Will house prices crash? Poll Discussion

busabus

This is something I've been agonizing over again and again as I'm able to buy in but not sure I should. All your points smala01 are true, but many of them have been true for several years now and haven't had the logical impact expected. House prices seem to be more linked to emotion, and who knows where that's going to go...

I'd like a crash (50% asap!) so it was more affordable for me, but the economic backlash (ie jobs, cost of living) would be major. A slow correction would be preferable.

Oh and do something about stamp duty, it doesn't achieve the primary goal of capping house prices! But then it does generate over 4bn in tax, which would need to come from somewhere else, like my pay slip... eeek... man economics is complicated.

[Deleted User]

Prices are indeed influenced by sentiment, everybody thinks they make money then any other investment thus there is a bull run for the brick.

Reality is far from the imaginations of the population inspired by the TV programs touting that they will become millionaire property developers and land barons by wacking huge sums of money into the brick. The rarely do full investment appraisals leading them to have no idea of all the costs, taxes, regulations, work and general risks involved.

Truth is at current house prices most landlords either barely break even or actually lose money and worn out poorly decorated houses are only priced at the work required below a posh pad. Yields are break even or negative, compared to a good ISA yielding 6% or a good stock fund yielding 20%+.

If the general population ever dawned on the truth there would be a major price crash. As it stands its got to stop because the banks are now not loaning out any more wage multipliers-in fact theyll bring the multipliers down as people default on their negative equity homes, people arnt earning any more money, in fact they are earning less and less each year with inflation being astronomical.

SarahNeedle1872

I'll admit I don't know much about the housing market, but I can't see a crash in the next year, despite the rise in interest rates, because the demand seems to be outstripping the supply atm. I can see it happening a bit further down the line tho, as Yant has said, the banks are gonna have to stop lending money at 5x salary, as people are less and less able to afford the repayments. Repos must also be on the up!?! And how many people would be stuck in negative equity if they did crash? A bl00dy lot I expect.
Having said that, from a personal and purely selfish view, I would love the prices to crash.... I might be able to afford one then!

Sarah x

Terry_D

A crash is inevitable - the housing market can only survive while first time buyers are entering - once they can't afford it, the market will stagnate then prices will fall. We got caught out when we bought in 1990 and 3 years later our house was worth 80% of what we paid - we stayed put and now it's worth 250% of what we paid - CRAZY!! I really feel sorry for those wanting to buy these days. Thankfully we paid off our mortgage earlier this year so the worry isn't here any more.

LyndsayJ

I dare not speculate any more - have been unable to believe prices would keep rising for the last five years, yet they have!

Would help us greatly if prices fell - now stuck renting as no way we can afford a house in the South East with three children and only one of us working at the moment!

RichardJohn_2

It's actually quite worrying that people think they will rise. They're almost certainly going to drop - maybe not a huge crash, but I'd bet money on at least 10%.

PeterC_4

I think house prices will still rise mainly because demand still outstrips supply by quite a lot, but the increase will be less pronounced up to 5%. Also, there seem to be many vested interests in keeping the rise going. Certainly at the top end prices continue to rise, because the rich are still doing very well and the supply of high priced property doesn't seem to increase much. Property shares have fallen and may fall further, but higher interest rates and sentiment are the factors behind this.

[Deleted User]

You have mentioned supply vs demand but what about the other factors, affordability, bad debts, demand for a type of housing in a type of area. How many ghost towns do we have were demand fell to nothing a fair few, not in the SE mind but maybe everywhere else. Every body wants to drive a rolls royce but they cant afford it so demand isnt as high as demand is

Ok so we have doctors, lawyers, dentists, stock brokers and CEOs that get paid about 5 times plus what there worth. But the rest that are on normal salarys have taken up the infinite supply of credit offered by banks and the interest payments are likely to double at 8% or even higher just like not so long ago infact in the scheme of the economy and things. Do you think banks will still be offering all the sub-primes that are taking up idiot mortgages to feed the bottom rung of the house prices 6x multiplier mortgages and 125% LTVs in one years time? Maybe 8x and 200% LTV over 80 years perhaps, or maybe 8 generation mortgages for your kids, kids, kids... to pay off for you.

It can only go up? 10% rise every year is compounded its more and more money, few years ago the estate agents got there kicks by raising everything 2K now there getting off on raising it 20k a year. Have wages gone up 20K this year on average? After tax? After the cost of living increases? Did you put 20K in your piggy bank this year?

Its as safe as houses mate, I tell you what you want to get in to is that buy to let business make you minted mate. Eh, you watch sarah beeny on the TV last night, what a fox, well its inspired me im gonna sell my london flat and buy two duffers in newcastle make me a millionaire. Roll-over this weekend 77million better get myself a lottery ticket, wont be in work on monday im sure to win.

Perception isnt truth.

anticlaus105

I went for no real change given that the poll is about "house" prices. I think 2 bed BTL fodder "luxury" apartments are on the verge of tanking tho.

jasonj

Prices will crash. The lower end of the market is hyperinflated by the new buy to let brigade - some of whom I know can bearly afford to keep thmselves together but dream of a fast buck - not long term investors.
Rents here in Dorset are half what you would pay per month if you brought, showing there it is not the supply that is a problem eg £800 to rent vs £1500 on a morgage. And rents are coming down!
A crash will ruin some people - the rents are not even covering their repayments.