'We've reached a tipping point' Signs of house price weakness

ukcarper

Mummy100 wrote: »

It also reflects what I see here. I am not in a difficult situation as some are and tbh price rises benefit me and the like I suppose but I would prefer a crash as it would make things fairer.

I can't see why anybody would welcome a crash as it would cause a lot more problems than it would solve. I agree it would be better if prices were not as high as they are in the south east but in my opinion the best thing would be for prices to stagnate or maybe fall slightly.

Crashy_Time

MobileSaver wrote: »

Nope, makes no difference to me whether the price goes up, down or sideways. It's my home, not an investment, why would I care?

I'm just enjoying my home secure in the knowledge that it's mine and I've no monthly outgoing to keep it that way.

Why indeed, why chase down the "HPC Crowd" wherever you find them on the internet? :j You should be in some sort of Homeowners Nirvana by now surely?


You have confusion about prices and volumes. Credit availability fell off a cliff, prices dipped (but not enough) and volumes fell because no one could borrow enough to buy at prices inflated by previous credit availability (which many "owners" need to break even). Emergency measures prevented forced sales until the banks could repair their balance sheets a bit.


Price is a function of availability of credit and sentiment, Volumes are an outcome of price and ability/desire to pay that price. It is all underpinned by availability of credit, and that is why this monster bubble must pop.

Crashy_Time

ukcarper wrote: »

I can't see why anybody would welcome a crash as it would cause a lot more problems than it would solve. I agree it would be better if prices were not as high as they are in the south east but in my opinion the best thing would be for prices to stagnate or maybe fall slightly.

Can you list some of the problems?

ukcarper

Crashy_Time wrote: »

Can you list some of the problems?

You mentioned one yourself the amount of property for sale falls dramatically.

Mummy100

It would cause problems for those who bought at the peak but thats life. It would scupper amateur landlords which is good. I am convinced prices will fall as they have only stayed elevated via ridiculous interest rates and silly schemes. I listened to a radio discussion recently where they discussed the fact that for the first time in years prices falling would not necessarily be an election loser. It doesn't matter how low rates are if you can't afford the repayments and don't pass the stress tests. A sharp decline is required.

Crashy_Time

ukcarper wrote: »

You mentioned one yourself the amount of property for sale falls dramatically.

That only happened recently because there was massive intervention from the PTB to keep prices up, and people believed that they could hold out for "what it`s worth", or "take it off the market until things are better"? It would probably be more accurate however to say that the amount of property that actually sold fell dramatically? Behaviour will change when prices drop this time around, because there isn`t much more the PTB can do, and investors will be more clued into this than Joe Public probably, meaning it will be a BTL/Prime/Foreign owner sell off that starts the crash?

ukcarper

Mummy100 wrote: »

It would cause problems for those who bought at the peak but thats life. It would scupper amateur landlords which is good. I am convinced prices will fall as they have only stayed elevated via ridiculous interest rates and silly schemes. I listened to a radio discussion recently where they discussed the fact that for the first time in years prices falling would not necessarily be an election loser. It doesn't matter how low rates are if you can't afford the repayments and don't pass the stress tests. A sharp decline is required.

The banks would be reluctant to lend in a falling market and getting mortgages would be difficult. The main reason for interest rates being low is not to support house prices. Although base rate is 0.5% compared to 4% in 2004 the average svr mortgage is 4% compared to 5.75% in 2004.

ukcarper

Crashy_Time wrote: »

That only happened recently because there was massive intervention from the PTB to keep prices up, and people believed that they could hold out for "what it`s worth", or "take it off the market until things are better"? It would probably be more accurate however to say that the amount of property that actually sold fell dramatically? Behaviour will change when prices drop this time around, because there isn`t much more the PTB can do, and investors will be more clued into this than Joe Public probably, meaning it will be a BTL/Prime/Foreign owner sell off that starts the crash?

You seem to be under the impression that people would want to sell if prices fall while the opposite is true for many reasons. The falls you want would put plenty of people in negative equity or leave them with very little equity. The banks would be asking for bigger deposited which people would not have so they would stay put. Leaving just forced sales this is what happened in 2008 and is what would happen now.

Crashy_Time

ukcarper wrote: »

You seem to be under the impression that people would want to sell if prices fall while the opposite is true for many reasons. The falls you want would put plenty of people in negative equity or leave them with very little equity. The banks would be asking for bigger deposited which people would not have so they would stay put. Leaving just forced sales this is what happened in 2008 and is what would happen now.

You seem to be under the impression that everyone who owns property sits in it looking out at their little rose garden and thinking how nasty it must be to be a "renter". There is enough property, especially in London, that is speculative investment/tax dodge/BTL etc. that any sell off will crash the market before the average punter knows what is happening to them.

ukcarper

Crashy_Time wrote: »

You seem to be under the impression that everyone who owns property sits in it looking out at their little rose garden and thinking how nasty it must be to be a "renter". There is enough property, especially in London, that is speculative investment/tax dodge/BTL etc. that any sell off will crash the market before the average punter knows what is happening to them.

I don't think that at all but if you are in negative equity you are much better off staying put compared to realising your loss and trying to rent probably at a higher monthly payment.

Most investors are in it for the long term and would rather keep the property and benefit from the rent than sell at a loss.