London property prices to fall 30%....

Garethgrew

Graham_Devon wrote: »

You mean "everyone man and his dog" will start playing a game of catching the falling knife?

Why now? Why have other crashes happened in the past and in other countries if this is the case? What is it different this time?

Nothing different this time, just as in everyother downward move in property the perma prop Bulls were screaming it will never happen.

Garethgrew

Mistermeaner wrote: »

Trouble is people won't sell at a loss, they just sit tight[/

Easy as that. I'm sure the banks will understand """please can we sit tight in our negative equity portfolio while we wait for prices to go back up to unreasonable levels they were before?"

lisyloo

Gareth - you certainly can if you can continue to pay the mortgage.

sebtomato

People forget that it's not just supply and demand, but also sentiment.

If prices start dropping, then nobody wants to buy anymore (in case they drop further). International investors/speculators would also leave to better markets. So yes, a large correction is possible.
Same applies to Buy to Let. I believe the returns in London are very poor (because property prices have increased much faster than rent), and many people also rely on property increases, as opposed to just rent/yield.

Ultimately, if the average salary in London can't buy a 1 bed flat, then there is a long term imbalance. Once the speculators are out, then the real people will make the market.

Hopefully, the BoE will raise interest rates, and this would cool down the market before it bursts.

zagubov

GDB2222 wrote: »

There was a big crash between 1988 and 1995. People who could sit tight did so, but there were forced sellers, eg deaths, redundancies and divorces. Of course, interest rates were much higher at that time, making it harder to sit tight than it would be currently and there was less support from the state.

We nearly bought in 89 but job changes made us pul out. A narrow escape for us. We tried again in 92 and it was much more affordable to get on the housing ladder, and for a better property too.

gadgetmind

We did our one and only upsize in late 1994. The vendors told us that they were still firmly of the opinion that it was worth £450k as that's what it had been valued at a few years previously. They accepted £320k.

We'd looked at loads of other properties where people said they were desperate to sell, but they clearly couldn't bring themselves to accept offers at the prevailing market rate.

It's happened before and it will happen again.

padington

Talking of sentiment, I was in Brighton yesterday and whilst getting some keys cut looked down to see a bunch of flyers by a landscape gardener and her dog advertising that they were desperately looking to rent a one bed flat for up to £750.

That's the current sentiment.

Osbornes new tax on rental properties has set a fire under the rental market.

shortchanged_2

Jeez the way some people go on here you'd never think there has been a drop in property prices before.

So people don't think the very low interest rates are helping to ramp up London prices then?

wotsthat

shortchanged wrote: »

So people don't think the very low interest rates are helping to ramp up London prices then?

I don't really see how something which has been a constant for years can lead to YoY rises each and every year.

Graham_Devon

wotsthat wrote: »

I don't really see how something which has been a constant for years can lead to YoY rises each and every year.

Don't you?

............. Really?

Look at low rates alongside every other demand side stimulus and it would seem to me to be relatively easy to figure out. Mortgage rates continued to get cheaper and cheaper for example over the years.