House price crash news

littlesaint

PJD wrote: »

"Investing" in the current market, and buying yourself a home are different things though aren't they?

Yes there's a distinction. If Pinkshoes has bought her house to live in and plans to stay in her house for a number of years, then she'll be absolutely fine and is not a fool to buy. You would be a fool to buy now as an investment or have bought with no deposit, a interest only mortgage and plan to sell in two to three years.

The people see this as a long term thing will ride out any crash.

PJD

Romani_Ite_Domum wrote: »

Envy of what? I have a house.
Treating houses as an investment is ruining this country. Where I live people have been pilling in buying second homes by MEWing and BTL mortgages. Communities are being destroyed.

Envy indeed... get off yer cloud.

As Dead_Eye_Jones has rightly pointed out, - no-one really knows, but we can talk & discuss it (like we have been doing) as that's what discussion forums are for. To say point blank that there's not going to be a crash is a little silly & dare I say immature tbh.

nollag2006 you're coming accross very defensive

Dithering_Dad

sundancer101 wrote: »

One thing that seems to have been overlooked in this thread is the reason interest rates went to 15% in the past - it was the then governments attempts to keep us in the Exchange rate mechanism. Interest rates were the blunt instrument that the government tried to used to keep the UK within the rules of the ERM so hopefully that will never happen again in the future (of course when we get the Euro.........)!

I'm glad you posted that because I always get annoyed when people quote that particular rate and never say that it only lasted, what, a day or so? and it was because of political blundering and bruised egos.

Now that control of interest rates is with the BoE, there will be less chance of this happening. I'm not naive enough to think that the BoE is not influenced by government, but I seriously doubt they would follow a government policy that was so foolhardy.

mystic_trev

Dithering_Dad wrote: »

I think for a crash to occur, it takes more than just interest rate rises and house price inflation. If the economy takes a dive and people lose their jobs, that's when you'll see a crash. You'll find that no matter how much interest rates go and how desperate for money people get, they will always make their mortgage repayment their first priority and will find the cash from somewhere, even if this means defaulting on credit cards or loans.

Todays unemployment figs

http://news.bbc.co.uk/1/hi/business/6660917.stm

"According to the Office for National Statistics, the number of unemployed rose by 13,000 to 1.7 million in the three months between January and March"


Latest debt figures

http://www.creditaction.org.uk/debtstats.htm

"Total UK personal debt at the end of March 2007 stood at £1,318bn. The growth rate increased to 10.5% for the previous 12 months which equates to an increase of £116bn"

littlesaint

nollag2006 wrote: »

Well said pinkshoes !


I think there’s an element, in all these discussions, of envy from people who could have got in 5 years ago, but didn’t, as they were waiting for the oft predicted crash.

You’ll have a while yet to wait guys…

As I have said on so many posts, many of us could not buy five years ago either! At that time, I'd only just left uni, was being paid peanuts and struggling to pay my rent in London and pay off my overdraft. Now I'm debt free and have savings, but I'd rather enter the market with a decent deposit when I'm in a position to get a good mortgage - perhaps with my partner, rather than overstretch myself on one person's wages.

What annoys me is the people who assume that other people were in a position to buy a few years ago but were too busy buying ipods and cars and posh holidays (I wish) to "get off their !!!!". It's fine if you were ready, or you live in the north where houses are cheaper. But not everyone is in that situation.

I have friends with mortgages who would really be effed if prices crash, that's why I don't want one. I would like to see house price growth flatline for a while. That would be best for most people, but unfortunately the world is not like that.

Dithering_Dad

The trouble with just quoting statistics like that (Mystic_Trev) is that is doesn't really say anything. Just because 13,000 lost their jobs last month, doesn't suggest that they will all stay unemployed until they lose their houses. Most will either gain equivalent employment in a couple of months or will take lesser paid employement that they may struggle on.

The same with the debt statistics. Have a look on the DFW thread so see how many people there have huge credit card and loan debts but ALL ensure that their top priority is to make their mortgage repayments and secured loan repayments, even if it means defaulting on other loans.

Basically, just because people lose their jobs it doesn't automatically follow that they lose their houses. Just because people have debt doesn't mean they automatically lose their houses if they get into trouble...

abaxas

Can I just remind everyone that housing is a basic human need.

If we are allowed to speculate on human needs, why dont we just open our markets fully and have a true market economy.

£50 a loaf of bread anyone?

Romani_Ite_Domum

Dithering_Dad wrote: »

I think for a crash to occur, it takes more than just interest rate rises and house price inflation. If the economy takes a dive and people lose their jobs, that's when you'll see a crash. You'll find that no matter how much interest rates go and how desperate for money people get, they will always make their mortgage repayment their first priority and will find the cash from somewhere, even if this means defaulting on credit cards or loans.

I think that we'll see periods of stagnation (where individuals may reduce their property prices to gain quick sales if they're desperate to move, but the rest will simply be prepared to wait however long to sell their houses) punctuated by short periods of gains caused by interest rate dips or localised conditions such as a new tube/tram stop opening is a particular area.

DD you are right, IRs won't cause a crash on their own as they did in the 80s. Irs would have to make a 2% leap for that to happen.
A combination of higher IRs and credit tightening will cause the market to stall and unless it can get kicked back into life it will go into reverse.
As we have built an economy out of HPI, that economy will start to fail and this will loss of jobs and a recessionary spiral.

So my advice is keep paying more for houses. Pay 10% over the asking price if you can. Unless we suck more people into buying houses at over inflated prices… we are all doomed. :eek:

Dithering_Dad

abaxas wrote: »

Can I just remind everyone that housing is a basic human need.

If we are allowed to speculate on human needs, why dont we just open our markets fully and have a true market economy.

£50 a loaf of bread anyone?

True, housing is a basic need, but owning the housing isn't.

Generali

abaxas wrote: »

Can I just remind everyone that housing is a basic human need.

If we are allowed to speculate on human needs, why dont we just open our markets fully and have a true market economy.

£50 a loaf of bread anyone?

We have a free market in bread. Not sure what your point is.