is the use of such threads beyond the venting of totally speculative opinion?

When stripped of all the guesswork and froth, all of these posts amount to a choice of two:

1. I think the housing market will crash.
2. I think the housing market won't crash.

You read more into them if you want but that is entirely your risk. I see no point in adding further to what is already a futile exercise. End of interest.