50% house price falls

carolt

Ive always been interested to note that posters always claim their LL is not going to sell - but everyone elses will. Surely we'd have one or two peeps going "actually im a bit worried about being booted out". But curiously no !

Just a passing observation! (Dead_Eye_Jones)

Absolutely valid point - of course I can't be sure that it won't happen. But given known financial position of my landlord, and things they have said, I think it's relatively unlikely. Put it this way, I am happy to make the judgement that the risk of being booted out of here because my landlord sells is much less likely than you being booted out of your house by the bank because you can't pay your 'blooming large mortgage'. Or of me being booted out of my theoretical house by the bank because I defaulted on my 'outrageously large mortgage', if you prefer.

But it's a kind of heads I lose, tails I win kind of argument. If my landlord did decide to sell because house prices were crashing, I'd be in a much better position to buy it off him (or similar property). So I'm happy to base my decision on that. Admittedly, if my landlord 'owned' dozens of properties, bought in highly leveraged style, ie owed millions to the bank, and was subsidizing my rent with his mortgage payments as well, I would be mighty worried.....

manhattan

Badger_Lady wrote: »

When are we going to get bored of the falling knife analogy? I'm there already!

Im changing my user name to Fallingknife, lol:T

WTF?_2

bigmig wrote: »

I'm no expert in the economics of the housing market, but to me the basic laws of supply and demand seem to go a long way to ensuring that house prices will not "crash", although there may be price falls which don't constitute a crash:

The main factors to me appear to be:

- a large increase in inward migration to the UK; and
- a large increase in divorce/seperation etc, resulting in lower household occupancies and more demand for housing.

This has been coupled with an inadequate growth in the supply of housing un the UK, and thus prices increase.

of course there are several other factors (unemployment, interest rates, global economic performance etc), but to me i don't think a crash is possible due to the basic supply and demand problem.

Personally I own a house but rising prices don't benefit me, in fact it may be the opposite. If i want to trade up to a larger house then the gap between my current house price and the new house would have grown along with the market and thus I lose out.

I don't think it's fair at all that the younger generation can't afford to buy a house, whilst a bunch of fat cats are getting richer daily by owning a large number of properties.

A major factor driving 'demand' has been the fact that lax lending and low interest rates have meant that just about anyone can borrow an unrealistically large (and in many cases, un-repayable) amount of money to buy houses. Couple that with a speculative boom and you have all the classic ingredients of a bubble.

Since 2001 the market has been flooded with money and credit - that means inflation. Chinese imports have kept consumer and retail price inflation down so inflation has popped up in other places. Chiefly housing and (I believe) equities.

Take away the cheap, easy credit and you take away the 'demand'. Whilst I'm sure there will be a demand for eight-to-a-house ghetto type places in areas of very high immigration, there isn't nearly the demand to sustain the sort of generally loopy prices that now exist all over the UK.

Couple a credit crunch with a possible and likely economic recession and you have an economic 'perfect storm' coming to wipe out large parts of the UK housing market. I'm glad I didn't buy in the last two or three years, though sorry I didn't buy before 2001 when it all went mental.

fwhorn

Just thought I would put my penny worth in as a seller.

Had my house valued by 3 estate agents, and I advertised at less than the lowest quote thinking it would be a quick sale. The house is ideal for a first time buyer or a family. It has now been up for just over 3 months and 90% of viewers were downsizers wanting to get their money out of their houses. From the highest value of the estate agent to the price I am willing to take is 15% less, can I find a buyer? No. When I put my house on the market, I put an offer on a house which was over 15% less than the asking price and got told no. 3 weeks later I got a phone call saying was that offer still there, I said no to which I was asked was I willing to make another offer.

This isn't a story from the papers, or from a friend of a friend. This happening to me.

Do I think there will be a crash? Have a look round at estate agents and see how many houses have been reduced. I can also say that, my BIL has been renovating houses in the £250000+ market, and he is finding it tough going on selling them.

