PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

House Price Crash within 2 years???????

Options
My boyfriend believes that house prices are going to crash dramatically in the next two years, so much so that the flat I purchased two years ago for £116,000 will only be worth half that in a few years' time. He says he wants to wait for two years before he buys somewhere because prices will be cheaper then.
Please can you tell me that this is just total rubbish and the logic is bizarre???????? Surely even if the value of my flat did go down that much I could just hold fire before selling it for the value to go up again ?????? Please help. Thanks x :confused:
«13456710

Comments

  • lypsey
    lypsey Posts: 201 Forumite
    He is probably right about a crash , however if you don't intend to move then negative equity is not a problem
    Good luck
  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276 Forumite
    10,000 Posts Combo Breaker
    anggriff1 wrote:
    Please can you tell me that this is just total rubbish and the logic is bizarre????????

    Who knows :confused: Some people agree with him, others don't. The one thing we can't do is to predict what might happen. House prices usually fall when there are far more sellers than there are buyers and/or very many properties are placed on the market at the same time. Coupled with concerns over interest rates, which make mortgages more expensive.
    Surely even if the value of my flat did go down that much I could just hold fire before selling it for the value to go up again ?????? Please help. Thanks x :confused:

    You could do. Does it really matter what a property is worth if it's your home and you don't need to sell? :confused:

    Even if you were selling to move, the price of the next property on the ladder would almost certainly have fallen too.
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • lewt
    lewt Posts: 9,158 Forumite
    Part of the Furniture Combo Breaker
    i hope they do! fall that is so i can buy one
    If i upset you don't stress, never forget that god aint finished with me yet.
  • lisyloo
    lisyloo Posts: 30,077 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    however if you don't intend to move then negative equity is not a problem

    Not true.
    It doesn't matter about your intentions.
    It's whether you NEED to move that's the problem.

    You may be forced to move due to divorce, sickness, death of immediate family member, debt, forced job relocation etc.
    Does it really matter what a property is worth if it's your home and you don't need to sell?

    If you are contemplating buying then yes.
    You could save more than £50K in 2 years if he is right (big IF of course).
    If you already own it then there isn't a lot you can do (except sell).
    Some people have STRed (Sold to rent) and so far they have got it horribly wrong.
    Even if you were selling to move, the price of the next property on the ladder would almost certainly have fallen too.

    If you property is below the mortgage then you CANNOT move (unless you have a big wad of cash to put in).
    If you owe the bank £100K and your property is only worth £80K then you can't sell it unless you find the other £20K.
    Negative equity is a problem because it stops people from moving which is a big problem if you really NEED to.

    In answer to the original question I suspect he'e wrong simply because there is strong demand and it's all about supply and demand.
    However that's only my opinion.
    Surely even if the value of my flat did go down that much I could just hold fire before selling it for the value to go up again ??????

    You could yes, but having been through the last crash you could be waiting the best part on a decade, which might be a problem if you want to move area or start a family etc.

    But to be honest unless you are prepared to sell your house to go into rented accomodation on the abck of your boyfriends opinions then you are better off just staying put and trying to manage your finances well e.g. saving for a rainy day.
  • adr0ck
    adr0ck Posts: 2,374 Forumite
    Part of the Furniture Combo Breaker
    your boyfriend is probably right for the following reasons:

    population of UK is falling dramatically year on year

    number of new homes completed is rising sharpley year on year

    house sizes (number of people in each home) is increasing dramatically year on year

    more and more homes are coming onto the market year on year

    no one has a second home now so there all coming onto the market

    hope this helps
  • adr0ck wrote:
    your boyfriend is probably right for the following reasons:

    population of UK is falling dramatically year on year

    number of new homes completed is rising sharpley year on year

    house sizes (number of people in each home) is increasing dramatically year on year

    more and more homes are coming onto the market year on year

    no one has a second home now so there all coming onto the market

    hope this helps

    Can you substantiate any of that?

    I very much doubt the population of the UK is falling, when so many people are complaining about mass immigration.
  • talksalot81
    talksalot81 Posts: 1,227 Forumite
    I believe we will see a crash. However I would not believe that prices will find themselves at 50% of the 2004 level.
    lypsey wrote:
    if you don't intend to move then negative equity is not a problem
    Good luck

    Dont forget your mortgage. Many people are on low rate fixed term deals. At the end of this, the rate will revert to svr (probably a rise of several percent). If you are in negative equity, you will basically be unable to renegotiate a mortgage deal.

    So if you have a need to renegotiate your mortgage (even if you dont intent to sell), then negative equity is indeed bad for you.
    2 + 2 = 4
    except for the general public when it can mean whatever they want it to.
  • MickKnipfler
    MickKnipfler Posts: 1,983 Forumite
    Maybe though, we will get inflation too and interest rates will rise. Therefore, the monthly payment on a FTB motgage won't be any cheaper. However, you may only owe £75k instrad of £150k!
  • lisyloo
    lisyloo Posts: 30,077 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Can you substantiate any of that?

    I very much doubt the population of the UK is falling, when so many people are complaining about mass immigration.

    I could be wrong but I would guess that was all tongue in cheek.
  • sarkin
    sarkin Posts: 785 Forumite
    Here is a graph for property prices since 1974. AS you can see that we are at almost breaking point. http://www.housepricecrash.co.uk/graphs-average-house-price.php
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.9K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.9K Work, Benefits & Business
  • 598.8K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.