Will house prices crash? Poll Discussion

nickj_2

prices only keep rising because people are prepared to pay over the top for their house , the more people are prepared to pay , the more estate agents will hike the prices up , the more estate agents hike the prices , the more banks will find ways of allowing buyers to borrow money at higher levels compared to their earnings . when the time comes that ftb's can't or won't buy is the day when it will go pear shaped ,

montheton

I`m a potential first time buyer, with 2 kids, and only one salary coming in. a mortgage for the type of property i require to live comfortably in(3bed) would cost 2.5 times what i currently pay on rent. I earn a reasonable wage and get on average a 3% a year rise so i am completely baffled at how the prices can still rise. It`s ok saying that years ago someone paid £4000 for their house but now 20yrs on it`s worth £150,000, my parents done just that but at no point did their mortgage consume 75% of the total income, like it would for myself. For this reason aswell as others, prices have to drop and imo will be sooner than later

TGM

IMO, we're on the verge of sliding down a slippery slope. There's too much money slopping about, compared to goods getting bought. Result is interest rates rise to counteract inflation.

But here's the problem 1/2 percent to a first time buyer is more crippling than it was 20 odd years ago than under the Tories (sorry I don't mean to get political). This is because nowadays first time buyers are borrowing up and over TEN time their salary compared to about 3 times yesteryear. So you end up having to shell out more now than what you would have done then.

The up shot, I reckon we could go into first time buyer meltdown. And all the FTBers who think they own their own homes will get a nasty shock when they fail to make payments and the banks want their money back. They'll loose their homes, they'll go to their Councils to help them out with housing. And the Councils will say 'sorry we've no coucil house we've sold them all off'.

kjharve

People need to stop worrying about mortgage lenders "lending 5 x salary." The FSA has made lenders take affordability into consideration and this is now the main focus. The income multipliers are simply a guide for customers to estimate how much they might be able to borrow.

Remember, lending someone 5 x their salary could still mean a very affordable mortgage repayment if they have little other outgoings. Mortgages are more heavily regulated now than ever before.

lamp

I doubt the housing market will ever crash. Slowdown, maybe, but not crash.

a) banks have far too much money invested in housing, they would not allow their value to crash, housing is the new gold

b) if you can't afford to buy your house, there are plenty of those living abroad who will quite happily buy it instead

jdc_2

With an expected interest rate rise around the corner its surely only a matter of time before the market crashes.
Eventually it'll have to, average Jo is becoming more and more stretched and something will have to give. It happened before and it will happen again.

[Deleted User]

lamp wrote: »

I doubt the housing market will ever crash. Slowdown, maybe, but not crash.

a) banks have far too much money invested in housing, they would not allow their value to crash, housing is the new gold

b) if you can't afford to buy your house, there are plenty of those living abroad who will quite happily buy it instead

Banks don't have any money invested in housing, they brokered liability's, those liabilities are tied to individuals and investors. Housing breaks to dust, Gold remains as gold forever.

In the 1970s about 20% of housing was privately rented, now its 10% so its actually gone down a fair whack, not up like the press would have you believe.

Take a look at what happened in the early 90s and every time before that if you don't believe its impossible for a market to not grow exponentially forever.

before_hollywood

ftb houses aren't selling cos we either can't afford them or can see what a state they are for the money, trouble is anyone trying to sell one can't get rid of it and move up, no-one new entering the market is going to make things worse

lexandergundogs

Property prices - unless you have a serious redevelopment project, with consents already in place, then prices are falling. There really is just no question about it. 10% + drop if the interest rate hits 6% or above.

At best it's a stagnant market, at worst it is falling. Buyer beware.

If you are a lettings investor - there are absolute bargains to be had - just buy carefully.

valleymatt

I don't see how a lot of people will be able to get on the property ladder unless there is some sort of drop in prices, but I've been thinking that for several years now and they just seem to keep going up and up....

VM