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

dougk_2

Remember that the house prices listed are not fully up to date (3 months + old) and that house prices did rise by over 11% last year!

If you are looking at figures 6 months + old then they are not really at the price that housees are selling for now.

Some areas have gone up - some have stayed the same and some have gone down!

dippy

Yes, nethouseprices.com does list the date that the property was sold.

kinster_2

I was able to register at https://www.nethouseprices.com and it was so refreshing. The final sale prices of flats in the block where I'm renting (London) are nothing like the asking prices at the estate agents. There were a couple of mugs that bought at prices close to the asking prices but the majority were much lower. I  really pity these poor mugs who bought houses way over what everybody else was paying. The difference was about 10-20%. I was so shocked.

I think estate agents are putting people off buying houses by asking such ridiculously high prices.  

So all the properties in your block are exactly the same as each other? interior and exterior?

dippy

So all the properties in your block are exactly the same as each other? interior and exterior?

Yip, it's mass production galore. Down to the mirror we all have in our living rooms. When I first visited my neighbour, I thought it looked familiar...

dippy

The figures could make sense. Hometrack is reporting that average sales price is now 91.9% of asking price in London. That's a direct discount of 8.1% on the asking prices at the estate agents.

From peak to trough this year, they're reporting a fall on average of 5% in London. Maybe flats in my region fell harder? The big fall of 5% is very recent though and may not correlate with the older data from nethouseprices.com.

Charger_2

Over the last 80 years or so the average yearly increase in UK property prices has been approx 11% that includes the 2nd World War, and the 3 main prices drops (crashes!) that we have had since.
Please remember that any one who bought in the late Eighties and rode out the high interest rate at the time, has made an absolute Capital Gain killing now !
Also remember that a price drop is only a drop if you sell, if you just hold and keep, then any short term downwards blip will not affect you. The key here is affordability, can people afford their mortgages? In the main, yes I think they can.

Property in this country is still governed by the laws of supply & demand. Some of the factors which affect this are as follows (they are in no particular order)
1. More people split up, divorce etc nowadays, one house breakup can create the DEMAND for 2 properties for the parting couple.
2. Many people want to come and live in this Country (the new expanded EU for example gives new people the right to live & work in the UK, That also creates DEMAND.
3. People are living longer, therefore they need housing for longer, that restricts the SUPPLY of existing housing stock to the market
4. We have some of the most restrictive planning regulations in the world, this definitely restricts the SUPPLY of new housing stock.
5. People have to live somewhere, so either they buy which therefore reduces the SUPPLY of properties available or they rent, in which case someone else buys the property, rents it to them and there is still a deduction in the properties available.

My advice is this: if prices start to dip, wait a little while for the panic to settle in , ie when its reported widely in the national press etc and then BUY. Buy towards the bottom of a dip and not near the top of a spike and then HOLD

dippy

Without the benefit of hindsight, it's always difficult to figure out when's the peak or the bottom.

What was it they were saying about the stock market? If you missed the best 21 days over the last 20 years to buy and sell, then you would have missed out on 80% of the gains that everyone were touting at the height of the dotcom boom?

deemy2004

In the 70's and 80's inflation was high, now its low.

Without wage inflation your not going to be able to get people with enough cash to afford property.

I.e. since 1995 wages are up 50%, houses up 300%, so no matter what, in a low inflation climate house prices are going to be a dead duck for a decade or so....

The only way the housing bull will resume is if inflation takes off...

now if theres DEFLATION, is many pundits still cling to and for which there is STILL a high risk of then you can kiss good bye to rising prices for a LOOOOONG Time.

frugal_dougal_3

You have pretty much reiterated my input Charger, except for your final paragraph.
The problem at present is that the market is paralysed which means that anyone who really does want to/has to move finds that :-
a) They have to wait forever for a buyer to come along to buy their place.
b) They have to wait forever for the owner of the one they are buying to find another place, and so on ad infinitum.

The market is stagnant.
Stagnation = chains that will break more often and take months and months to complete.

In other words it is not going to be as easy to "buy at the bottom" as we would all like to believe.

Charger_2

Ah Yes but big PLC developers for instance have to produce profit for their shareholders come what may, so they will offer nice fat discounts if you really push them.

I accept it is different for private buyers and sellers, at the end of the day its back to market forces, if a seller really has to sell, then a price reduction maybe the only way, which of course means a potential "bargain" for an investor !

Also remember that 75% of all the domestic rental housing stock in the UK is owned by big Companies and not the smaller buy to let investors.