how many REALLY think there'll be a crash rather than a stabilisation ?

wecanhelpu

Guy_Montag wrote: »

You know you're in trouble when banks start wheeling out ever more exotic mortgages.

Correct. In some of my previous posts, I have talked of "bubble indicators" as

markers to what is happening in the housing market.

when prices are allowed to spiral out of control and become so expensive

that most people can't afford to buy, these fancy schemes are wheeled out

to entice as many more people into the bubble as possible.


Schemes such as shared ownership, IO mortgages, 125% mortgages, 50

year motgages etc etc all screaming "HOUSE PRICES ONLY GO UP - GET IN

QUICK BEFORE YOU MISS THE BOAT" etc etc

It is the last roll of the dice.

There is nothing new in this. Exactly the same happened during the last

boom.

And we all know what happened next.

Don't we?

thesaint

wecanhelpu wrote: »

And we all know what happened next.

Don't we?

Yep, house prices are at their highest ever.:j

(Or did you mean they crashed )

dannyboycey

Bestthingsinlifearefree wrote: »

Those guys on that site are totally bonkers...No one takes then seriously but it's a good site for a laugh.

Incorrect. There are some very clever people on there actually - the forum is often quoted in reports by BBC / Channel 4 news. And the BBC's Evan Davis appears to take it VERY seriously.

shelovestobuystuff

I am certain it will level out nicely within the next 12 months.
Well it has to.Can,t keep going at this rate.My area has the highest increase in property prices and the largest volume of new builds in scotland this year and last.Housing associations are building at a good rate too so no shortage of rented now either.
Bought my house for just over 50k 6 years ago and its worth nearly 200k now.So because we bought at the right time we live in a house which we could never afford to buy now.

benood

Now that housing is the government's top priority I suppose a crash is inevitable.;)

saunaboy

"shelovestobuystuff"

in that name lies the explanation why the UK economy is shafted:p

shelovestobuystuff

My full name is shelovestobuystuffbutonlywhensheneedstoandnevereveratfullprice,but thats just too difficult to read.:p

dannyboycey

Can people not get their heads around the fact that if house price inflation rises faster than wages, there comes a point at which houses become unnafordable!??

If we had HPI of 10% a year, the average cost of a house in the UK would be over a million pounds within 20 years. Does anyone really believe that will happen!!??

Gorgeous_George

Who defines what a crash is? Is it 10%, 20% or 50%? If it's 50%, is it 50% of todays asking price or selling price?

I think interest rates are currently at a level that is sustainable. If they remain the same or thereabouts, a correction of 20% may be expected. If IRs rise to nearer 7% and remain at that level for more than a year, a crash of 30-40% would be likely. If Gordie frees up more land for proper housing and IRs rise, the crash could be much greater and nearer 50%.

If IRs fall again and remain low (4-5%), prices could stabilise at current levels. Whatever happens, surely prices cannot increase much further.



GG

ollyshaw

Is a levelling off really possible? Will investors stick with an asset that is making less than leaving the cash in the bank? If these investors all sell up, wont prices drop?

Price drops are already happening in the North East and North West.

http://www.landreg.gov.uk/assets/library/documents/hpir0607.pdf

I can't see anything other than wages rising steeply or house prices crashing.

Olly