House price crash?

homer_j_3

I think Ricks comments are just his frustrations with the fact that the world is not the perfect world that we would all like it to be.

I feel for people who are unable to get on the ladder and I was lucky with my timing and the fact that up here in the NW we still have relatively cheap housing in some areas in comparison to the rest of the country.

kingkano

Alias_Omega wrote: »

Well for me, im aged 27, have a child on the way, partner is 21, unemployed with 1 child already, claiming benefits. I work full time in the raf, i earn £26,600 a year.

With this setup, the house i can buy would be about £130,000. This would buy me a ex council house around my area.

This shows me that even if i work my !!! of for 22 years in the raf, ill leave with a small pension, no house living in a council house.

I should just throw it all away, claim job seekers allowance and be in and out of work for the rest of my life, then at 65 claim that free state pension as the goverment has paid the NI contributions.

If i could move abroad with my skills, i would.

Blame that on the growing number of 'professional' couples / house sharers etc. Basically people who arent settling for a 1 income family, instead keeping 2 or more incomes coming in. This means you can no longer buy a house with just 1 persons income.

Although having spoken to plenty of older people (45 and arounds) it has been this way for a long time. Im not sure where people get the idea a massive perfect house should be affordable on 1 person's average income??

Melissa177

sikejsudjek wrote: »

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.

Hmmm, so all the BTLers sell up all at once... Where do the people living in the houses they were renting out go to? They have to live somewhere!

So, in your scenario, the supply of houses increases dramatically - but so does the demand!

That doesn't stack up.

Melissa177

davesgirl97 wrote: »

You have said exactly what our mortage broker said yesterday when I asked him and his partner this question, which I think it will do this, but it doesnt sort out the problem of it making homes affordable, I guess we need a goverment that will put wages up , but keep house prices the same or slighlty lower:D....all tho a crash would be disasterous for the economy, it can happen, it has happened before.... Thankyou Homer_j for your inpute, I appreciate it

But if wages go up, that pushes up inflation massively :cool:

Melissa177

Homer J says some very sensible things on this thread.


I think the only solutions to the housing problem is
- an increase in the supply of houses that are being built
- an movement of people out of the South East (this is definitely a South East problem)
- people being prepared to compromise their lifestyles to buy a house, like, ooh, every other generation has done. Most of my friends moaning about not being on the property ladder are out drinking, eating out, shopping, buying hi tech goods etc - all things I'm largely doing without so I can pay my mortgage and not get into debt. And I don't feel that I am "going without".

flutterby_lil

I agree with what Melissa said about lifestyles. When we were renting, i would often spend £100 a week on new clothes, now i clearly can't afford to. We live very comfortably in a 3 bed ex council house. Alright, i didn't want to live in an ex council house but its got me on the market. We paid £57k for it and ones on the street are now selling for £105 - £110. When we first moved my friend was taking the pi$$ about living in an ex council house, but they are all now bought on the street and very well kept, only 1 that is rented, and the area is good, not the best in the town but good. We have fantastic neighbours and a lovely house. I am working 12 hour days mon - fri to pay for my front garden converting into a drive and saving in an ISA for my wedding. I have a lovely partner (obviously if i'm saving for a wedding) and we have just bought a brand new car, hopefully comes thursday!! My point really is just to echo melissa's point about lifestyles. We changed to be able to afford a house, and work extra for all our luxuries.

Re the original q, i don't think there will be a crash, i comtemplated putting house on market about 6 months ago, renting and then buying a semi when it does crash but didnt do it cos in all honesty i dont think it will. However something has to happen.

nick1977

IMHO, many factors play a part, but the simple reality is that house prices will only start to fall if people cannot afford to pay for them! I know many FTB's are priced out of the market but the properties still sell.
I know that sounds like a bit of a general statement, but demand is still growing faster than supply, and probably will continue to for the forseeable future.
So unless interest rates rocket in a short space of time, I doubt you'll see any fall in house prices. There is obviously a rate that will cause the market to level out (could be nearly there already), and higher than that could cause a fall, but many "experts" believe inflation will drop later in the year, which in turn should mean interest rates fall again rather than rise.

Nick

Melissa177

Another factor is that there are more and more single people living alone, particularly in London where housing supply is the shortest. I know so many people who live alone (myself included, although my flat would probably suit a childless couple).

This trend massively affects house prices, compared to my parents generation who tended to date for a while, then buy a house when they got married.

Rick62

How can stupid speculators be stupid if they are making money?

The money that speculators have made over the last 10 years has not been the result of hard work or skill, but luck. This makes a mockery of working hard at a job or at most other businesses where the chances of making significant capital are, on average, slim.

I think Ricks comments are just his frustrations with the fact that the world is not the perfect world that we would all like it to be.

I don't expect the world to be perfect, but yes I am frustrated when I see the UK going from being a country to be envied to a country where the quality of life has become so poor and the once strong economy has been turned into a speculative bubble (not just property).

On property specifically, there is actually plenty of land and if the government had a planning approach that worked we could have more property, more importantly of a better quality and more affordable. All other European countries the average house size is increasing, while in the Uk the average is decreasing. Who here (who is not senile or stupid) really thinks it is progress that we expect our sons and daughters to live in the badly built, small, charaterless hutches currently being built?

Melissa177

Who here (who is not senile or stupid) really thinks it is progress that we expect our sons and daughters to live in the badly built, small, charaterless hutches currently being built?

Agree - but they are being built because housing in such short supply. The quality of housing is directly related to the huge demand and the short supply. Many developers are building rubbish houses on the cheap because they know they can sell them.