'What'll happen to house prices in 2012?' poll

Sheepster

Two things not to forget about house prices.

First, anything less than a rise in property values, at the same rate as inflation, is as good as a fall in values.

Secondly, and this may go some way to putting in perspective some people's worries their house they have just bought will go down in value (and somehow, they think this means they are worse off), people must remember, that to be worse off after buying a house, the value must fall more than the cost of their monthly repayment mortgage, and more than they would be paying out for rented accommodation.

To put it another way, if someone said to you "We are glad we didn't buy that house, by waiting a year, the values have come down and we can now buy it for £1000 cheaper, look at how much money we've saved by renting this house for £500 a month for the last year" - well would you really take them seriously?

yeldarb

Sheepster wrote: »

First, anything less than a rise in property values, at the same rate as inflation, is as good as a fall in values.

Is that necessarily true if wages are not keeping pace with inflation?

If the value of something is 'as good as falling' then I should be able to afford more of it. My salary has remained the same for the past 3-4 years, no pay rises. 3.5 times my salary doesn't by me more house because inflation is 5%, it buys me the same amount of house if house prices remain the same.

Is my logic off?

williamro

Unless you sell your house and live in a tent or seriously downsize it is very hard to make money out of rises in house prices after the costs of moving. Because of house price inflation many people could not afford to buy the house they now live in if they bought it now.

yeldarb

williamro wrote: »

Unless you sell your house and live in a tent or seriously downsize it is very hard to make money out of rises in house prices after the costs of moving. Because of house price inflation many people could not afford to buy the house they now live in if they bought it now.

I've been keenly watching the housing market where I live. The majority of vendors are baby boomers - people born shortly after WWII that lived through the boom of the 60s and 70s, the affluence of the 80s and are now reaching retirement and want to downsize. They have seen the value of their homes rise by 10 or 20 times over.

They are the ones that are most reluctant to negotiate on price since any reduction is a direct hit in the money they would put in their pockets.

We're just starting to see a glut of 'Boomer homes' in the 3-400k range that just aren't selling - many have been on the market for at least 12 months. They've had it good their whole lives. Is the party over for the baby boomers?

williamro

Many boomers are asset rich but cash poor and it is their children who are most likely to benefit after their deaths if it has not all been paid in care home fees.

clouty

What might play into the picture is the number of defaults on rent due to housing and other benefit cuts, which may affect the buy to let market.

What's the average house price/annual income equation these days?

homelessskilledworker

torbrex wrote: »

It would have been a good option for the poll.

k. I don't care, I bought my house to live in.

Yep, many of us would love the luxury to think like that. But because of speculative buying and constant media property !!!!!! such as the Kirsty Allsopp show many can no longer afford to now buy.
And what has made it worse for many of us who only wanted homes to live in and were saving was that millions were borrowing risky money and even illegally borrowed money in the way of self cert which played a part in the banking crisis..

Today mortgages are difficult to get and deposits have to be big, along with the difficult economic circumstances.

Yes, it is great to now think of property as just being somewhere to live, pity we never thought on those lines a decade ago.

Many of us want a crash so we can at least have some hope og buying property

2010

homelessskilledworker wrote: »

Yep, many of us would love the luxury to think like that. But because of speculative buying and constant media property !!!!!! such as the Kirsty Allsopp show many can no longer afford to now buy.
And what has made it worse for many of us who only wanted homes to live in and were saving was that millions were borrowing risky money and even illegally borrowed money in the way of self cert which played a part in the banking crisis..

Today mortgages are difficult to get and deposits have to be big, along with the difficult economic circumstances.

Yes, it is great to now think of property as just being somewhere to live, pity we never thought on those lines a decade ago.

Many of us want a crash so we can at least have some hope og buying property

I have to agree with your sentiments.
The housing crisis really began in the 70`s when to get elected Mrs Thatcher sold off council houses at big discounts (up to 50%).
The money from the proceeds was never used to build more affordable housing.

The other major factor was when Labour came to power in 1997.
Gordon Brown taxed and ruined perfectly good and healthy pension schemes.
This in turn made people look for an alternative to a pension, hence a major boom in BTL.
People buying more than one property hoping that in the long term this would replace their decimated pensions.
The fact that banks, who Brown should have controlled, lent recklessly is another part of the equation.
I`m afraid sitting back and hoping for a big crash is a bit unrealistic.
The thing about all this and all the speculating and useless polls about what will happen to prices is

---

people will always need somewhere to live.
So no big housing crash.

The amount of empty properties up and down the country is yet another manipulation of the housing stock.

Fishcakes_2

homelessskilledworker wrote: »

Many of us want a crash so we can at least have some hope og buying property

Hey don't worry there will be a housing crash like never before seen coming up in the next 5 - 10 years, possibly sooner.
Mind you, when this economic storm hits it'll probably be putting food on your table which becomes the main priority before buying a house.