House price crash?

davesgirl97

I dont have a cystal ball I know, but I keep reading, also hearing that in the not so distance future there will be a house price crash, I just heard a few mumberlings from friends whos friends work in the city have said its going to happen because of the prices right now and also the amount of DEBT people are in, what do you think, will there be a crash soon?

RainbowsInTheSpray

Just out of interest...

...I would like to know how much profit could have been made on e.g. a house costing £100,000 in 1997 and letting it out at the average net rental return for such a property and then selling now, after 10 years, at the average current going rate, net of CGT.

A lot of assumptions, I know, but I think we need a touch of encouragement on here as an antidote to all the dooandgloommongery, every bit of which has failed to materialise over the whole of the Blair government.

Anyone got the figures, by any chance?

Rick62

What doomandgloom? Doomandgloom is paying three times as much for a basic necessity, not being able to afford any sort of decent property and smart young people either leaving the country or not being able to afford to start a family.

Blair and Brown messed up this country, property unaffordable, pensions devastated, high taxes, high debts, huge national debt to which you can add PFI and unfunded civil service pensions.

I think a property crash would be very healthy, make it affordable again and maybe make people realise that a house should be somewhere to live, not a place where stupid speculators can make fortunes for doing nothing.

davesgirl97

I dont have the figures, but going from my area ( Surrey), because every area is different, a house that would have cost £100,000 in 1997, would now cost £350,00 plus dependent on condition size of garden, what kind of road etc, I just want to know because we are thinking of buying, but I am worried if we go and mortage on todays prices, what will 2008-210 prices be, will we be buying a property for £200k now, that will only be worth lets say £150 or less in 2 - 3 yrs time, kinda worries me, hence the question put on here.

davesgirl97

Rick62, I do agree with you, a house is a BASIC necessity, a "place to live", just like we need food and water and light and air to live, it should not be a profit making buisness

sikejsudjek

RainbowsInTheSpray wrote: »

Just out of interest...

...I would like to know how much profit could have been made on e.g. a house costing £100,000 in 1997 and letting it out at the average net rental return for such a property and then selling now, after 10 years, at the average current going rate, net of CGT.

A lot of assumptions, I know, but I think we need a touch of encouragement on here as an antidote to all the dooandgloommongery, every bit of which has failed to materialise over the whole of the Blair government.

Anyone got the figures, by any chance?

Its only failed to materialise because of the totally irresponsible behaviour of the Blair government in failing to control credit. As such all they have done is increase an asset bubble. The result is likely to be BANG !

Just answer how housing can continue to go up by 10 - 15% per year when incomes are going up by only 3%. Too many idiots have bought Buy To Lets at the top of the market - and when they realise they have bought into long term debt rather than asset accumulation they will all sell at once, causing the mother of all crashes.

Its classic bubble economics at work. The sheeple buy at the top and sell at the bottom. It happened in the 1980's and its happening again. This time the level of debt is much higher, meaning that interest rates don't have to go anywhere near as high as the 80's to cause massive problems. Remember all those dodgy self cert mortgages ? 10x incomes deals ? It can't carry on and it won't. The fundamentals of the market always win out in the long term. Remember the dot com crash !

hollyblue

davesgirl97 wrote: »

Rick62, I do agree with you, a house is a BASIC necessity, a "place to live", just like we need food and water and light and air to live, it should not be a profit making buisness

I'm not sure I understand why property should not be a profit making business. On the basis that if a house is a basic necessity, like food, water and air, why is it ok to make money from a grocery shop, restaurant, pub or take-away etc - why not make money from property?

I'm not being argumentative just cheeky!

Rick62

Personally I don't have a problem with it being a profit making business. What I do have a problem with is it being an item of speculation where idiots can make money while not providing any sort of decent service to clients.

Most business you have to work hard and provide a good service, then most times you might make a living. In property over the last 10 years anyone could just buy it, provide a terrible service (probably not bother with tax) or usually no service, and still get rich. Where is the merit in that?

RainbowsInTheSpray

I am left wing by nature but am certainly not mired in some dinosaur-marxist dogma of 'property is theft'.

I simply wanted to point out what a lot of the anti-Blair propagandists on here don't really want mentioned, which is that his legacy house market-wise, just like the situation generally with the economy after his ten years, is really not all that bad, embarrassingly for some...

davesgirl97

hollyblue wrote: »

I'm not sure I understand why property should not be a profit making business. On the basis that if a house is a basic necessity, like food, water and air, why is it ok to make money from a grocery shop, restaurant, pub or take-away etc - why not make money from property?

I'm not being argumentative just cheeky!

lol, yeah just a bit cheeky, well if a human did not have some kind of structure to shelter and protect themselves and their offspring from the mothers nature elements, um illness and at worst death would happen to those without a shelter, so NO I dont agree to your question "why not make money from property?" money being made to this degree as it stands at property value prices today is putting it out of reach to those on average wages in this country, so how is that right?, so therefore to make huge amounts of money from property is to me morally wrong, food being sold is still affordable, lets hope it doesnt go to the other extreme in the future and its made unafordable too, now that would scary:eek:.

But the facts are! there is a lack of affordable housing in the uk, also there is a huge huge lack of council housing in the uk, and I am angry that its been allowed to go this way, I have children, and I worry where they are going to live when they are adults, will they have to move hundreds of miles away from family to find somewhere to live, or even move out of this country?, I really hope something changes soon to be honest, it cant go on like it is.


Getting back to the question I asked, does anyone think there will be a house price crash in the very near future?

homer_j_3

whilst there is insufficient housing to meet demand - no. I think that it will level out or dip slightly but crash would be disasterous for the economy...