What would happen if there was a crash?

Mallotum_X

wolfplayer wrote: »

True, but there are also many who are spending.

Market prices move at the margin, on prices.

Your parents might have paid it off and have no intention of moving or selling, but you don't know if the older guy next door or across the road looks to sell, finds no buyers at high price, and then cuts and cuts his price, accepting a low offer. Guess what, the lower price paid brings down values for other owners of houses on the road. That is how markets work.

The lower value of course only applies for those that decide to sell at that rate.

Others sit it out with seemingly wishful asking prices until the market picks up/demand increases. Its an easy spin in a positive market that the low ball price was due to that old bloke in the run down house.

Then the next price is higher again and the market shows the jump.

This has been happening in many of the south east areas close to london.

lisyloo

But you have to be really, really rich to avoid that when you're old, when care costs run into tens of thousands per year

No you don't.
The vast majority don't last 3 years in a care home before they die.
£20K * 3 is £60K.
Lots of pensioners have a house worth much more than that, so you don't have to be filthy rich.

The majority these days get care in their own home. You can get people to bathe you, take care of toileting needs, dressing and cooking/feeding, so it's only when you become totally incapable these days that you actually have to go into a home.

You might be overlooking that many people won't need their home when they do into full time care.

I really don't see how giving £10k-20k to a son/daughter for a deposit is really going to change that reality

There are plenty of people who only have that sort of amount (outside of the home they live in). The average pension pot is between £30K and £40K so giving that amount away is a big deal if you've got 10-30 years to go.
Of course circumstances vary.

My own opinion is that young people should stand on their own two feet.
It's not easy but here's some news for you - it never has been.

wolfplayer

Mallotum_X wrote: »

The lower value of course only applies for those that decide to sell at that rate.

Others sit it out with seemingly wishful asking prices until the market picks up/demand increases. Its an easy spin in a positive market that the low ball price was due to that old bloke in the run down house.

Then the next price is higher again and the market shows the jump.

This has been happening in many of the south east areas close to london.

I understand what you mean, and that holds with stimulated markets, but not when markets really turn.

Not when it becomes a trend. When more owners discover no more QE, that interest rates going up, that very few buyers in the market, and BOE suggested today that buyer demand falls away hard. When very few buyers in the market willing to prop it up with big mortgages.

Demand for mortgage lending at 2008 lows - BoE
January 6, 2015

The survey of UK banks and building societies showed demand fell dramatically in the final quarter of last year, despite expectations among lenders of a rise, reaching its lowest level on the survey's scale since the third quarter of 2008, at the height of the credit crunch.

http://www.ft.com/fastft/257032/demand-mortgage-lending-2008-lows-boe

Then all house prices can also fall hard, in a prime area, on very few monthly transactions.

And the values fall for all owners, not just the ones selling at lower prices. It happened just a few years ago. Very few month-on-month transactions, but guess what, those houses selling for lower prices brought down the value of houses for all other owners.

Crashy_Time

Southend1 wrote: »

This thread should be in the debate house prices board

Why, doesn`t it apply to buying and selling houses?

Southend1

Crashy_Time wrote: »

Why, doesn`t it apply to buying and selling houses?

This board has a practical focus. There is a separate board for debating house prices, which is where this thread belongs. The forum works better for everyone if people post in the most appropriate place for the topic.

Crashy_Time

Southend1 wrote: »

This board has a practical focus. There is a separate board for debating house prices, which is where this thread belongs. The forum works better for everyone if people post in the most appropriate place for the topic.

Discussion about what happens in a crash does have a practical focus IMO, it affects people buying and selling houses, and that is the biggest financial decision most people will make in their lifetime.

Southend1

Crashy_Time wrote: »

Discussion about what happens in a crash does have a practical focus IMO, it affects people buying and selling houses, and that is the biggest financial decision most people will make in their lifetime.

There is a certain logic in what you say however there is a separate board specifically for the subject, which was created to move this kind of discussion thread into a separate area. I expect this one will be moved there eventually anyway but it just creates work for the mods.

Crashy_Time

Southend1 wrote: »

There is a certain logic in what you say however there is a separate board specifically for the subject, which was created to move this kind of discussion thread into a separate area. I expect this one will be moved there eventually anyway but it just creates work for the mods.

You would think something that would affect lots of buyers and sellers should be in a thread where it will potentially be read by lots of potential buyers and sellers? The other thread has tumbleweed blowing through it.

Old_Git

Richard_Webster wrote: »

People who bought new houses/flats "off-plan" and exchanged contracts long before they were ready find that when they apply for a mortgage the lenders won't lend the inflated prices the builders were asking.

then the builder takes them to court and wins .

http://www.belfasttelegraph.co.uk/news/local-national/how-the-bubble-burst-on-ormeau-bakery-luxury-apartments-28504344.html


http://news.bbc.co.uk/1/hi/northern_ireland/8452370.stm

nzseries1

Crashy_Time wrote: »

Discussion about what happens in a crash does have a practical focus IMO, it affects people buying and selling houses, and that is the biggest financial decision most people will make in their lifetime.

In a crash, I won't be able to pay my credit card bill. Should we therefore also post it in the credit cards section?
In a crash, I might get depressed, which would put strain on my relationship with my boyfriend. Should we therefore also post it in the Marriage, Relationships and Families board?

No, of course not. You should find the most appropriate place for the thread, and that place is the "debate house prices" board, as that is the main thing you are discussing.