House prices have fallen 20% in 5 years

DervProf

Interesting (as some posters regularly say).

Is this bad news ? Well, as a homeowner, it should mean that I am at least unhappy, or more likely feeling a lot less wealthy. Mmmmm, can't say I feel any different to how I did before my house lost some value. The big advantage is that I don't have to put up with monthly appearances on the new channels by representatives of mortgage lenders and estate agents, grinning like Cheshire cats, telling us how great it is that house prices have become even more expensive for future buyers and people wishing to "climb the ladder".

PS. The other advantage is that I am not expecting another financial crisis in the next year or two, apart from problems from the Eurozone.

moneyinmypocket

The HPC chain gang still have had to rent during the last 7 years not that I believe house prices are falling

DervProf

moneyinmypocket wrote: »

The HPC chain gang still have had to rent during the last 7 years not that I believe house prices are falling

No, house prices aren't falling :rotfl:.

Perhaps you shouldn't take so much notice of what Hamish says, and think for yourself.

NEO72

moneyinmypocket wrote: »

The HPC chain gang still have had to rent during the last 7 years not that I believe house prices are falling

Oh well if you don't believe it, they can't be then..

moneyinmypocket

The problem is people read a headline like 20% drop in 5 years and instanley think all houses are now 20% cheaper.

Also my other point was if your renting you have been leaking money also

We are all human and away from all the fighting we want what's best for are families and friends - a house is a home

asc99c

I bought in 2007. The drop in house prices has been pretty similar to the drop in my outstanding mortgage. And the drop in interest rates means I'm probably paying less than the rental cost.

I genuinely hope house prices drop another 20% over the next 5 years, then the next generation will be able to afford housing.

DervProf

asc99c wrote: »

I bought in 2007. The drop in house prices has been pretty similar to the drop in my outstanding mortgage. And the drop in interest rates means I'm probably paying less than the rental cost.

I genuinely hope house prices drop another 20% over the next 5 years, then the next generation will be able to afford housing.

A sensible and decent way of thinking, as opposed to wanting house prices to keep rising all of the time and arguing that it's good for the nation (when really it's just greed and self interest).

michaels

Ignoring the issue of how this 'real inflation' is defined, I think in this case where the property asset has an associated debt, the issue for many is the nominal value compared to the debt rather than the real one, especially with negative real interest rates.

Also as noted elsewhere the market is very regional - prices have fallen most in the areas that by most traditional measure s(rental yields, price/income ratio) are least overvalued and are unchanged or even increased in areas where they are least affordable...go figure.

The-Joker wrote: »

The price has dropped around 20%, but only the uneducated do not understand the difference between price and value. The value has fallen around 30% if you go by the official RPI and most experts agree real inflation is more than the RPI.

antrobus

HAMISH_MCTAVISH wrote: »

Of course it's not true.

As far as I can see the 'average house price' as per the Halifax index peaked at £199,612 in August 2007 and was at £161,094 in July 2012 and that means that the average house is indeed worth £38,518 less than it once was and that this is equivalent to a 19.2% declined over that period.

Now of course, you might not like the Halifax index. You might well even think that it's wrong, and that the numbers don't accurately reflect the UK housing market, but that doesn't change the fact that their numbers are what they are.

Pete111

homelessskilledworker wrote: »

If anyone purchased property at any cost in order to just get on the ladder between 2005 and today(more so 2005 to 2007) it must be quite an unpleasant time for them now.
I have yet to hear and argument yet where buying property since 2005 in general has been a good investment(homemaking is another story before some kick off)

I'll give you one.

In May 2004 (ok, 7 months before 2005 granted) we bought a flat for 250k with a 205k mortgage. The mortgage interest on this cost us 800 p/m.

We moved out of the flat in 2007, rented it out and bought a house worth just under 480k. The rental yield on the flat was on average, £1300 per month - thus illustrating the 6k difference p/a between renting and buying.

We rented the flat out for 4 years (making a nice profit each year - helped even more by lower mortgage rates!) and then sold late last year for 340k. Due to it having previously been our PPR and lettings relief the entire 90k profit was untaxed.

At the same time we were taking advantage of plumetting interest rates on our house. What started in 2007 as a £1650 p/m mortgage was slashed to under 1k p/m in 2009 when we remortgaged at a rate hugely under that we took out in 2007.

By the start of this year due to ploughing all our spare cash and the cash from the flat sale into the paying off the mortgage on our house we are mortgage free. Our house was valued at 540k the other week (though I think the stamp duty point at 500k could still prove awkward were we to sell)

I can tell you right now that owning a decent sized family house outright when you have a baby on the way and you look at the storm clouds still gathering on the horizon is a decent place to be. The fact it appears to have at least retained its 2007 value is a bonus

Sure, we could have rented at a far greater cost and invested all our money in the markets etc back in 2004. But looking at what happened from 2007 onwards I'm really not sure we would be better off...