Will house prices crash? Poll Discussion

Gordon_the_Moron

A crash is probably going to happen but not inside the year I don't think.

Da Moron

TGM

kjharve wrote: »

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.

Mortgage lenders aren't here to do home buyers any favours. They're here to make money. They look at how much money they can screw out of you first, then decide how much cash to lend you secondly. All with a smile on their face making out they're doing you a favour.

[Deleted User]

The housing market seems to be a legal version of the pyramid scheme, the base just gets wider and wider as time progresses, its fed by estate agents that force up prices as much as they can and the banks that drive up the loaning quantitys to match. Eventually there occurs a credit crunch that or other reasons that prevent the base widening the position jumps the market back up the pyramid and it starts over again.

Its interesting to note back in 1992 the mortgage multipliers for joint was up to around 3 maybe as high as 3.5 times your joint salary. Now 5 times or more is possible. Interest rates back in 1992 went to as high as 18%APR for sub-prime mortgages.

wacko911

Yant1 wrote: »

The housing market seems to be a legal version of the pyramid scheme

Excellent point -it's also like a ponzi scheme/scam. Where is all the money coming from ?

frugalista_2

kjharve wrote: »

Mortgages are more heavily regulated now than ever before.

This is completely and utterly false.

There never used to be 100 - 125% mortgages, where you are in instant negative equity.

There never used to be interest-only mortgages with no repayment vehicle, where you aren't actually paying off the house but merely renting money from the bank.

There never used to be self-certified mortgages where the bank has no idea what your income is.

There never used to be a whole industry of companies offering to produce fake payslips and P60s so you can fraudulently demonstrate a higher income.

There has been a lot of deregulation. In fact this deregulation is one of the main causes of the boom IMHO.

I am struggling to think of even one way in which mortgages regulations have been tightened in the last ten years.

frugalista

Former_MSE_Lawrence

Poll Started 17 July 2007.

Will the march of house prices continue? What will happen to UK house prices over the next year? Remember your view is as important as the property pundits'; public sentiment has a huge effect on prices.


A. Increase over 20% (boom) 1% (146 votes)

B. Increase 10-20% (small boom) 3% (326 votes)

C. Increase 5-10% 18% (1744 votes)

D. Increase 2-5% 26% (2501 votes)

E. No real change 15% (1466 votes)

F. Decrease 2-5% 10% (942 votes)

G. Decrease 5-10% 7% (700 votes)

H. Decrease 10-20% (smaller crash) 6% (614 votes)

I. Decrease over 20% (crash) 7% (715 votes)

J. I really have no idea 7% (657 votes)



Total Votes: 9788

Thanks to everybody that voted

MSE_Martin

SUMMARY OF RESULTS


You predict house prices will DROP by 0.6% over the next year.


Almost 10,000 of you voted last week to predict what’ll happen to house prices over the next year. It’s particularly interesting because public sentiment has real impact here. While more people thought it’d rise than fall, the average result was a drop of 0.6%, as many of those who thought it would drop predicted a big fall; in fact 13% predicted a crash (a drop of 10% plus).


Martin



Note: When calculating the average we take the increase or decrease of more than 20% to be equivalent to predicting a rise or fall of 25% (as over 20% could mean 30 or 40 or 50). This has been consistently worked out this way every time the poll is run. If it was calcualted by assuming it was just a vote for 20% - the average result would be a drop of 0.3%

Iwantmorecash

I work for a bank and they think that prices are going to sopt going up as the bank i work for has tightened it lending criteria, and you must now have at least 10% deposit to even look at a mortgage....
this must say something

P.S.
i hope proices dont drop to much as we realy stugled to buy our house 18 months ago and would hate to lose it

bigmac17

I think the current spate of floods will have a dramatic impact on the housing market, especially in the South and Midlands.

If potential buyers cannot insure a property then a mortgage cannot be raised. If a mortgage cannot be raised then potential buyers will have to look elsewhere. Thus, in the local vicinity then there will be fewer properties on offer.

This will mean that house prices, in flood plains, that cannot be insured will dramatically fall. Whereas house prices on the edge of flood plains that can still be insured will rocket.

The housing market will be an interesting place in a years time.

KILOCHARLIE

As per alot of things said in this thread, people have been saying house prices will crash for many years now and its boomed relentlessly.

Yes there are raising interest rates but there is also a very high demand for houses as the supply isn't there. Even if house prices slipped a few per cent, there's an army of buyers who could then afford it and prices would remain level.

In my opinion, prices will still rise but nowhere near they have done in the last few years. Prices will not drop but over the next few years will level out.