What Crash ?

Gorgeous_George

If or when the crash occurs, it is true that people will be reluctant to sell at a loss (thereby realising their negative equity). However, people die. This releases properties - often at the high end of the market.

In a recession, rents are likely to fall and benficiaries of the estates will sell at whatever price they can achieve. The people who buy will sell their properties and the chain resumes. However, it is likely that their will be less movement in the market though but this will not be sufficient to prop up houe prices.

For the FTBers waiting for the crash be warned. Calling the dip in the market will be as difficult as calling the peak. For years people have been saying the market is ridiculous. The best time to buy purely from a finacial viewpoint is just before IRs fall. Once they have fallen, the market recovery begins and the waiting game starts again.

For owners who are close to being broke each month I would suggest a 5-year fix (or even 10) if your house will meet your needs for 5/10 years. If you need to move I would do it sooner rather than later and get that fix.

For owners who are more comfortable, be careful. that plasma telly or new car may seem to be a necessity and easily affordable. Rising IRs will tighten your wallets.

IF a crash occurs, prices will collapse by 30 - 40% over one or two years with further falls likely for as long as it takes the market to recover. My guess is that year on year price rises across the UK will be 10 to 15 years away



GG

Pobby

Here he is again,the umbrella man!

dannyboycey

keeperbear wrote: »

The UK economy is currently growing at 3% per annum, and is expected to keep growing at 2.5% per year for the next few years. Where exactly is this recession you are talking about?

And HPI has been double digit! Can you not get your head around that?? It is UNSUSTAINABLE!

Pobby

Bruno,any chance you could post regarding the massive UPI(Umbrella price inflation.Since the late 1990s umbrellas have gone up in some places by 300%.Based on supply and demand many people are forced out of the umbrella market.Not so you however.You got in when umbrellas were affordable.

And as you know umbrellas(handles)always go up!

Gorgeous_George

In 1985, my first house cost £24,000. Allowing for inflation it should now be worth £52,184.87 (I used my armed forces pension calculator hence the decimal calculation ). Similar properties are currently marketed at £165,000.

This suggests that houses are either 3 times overpriced or were 66% underpriced in 1985. The truth is likely to fall somewhere between the two extremes.

A 50% crash would not be unreasonable over the long term. I think a huge crash is unlikely only because the Government/country could not cope. 20 - 30% is more likely IF it happens. As I have said before, I believe a 30% fall is much more likely than a 30% rise.

I don't often bet winning horses.



GG

spitfire.

wecanhelpu wrote: »

I hope she keeps posting though, so I can look at her avatar

She? Oh yes :-)

nicola1982_2

I think it depends on the area you live in - for example my parents recently had their house in a very good area of Nottingham valued out of interest. It was valued at exactly what they paid for it in 2003. This is a 2 bed, 2 bath large detached, which surprised me. It hasn't bothered them as this is their dream home and will stay with them, but for a 'property ladder' climer this would be a huge disappointment. Nottingham is a buyers market at the moment and therefore not seeing the HPI many of you are describing. I think the HPI will depend on how many new builds spring up in the area - we have loads of these 'doll's houses' popping up.

beingjdc

Well. Here's a fun graph. The red line is the real impact on a FTB of changes in interest rates over the quarter. The green line is the change in real house prices. Strikes me that green follows red pretty reliably, with about 6-12 months' lag. Starts in 1976.

adr0ck

is it true that the population of the uk is really 80 million not 60 million?

if true is this why house prices have been rising so steeply?

if theres going to be a crash (30 %) as people have been saying on this thread are all the extra 20 million people leaving?

Gorgeous_George

I think 80 million may be an exaggeration. 65 - 70 million is probably more accurate. Either way, the population will increase over the next 20 years and 80 miillion may not be so far-fetched.

Will Gordie's extra homes be enough?



GG