UK house price to crash as global asset prices unravel

Mistermeaner

Crashy_Time wrote: »

You don`t need to be out on the street for your house to drop in value, and any big uptick in unemployment will lead to us leaving the EZ, and as that eventually unravels interest rates will be pushed up. Leveraged BTL will take the biggest hit IMO.

A drop in value is meaningless though - everything is notional until a transaction occurs and if eg people are told their house is worth half of what they think it is they wont sell so no transactions occur

There will be very very few distressed sales. Banks will have no interest in repossession below debt value. What's the point in evicting someone in negative equity to try and sell a house for less than the debt when the debtor would just bankrupt themselves. Better for the bank they stay in the house and pay their mortgage.

Where are the empties going to come from? Who will be moving? Who will be building?

globalds

The only thing that would happen in a crash is that more property will be held as investments by corporate landlords.

It will be harder to be a home owner ...Not easier

CLAPTON

Crashy_Time wrote: »

No, what is going to happen is that BTL is no longer viable, and many will try to sell up, and there will be a backlash against the amount of people trying to come and live in London and the UK in general. If the PTB don`t play it right we are going to be parting ways with the EZ IMO.


The stage we are at is that probably for the first time since he started posting on property forums Hamish has a house that is losing value, and the Telegraph are running headlines that read like HPC website thread titles! Happy days! :rotfl:

if the population of london starts to fall, then yes, rents and price will start to fall too

when are you predicting that the population will fall?

MARTYM8`

While we would all expect the trajectory to be upwards long term the increase in house prices in the last 3-4 years - particularly in London and the south east - has been extraordinary.

It certainly looks like a bubble that has grown a bit too quickly.

We shall see!

anchovypizza

globalds wrote: »

The only thing that would happen in a crash is that more property will be held as investments by corporate landlords.

It will be harder to be a home owner ...Not easier

LOL LOL LOL LOL


First upcoming crash I take it

Jon_B_2

I can see in the SE and London it is possible a correction could be on the cards.

I do struggle to understand how this will impact the rest of the country. I likewise expect stagnation.

As a homeowner I'm not overly precious about my house value. I'm here for long term and to live in. Clearly negative equity isn't a position I'd like to be in, but I guess in an uncertain world we would all have to deal with it.

westernpromise

One bit of that article that is manifest rubbish is this:

The prices are also dictated by estate agents, who have an interest in inflating them to raise fees.

Er, no, prices are established by buyers. Estate agents have an interest in deflating prices because their commission is much the same whether the price is £900k or £800k but in the latter case it will be easier to find a buyer and hence to earn something at all.

The writer seems very young and has probably never sold a house.

InvestInPoker

mystic_trev wrote: »

http://www.telegraph.co.uk/finance/property/house-prices/12087971/UK-house-price-crash-looms-as-global-asset-prices-unravel.html

Thanks for posting, interesting link especially as it is in the Telegraph.

The author needs to look at himself in the mirror though. It reads as if he has written it for maximum paper sales/online clicks (which to be fair he is acheiving) - with no regard to reality.

- Stopping of QE is not the reason for the oil price crash. He does admit this in the article but still uses it as his opening example.

- Share prices do not take 12 months to react to changes in commodity prices, or indeed changes in anything. He also is (deliberately imo) writing this article just after many of his readers will have experienced sharp drops in their S+S portfolios

- Fall in housing prices is not due to QE being stopped, its down to local bubbles bursting (like NE of Scotland) or tax changes (2nd property stamp duty increase and mortgage relief being removed killing the BTL market).

It's pretty easy to see that the new changes against BTL being brought in will result in this year being a buyers market as prices drop. This article however is just trying to sell papers and contains nothing of any note.

luvpump

I really can see see this happening, Hpi has been pushed to its zenith.. Although not a "crash" as such, more like a slow decline as the Economy slows down .

antrobus

Mistermeaner wrote: »

Idle speculation at best no different from what any of us may come up with....

Idle speculation sells newspapers.

InvestInPoker wrote: »

...The author needs to look at himself in the mirror though. It reads as if he has written it for maximum paper sales/online clicks (which to be fair he is acheiving) - with no regard to reality.....

As I was saying.....