How long before the inevitable nominal fall of 35% in houseprices

PalmerUK

House prices are just so ridiculous now, hows anyone starting off supposed to have a chance.

IveSeenTheLight

PalmerUK wrote: »

House prices are just so ridiculous now, hows anyone starting off supposed to have a chance.

Best to look at specific area's.
While there are some areas that appear to be extremely unnafordable to the average perso, there are other areas where they are affordable to the average person.

Additionally, the expensive areas must have sufficient demand that is able to afford.

StevieJ

paulmapp8306 wrote: »

How about the rates lenders are giving? That hasnt only got to do with BR now has it.

When BR was 5.75% youy could get new mortgages at around 1% above BR. Now - even with BR at 0.5% is difficult to get a mortgage much below 3.5% and more commonly 4%+. thats 3 to 3.5% above BR.

Fast forward to BR rises up to 3% - and mortgages are now at 6% to 6.5% which is a similar level to 2007. Difference is with other costs such as energy, fuel, food etc taking a much greater % of income - nand with wages falling in real terms, even that small(ish) raise will put a LOT of people in trouble.

It MAY be that banks reduce their lending back to 1% above BR - but I doubt it. Even if they did you'd need to re-mortgage to get those rates and mortgages are getting harder to find as it is. Banks dont want to lend.

Historical mortgage rates tended to be BR+around 2% and that is where I expect interest rates to be if BR hits 5.75%. BTW the Halifax standard MR was 7.75% when BR was 5.75%.

http://www.moneyextra.com/dictionary/interest-rate-history-003455.html

Jimmy_31

PalmerUK wrote: »

House prices are just so ridiculous now, hows anyone starting off supposed to have a chance.

The government want you to get lucky and find a job.

Then they want you to stay lucky and keep that job long term.

Then you have to decide to either live with your parents or pay ridiculous rent to a landlord whilst you save.

Then you have to save every penny you can for years on end to get your deposit together for the overpriced house.

Then you have to save all the fees associated with buying a house.

Then you have to save an emergency fund for when the bad luck comes.

Then you can buy your first house and hope friends and family can give you some of their old furniture to furnish your house.

You need the free furniture because you will have no spare money for anything because your wage will only cover the mortgage and bills.

Then the boiler breaks and you freeze to death because you cant afford to fix it.

Depending on the area you want to live in of course;)

paulmapp8306

IveSeenTheLight wrote: »

Your hopes for prices to be at the "bottom" in 2013 appears to be hinged on when you percieve to be debt free.

It's interesting that you believe you will have repaid £18k and build up a decent deposit such that you could buy for cash in only 18months time yet you also claim that property is unnafordable.

To clear £18k and build up say a £54k deposit / purchase for £54k then you must have approx £4k of spare income each month.

[edit]
Just read your post about a triple inheritance and forces pension
[/edit]

Yeh - the inheritance/pension is whats making it possible.

I didnt claim prices would "bottom" in 2013 just that they will havbe gone down. I also dont think they will crash - it will be a trickle down.

Im HOPING that they fall faster, as I cant buy now (not having the inheritances/pension yet and being in debt) but I will have to when I leave the forces (because I will no longer have a forces quarter - and no chance of social housing).

Im very luck in some way, to have had the sums comming in just when i most need them - however while that makes MY position better it doesnt alter the fact that for most of the piopulation property prices ARE too high. it also doesnt effect what I feel will happen.

ive seen prices slowly drift in the last 4 years (started looking when I was posted to Belfast - and kept looking as I got closer to my end date). The homes I was looking at in 2007 were £180k+. The same homes are now £120+. Thats not been a drastic crash, but a fairly steady drop. That drop has slowed - but its still dropping.

That rate has been around a 10% drop per year, and Im hoping another 18 month will giev another 10% or so drop. That would make the home I wanted, but could't afford 4 years ago now availably for around £110. Less if I can find a repo or someone needing a quick sale. i can afford that even on my stock pension and no job (tight but do-able) and could make £90k cash if something came up.

There are many places in the country - well more than half - that even with my big deposit, a job at a realistic salary and an army pension I couldnt afford the mortgage on without pushing the limits.

Mallotum_X

Jimmy_31 wrote: »

The government want you to get lucky and find a job.

Then they want you to stay lucky and keep that job long term.

Then you have to decide to either live with your parents or pay ridiculous rent to a landlord whilst you save.

Then you have to save every penny you can for years on end to get your deposit together for the overpriced house.

Then you have to save all the fees associated with buying a house.

Then you have to save an emergency fund for when the bad luck comes.

Then you can buy your first house and hope friends and family can give you some of their old furniture to furnish your house.

You need the free furniture because you will have no spare money for anything because your wage will only cover the mortgage and bills.

Then the boiler breaks and you freeze to death because you cant afford to fix it.

Depending on the area you want to live in of course;)

To be fair though, that description could apply to any post war decade. Nothing wrong with second hand furniture to start you off, I did it that way with a rented flat and first home, whilst house prices are bonkers, there is too much of an element of entitlement by many.

I'm mid 30's, rented a flat after Uni in the late 90s with cast off furniture and saved a 10% deposit. Bought a place in early 2002 and was skint at first, and continued with second hand stuff, took another 18 months really before i started to feel like I had some savings again and was able to get nicer stuff for my home.

High house prices, are only part of the problem, high expectations on living standards eat into cash.

IveSeenTheLight

Jimmy_31 wrote: »

Then you have to save every penny you can for years on end to get your deposit together for the overpriced house.

I thought you and your collegaues in the construction industry were in line to buy for cash (round your way).

How can it be overpriced in that scenario?

AliceJenkins

Never going to happen.

tisgood

IveSeenTheLight wrote: »

Best to look at specific area's.
While there are some areas that appear to be extremely unnafordable to the average perso, there are other areas where they are affordable to the average person.

Additionally, the expensive areas must have sufficient demand that is able to afford.

The houses may be affordable but that's because there are no jobs in the area.

IveSeenTheLight

tisgood wrote: »

The houses may be affordable but that's because there are no jobs in the area.

That's a naive assumption.
Not all areas that have affordable property suffer from vast unemployment.

An area may have unemployment, but with regards to house prices it's those in employment that are sustaining the house prices