House prices may fall by up to 25%

dktreesea

Around where we live, good properties, e.g a 3 bedroom semi detached house or cottage in a nice area with good schools, start at around £250k, which is still do-able for a couple each earning £35 to £40k per annum each, I would have thought. Sales haven't slowed much in Edinburgh because the population is growing and the amount of decent housing stock is limited anyway - very little available land to build on within the city limits, and what land there is tends to be released due to demolition of council housing, so the replacement stock will be mixed housing, i.e. only 50% to 75% of it available for private sale, if that.

But even if you can afford to buy, the considerations in a static or potentially falling market are different to in a rising market. Before, when buying, if the house may need to be repaired in the future, it didn't matter too much because you could always be fairly sure of recouping the costs later on when you sold the property. For example to cost of roof repairs in a traditional tenement.

Now though, I think more along the lines of "but what if property prices don't rise, just stand still for the next 5 to 10 years"? Unlikely? Well, that's what happened from the late 80s to a few years into the 1990s.Now, instead of thinking "£250K We can afford that," it's more like "250k, but what if we have to spend money on it, and will it still be worth £250k in five years time?

Then there's the pound. While it may not be depreciating against other currencies much, in terms of what it can buy, it's falling through the floor. The soaring price of petrol comes to mind. And salaries and wages aren't exactly growing to keep place with inflation. So right now we might have enough to pay off the mortgage, but as time goes on and the price of everything else goes up, our ability to service the mortgage will decrease over time, if costs of essentials rise at a rate that outstrips the rise, if any, of our paypackets. Again this is a completely different personal future forecast to one we may have been able to make in boom times, i.e. that over time, our salaries/wages will increase faster than our mortgage payments, so paying the mortgage gets easier.

Even if it all evens out after 10 or 20 years, and the average increase of houses continues to rise steadily, as trend forecasting shows at the moment, we would still have to survive the stagnation period, to avoid selling at a loss.

My feeling is, in spite of the rise in population, the numbers of properties sold will stay low, because buyers who can still afford to buy will step back a bit and just wait and see.

chucky

ess0two wrote: »

God loves a trier.

i'd love Brit to explain to us how different these new threads that he starts are any different to the ones he started in Jan 2009, Feb 2009, Mar 2009.......... Dec 2009, Jan 2010........ Jul 2010, Aug 2010.... and April 2011... none of them have happened

you're right though he does try hard....

Swans1912

The problem with these debates (after reading lots of them) is there seems to be people begging for the housing market to crash further - either for twisted reasons or because it suits them.

The market is difficult to judge but you can't take away the fact the people want to own their own home in a nice area etc. Interest rate are keeping the cost of mortgages down BUT you have to assume the average logical person is using this time to get their money in order ready for when interests rates increase?

2011 is going to be an interesting year... 2012 will be even more interesting.

My guess (and thats all it is!):

- HM will remain +/- 5% for the next 18 months
- Interest rates will increase slowly to minimise impact on bowers

If house prices did drop by 25% I would half expect them to get bought up in bulk by big corporate rental companies - over 15+ years the return would be rather nice!

neas

Brits signature is distressing to me. Refusing to buy until sellers sell realistically...

And what years go by and you put your life on hold for what? I wonder could you buy if prices stayed the same for 5 years?

From the steadying of prices it looks like 50% falls are a long way away.

Cleaver

neas wrote: »

Brits signature is distressing to me. Refusing to buy until sellers sell realistically...

Don't let it concern you, I think it's quite apparent for all to see that Brit has no real interest in buying a house.

ess0two

neas wrote: »

Brits signature is distressing to me. Refusing to buy until sellers sell realistically...

And what years go by and you put your life on hold for what? I wonder could you buy if prices stayed the same for 5 years?

From the steadying of prices it looks like 50% falls are a long way away.

At 50% falls many will walk away,doubt it'd be beneficial to the economy either.

FTBFun

Cleaver wrote: »

Don't let it concern you, I think it's quite apparent for all to see that Brit has no real interest in buying a house.

I believe he can actually afford to buy a property where he wants - he has a bigger deposit than I did for instance and intends to buy in a cheaper area than I did.

Unfortunately he appears to have some random number in his head as to how much he should spend on a certain type of property rather than what the market has determined - hence the "buyers strike" nonsense.

Pete111

I mentioned before that I personally have a 'unrealistically priced Unicorn buying strike' currently in force.

I believe it has approximately the same impact on the wider world as Brits embargo.

Cleaver

FTBFun wrote: »

I believe he can actually afford to buy a property where he wants - he has a bigger deposit than I did for instance and intends to buy in a cheaper area than I did.

Unfortunately he appears to have some random number in his head as to how much he should spend on a certain type of property rather than what the market has determined - hence the "buyers strike" nonsense.

Honestly, I'm pretty sure that it has never crossed Brit's mind to ever buy a property. There's a few posters on here (Sibley, Brit, !!!!!S, doire, B Blank, amongst a couple of others) who don't currently own a house and probably never will own a house as they are too busy debating the pros and cons of it on an internet forum.

Loopgames

TheCollectorsCoach wrote: »

What is the return so far this year on silver?

It's gone up from around £20 to £28 per ounce. The last quarter was from £17 to £28 per ounce. There was a bit of a dip end of january.

According to my calcs - increase from last year was over 100% not 80% - it depends when one bought last year.