**Don't Buy A House** House Prices Set To Crash!!!

whoever

Most of those indicate a 2% price drop in 2005.
On a 200K house thats 4K. So in the overal sum of things thats negligable. The only reason the house market seems to be stalling at the moment is because all the first time buyers out there are waiting for 6 months or so to see if the house market does crash. At £500/month rent (I bet most people pay more than that) thats £3k you'll end up spending, so you'll save £1K.
If I was a first time buyer I'd buy now because there is a lot of choice out there and less competition. Take your time and buy the right house now, rather than rush into it as soon as house prices start going back up again in the spring.

Reaper

I'd agree. First time buyers are currently holding out waiting to see which way the market will go.

This has meant that rental rates are rising which will reassure the BTL market.

Interest rates have peaked as I predicted long ago when everybody else was saying there were still a couple of rates rises left this year.

Furthermore the talk is now that the next movement in rates will be DOWN because if the dollar gets any weaker against the pound it will start to hurt the economy (lower interest rates = lower currency).

It would only take 1 interest rate drop to make the wait-and-see buyers give up waiting and buy.

I predicted a small 5% fall followed by a long period of stable prices. I now think even that was pessimistic.

manhattan

in my opinion, first time buyers WILL wait and wait......until prices drop to a sensible level.(-30%)

even though i have a very large deposit for a house,i WONT buy

well the interest on my savings do pay half my rent each month

even if it takes 5 years+ i WILL wait..........like many ftbers out there.


........and if i miss the boat again,i will just go on a big shopping spree


;D lol.

whoever

I couldn't agree more.
The funny thing is, when I bought my property 2 years ago everyone was telling me there was going to be a price crash etc etc.

First time buyers claim they can't afford property but a mortgage is so often cheaper than the monthly rent. Many mortgage companies are offering 5.2% fixed for 5 years and one estate agent I spoke to had a deal where they would offer 4.2% fixed for 5 years (i.e. 1% below what the mortgage company was offering to everyone else if you used their financial advisor - which was free). So theres no excuse that the interest rate may rocket and you can't afford the repayments.

deemy2004

Hey ! Stop talking the housing market up !

Sshhhhssss

A lot depends on what happens AFTER the next election.

To the economy, currency, etc...

As the government is not going to do anything that will hurt their electoral chances in the meantime

gallygirl

When the "buy to let" brigade realise that prices are starting to fall (in some areas,they already have) there will glut of houses put up for sale and as prices fall and panic grows it will snowball into a stampede.

Sorry, beg to differ. Depends on what end of the BTL sector you're talking about.

I let to the cheap end of the market & think prices will drop slightly. As soon as they do I'll be moving in to buy another. I can afford a bit of a risk - a 5% drop on a 100k house being substantially less than 5% drop on 500k.

dougk_2

I agree with ali007.

Many BTL are out there different reasons.
People if I had a BTL property purchased in the last year or so I would be keeping my property as I wouldn't want to loose money by selling it if prices dropped.

Lets face it rental prices are very unlikely to go downb much, and if there is panic selling these people will rent increasing demand for rental properties.

I see BTL a win win situation still. Maybe it just means the investors need to keep them for longer before selling.

Prices will only drop substantially due to panic and media hype.

A 5 to 10% dfrop is neither here nor there for many people (£ 15- 20k is not a huge debt unless it is combined with other debts like credit cards).

Loaded_Bachelor

I am sorry but I don't agree with some previous arguments that a quick 5% fall won't flush out sellers who have buy to let properties. 5% is 5% whether its on £100K or £500K. Also, I would think that most BTL properties are in the £80K to £170K range anyway.

An analagy............. someone who buys a share at 100p and who gets an annual dividend of 5p but sees the share price itself quickly fall by 5p WILL think about selling the share for 95p in order to get out for a break even and to avoid a potential loss. Remember that the funding to buy the share in the first place effectively costs around 4%. (the net amount that one can comfortably receive on money in a savings acount).

And what about the investor who bought the shares at 80p (or 80K in the case of a BTL investor), would they sell at 95p? Well maybe they wouldn't; however, they could well have a "stop loss/take a profit" figure in mind of say 85p.

This is the simple theory of how markets can fall. A slowish fall perhaps from 100p to 90p then a quick fall to 85p and then sheer panic. It is purely a momentum thing usually consisting of 25% realism and 75% herd mentality and two important phrases to remember when you are "long and wrong" are, "the first cut is the cheapest" (sung to Van Morrison's tune of a similar name) and "sell while you can, not when you have to".

deemy2004

Yep

Most market participants at this point in time are still have a rising market mentality. I.e. eventhough prices ARE falling, it has yet to sink in that prices are falling.

It takes, time for this realisation to dawn, especially as declines in the initial stages don't tend to be orderly i.e. mixed signals, plenty iof contray bullish news, so plenty of straws to grasp at take comfort on and ignore the decline to date.

Nope give it time, at the very least till after the next election, maybe a year down the road, when it will finally start sinking in and the greed factor will have well and truly turned into fear.

At present it is very difficult to convince those with vested interest in the property market, as they have not experienced any real pain yet.

So give it till say Nov 05, and then we shall see what the housing picture has evolved into .

John_M_Business

Could I just say ONE thing? ALL THIS IS SELECTIVE SPECULATION!

The graphs, the future values, the market trends, everything. One person quotes from a source at the Bank of England, another from a couple of newspapers, someone flings up some fancy graphics... but it's all crystal balls, smoke and mirrors.

The thing is that we all have vested interests - some of us are homeowners or developers - these people will generally be bullish about the marketplace...

Others aren't owners yet, and I believe there are also some that are actually investing in the futures of the housing market... therefore it is in THEIR interest to talk DOWN the market.

The only thing I can recommend is that anyone who is in the process of making a decision on buying / selling a home understands that, in the end it's a long-term thing - not necessarily for financial gain (although that would be nice), but also for a relationship / family / friendship, whatever BUT NOT JUST THE MONEY.