My friend across the road is a legal exec and the company he works for as seen a large drop in conveyancing and prices for the house's.

People have put some good arguments for and against a crash, I am with the for's. Nothing I have read on this thread inspires me with confidence in the housing market. Nothing that I have read, encountered or heard inspires me in the housing market.

There as been quite a few who have banged on about it can never do this and it can never do that. 3 months ago if I would have said there would be a run on a bank, some of you would of told me to go jangle some keys and put a tinfoil hat on. :rotfl:

I wait with baited breath for the model, theory or kind of newspaper which no doubt will apply to me.

dolce_vita

You have been caught at an unfortunate stage in the cycle and I wish you all the best.

The newspaper to look out for is the sun.
Not that I'm a big fan or anything, but when in about 6 months time they print something along the lines of this.............



"The chancer of the exchequer"




............you will know it's all over.

bargainbarmy

dolce_vita wrote: »

Ignore this guy.

Not only has he a vested interest in continually talking up the market, he is also obviously a fvcking idiot.

It is people like him in his profession that are partly responsible for this mess we find ouraselves in.

No it's people like you and carolt who have got yourselves into your own mess. The whole market is led by supply and demand not by the surveyors. We merely value the properties which people choose to buy. Its the buy 2 let market that has pushed up the prices the most so if people like carolt didn't rent and bought instead there would not be the demand for rental properties and hence there would be less buy 2 lets pushing up prices. harsh words but very true !!! I don't know your situation so can't comment about you but i know that carilt has been wanting to buy for years. My advice is sound ...if you can't afford to buy where you live you buy a property in a cheaper area. Its called common sense...if you miss the boat don't complain that you are stranded.

Have a nice day !!:D:D:D:D:D:D:D:T:T:T:T:T:T

obsessed_saver

Can you go read the other post about that woman who bought 4 flats and is going bust?

The supply & demand this is actually tighly controlled by the property developers and the government (planning permission and all that). So it's been stoked to go up, up, and up because both the property developers and the government benefit from a rising market.

Hence, a bubble is formed.

Things can only stretch so far. And then, the bubble bursts.

Pop.

Have a nice day.

bargainbarmy

obsessed_saver wrote: »

Can you go read the other post about that woman who bought 4 flats and is going bust?

The supply & demand this is actually tighly controlled by the property developers and the government (planning permission and all that). So it's been stoked to go up, up, and up because both the property developers and the government benefit from a rising market.

Hence, a bubble is formed.

Things can only stretch so far. And then, the bubble bursts.

Pop.

Have a nice day.

I read that story. Nobody should ever buy from a property investment club. Not having to put any money down to buy a portfolio of flats costing over £700k surely must have raised alarm bells. The prices were inflated to cover the deposits and the banks allowed people to buy these properties by over inflating their prices so the banks can't complain when the purchasers end up having them repossessed. People have to use their brain a little bit when dabbling in the property market. If somebody is promising you millions for no money something doesn't quite add up. Good old Gordon Brown knew all about these scams and chose to do nothing about it cos he was raking in the stamp duty.

I am having a nice day by the way...are you?:j:j:j:j:j:j

dannyboycey

bargainbarmy wrote: »

My advice is sound ...Its called common sense...if you miss the boat don't complain that you are stranded.

Have a nice day !!:D:D:D:D:D:D:D:T:T:T:T:T:T

Wow. Stupid, narrow-minded and insensitive! You've got it all!

Have you ever thought that some people might not be able to afford to buy? Here's another one.... Maybe some people have held off buying because they don't want to get financially shafted for the next 30 years
, paying for an overpriced house they don't really want.

Many young people are actually putting off getting married and starting families because of the ridiculous mess that Gordon Brown has made of this country's economy. That is very sad indeed and, in my opinion, not something to make cocky, uninformed remarks about.

MissMoneypenny

bargainbarmy wrote: »

The whole market is led by supply and demand not by the surveyors.

I though the market is led by fear or greed?