Daily Mail headlines house price crash

Caz6

IF house prices were to crash in the next few months, does that mean that all buyers who have bought a property in the last 3 years or so will be plunged into negative equity? Regardless of where they are in the country???

Ems*Honie

Thats very general Caz, it would depend if the house value dropped more than the equity you have in the house. Ie, If I have £30,000 equity in one house and it's value drops £35,000 then yes it would be negative equity of £5,000 however it the house value dropped £20,000 I would still have positive equity to the value of £10,00. It would vary house to house.

Generali

Caz6 wrote: »

IF house prices were to crash in the next few months, does that mean that all buyers who have bought a property in the last 3 years or so will be plunged into negative equity? Regardless of where they are in the country???

Not necessarily. Just as prices have risen unevenly, they would most likely fall in the same way.

If things pan out as I suspect they will, prime areas that have the least links to The City (e.g. the posher bits of Cheshire) will do best. 2 bed 'executive flats' in !!!!!! towns and suburbs will fall fastest and furthest.

If you want a 2 bed flat in the back end of Docklands or in Slough or something, wait a few (couple of?) years and they'll be giving them away.

benood

I think what is missed in these discussions which generally pit (smug) owners against (jealous) renters is that for most people under the age of about 50 (ie those with aspirations to bigger/better properties) a falling market is notionally a good thing, since it makes trading up easier. (Obviously negative equity is a risk/problem)

Even the over 50's could be pleased by a falling market as it would make things better for their children.

So given the above a HPC would be bad for most of us owners and renter alike because of the causal factors - recession, unemployment, inflation, world war.

Finally a question for those who want house prices to crash. Given a crash how will you know when to buy?

Generali

benood wrote: »

I think what is missed in these discussions which generally pit (smug) owners against (jealous) renters is that for most people under the age of about 50 (ie those with aspirations to bigger/better properties) a falling market is notionally a good thing, since it makes trading up easier. (Obviously negative equity is a risk/problem)

Even the over 50's could be pleased by a falling market as it would make things better for their children.

So given the above a HPC would be bad for most of us owners and renter alike because of the causal factors - recession, unemployment, inflation, world war.

Finally a question for those who want house prices to crash. Given a crash how will you know when to buy?

My opinion FWIW is that house price volitility, up or down, really doesn't help things economically.

Rapidly rising house prices is just inflation in another guise. Falling prices are a symptom of a credit crunch. Neither helps UK PLC.

betlarge

However, when odds compilers and spread betting firms start quoting a slide then I'm more interested, these people are very astute, that's why they are where they are and they very rarely get thing wrong.

Odds compilers and spread betting firms don't set the market, their clients do. This may not be any particular market sentiment rather than those with large property portfolios hedging against the potential for future falls.

Tahiti

mystic_trev wrote: »

As usual it’ll be those who can least afford it who will suffer the most.

Too true.


As for a house price crash, if it occured, it would affect different areas (and different types of property in those areas) in different ways. The main problem that I see for people is the debt culture in place these days. Even people who bought in the slump aren't necessarily in a great position - there's nothing to say they haven't remortgaged as the price has risen, leaving themselves open to negative equity.

A house is more than an investment to the majority of people - it's their home. Some people seem to forget this.