Take cover! The housing market is heading for a bloody and protracted crash!

ukcarper

Thrugelmir wrote: »

Lifestyle is a choice. Hence why I said sacrifice. Its possible to get by on relatively little.

I agree but the big change is that people now tend to rent either on their own or together before they buy whereas in the past people tended to stay with their parents and save.

crash123

ukcarper wrote: »

I know things are bad where you are but even where I am in the south east a couple with a joint income of £50k could buy a house with a 10% deposit and a 3.5x joint mortgage.

Whats the minimum wage? £6.70? That`s what a lot of people are earning.

ukcarper

crash123 wrote: »

Whats the minimum wage? £6.70? That`s what a lot of people are earning.

True and they would never have been able to buy that is why we need more social housing but I can't see that happening.

Bigdeflationfirst

J_i_m wrote: »

If the price of everything drops during a recession then why does energy prices, food prices and the cost of living continue to rise regardless?

You have to understand the difference between price and value.

The price will rise as more units of currency are typed into central banks accounts and added to the worlds supply then 'spent' all over the world. But value is falling in relation to the worlds supply of units of fiat currency.

Look at gold and silver going up around 20% every year for the past 11 or 12 years. And after a 12 year bull run monetary precious metals are looking like the best value investment out there at the moment compared with the rapidly expanding supply of units of fiat currency.

Emy1501

ukcarper wrote: »

But surely a fall in prices would mean they had less equity.

A 10% fall would allow some people who can’t get a big enough mortgage now to buy, but the main barrier to most people is the deposit and as that is unlikely to change all people can do is save.

As for your last point i think that is a good thing.

A 10% deposit gives lenders confidence to lend as they are more likely to get their money back if things go wrong for the borrower.

Deposits will only be 1 part of the jigsaw going forward now that the amount that can be borrowed is based on affordability rather than the old days of how much do you want and the broker finding a way to get that amount.

Cheaper prices would mean more people fitting in but on the other hand it causes problems for people trading up. Real terms falls will probably be the best outcome going forward if we start to see some decent wage inflation going forward.

Bigdeflationfirst

The min wage is around 6 quid but most most people earn a little more than that per hr. But the relationship between average house prices is historically showing property is overvalued right now.

Property always goes from over to undervalued and thenback again.

Some bulls on here try to say property will never be undervalu:rotfl:ed ever again.

ukcarper

Emy1501 wrote: »

A 10% deposit gives lenders confidence to lend as they are more likely to get their money back if things go wrong for the borrower.

Deposits will only be 1 part of the jigsaw going forward now that the amount that can be borrowed is based on affordability rather than the old days of how much do you want and the broker finding a way to get that amount.

Cheaper prices would mean more people fitting in but on the other hand it causes problems for people trading up. Real terms falls will probably be the best outcome going forward if we start to see some decent wage inflation going forward.

I agree stagnation with real term falls is the best compromise for existing owners and future buyers.

I’m not sure how hard 90% mortgages are to get there seems to be a lot of conflicting information.
But I think a 10% deposit is reasonable or maybe 95% in some cases, I believe in the past borrowers were made to take out insurance to cove the difference.

I still think that it is the high deposit not mortgages affordability that is preventing a lot of people buying but I can see why the banks are insisting on the high deposits.

DpchMd

Wow.

I just clicked on 'Find all threads started by Graham_Devon'.

Thousands of negative, depressing and miserable topics. Does this forum employ people (or bots?) to start debate? I find it hard to believe that someone would make 50,000 depressing posts without being paid for it in some way.

Back on topic, I think it's very likely that house prices will continue to fall in real-terms for the foreseeable future, but I wouldn't call it a crash.

It's a fairly uninteresting topic for me because unlike other types of investments, a home is a necessity. This means that we can choose to buy, knowing that prices might fall in the short-term, or rent. I'd still rather buy.

Thrugelmir

ukcarper wrote: »

but I can see why the banks are insisting on the high deposits.

The higher the LTV the greater the capital the lender has to hold. Around 6 times higher for a 90% mortgage to a 60% LTV. Hence the far higher interest rates charged.

So there has to be a balance in the amount lent in the form of mortgages.

Sibley

Wow.

I just clicked on 'Find all threads started by Graham_Devon'.

Thousands of negative, depressing and miserable topics. Does this forum employ people (or bots?) to start debate? I find it hard to believe that someone would make 50,000 depressing posts without being paid for it in some way

I was going to say the same thing.

Shut up Graham you miserable b####.
Just because you have a bad life dont try bringing everyone else down.