50% house price falls

RabbitMad

harryhound wrote: »

Buy 2 !?!

No problems, only opportunities

Unfortuantely I only have enough money for 1 in cash and the way mortgage lending is going I might not be able to buy a second.

But I feel very confident that most houses in te UK will double in value over the next x years. I don't know what x is, whether its 5, 10, 20 or even 50 but I am very confident this will happen.

However property prices will not drop uniformally. The house I just sold and those around it are unlikely to loose more than 25% in any correction, where as the 1 bed flat that I could have bought 7 years ago for 30K and that just sold for 115K is likely to loose 50% plus I would imagine.

Interesting times ahead. I reckon they're foaming at the mouth over on HPC

vivatifosi

RabbitMad wrote: »

However property prices will not drop uniformally. The house I just sold and those around it are unlikely to loose more than 25% in any correction, where as the 1 bed flat that I could have bought 7 years ago for 30K and that just sold for 115K is likely to loose 50% plus I would imagine.

You make a crucial point RabbitMad. House prices don't drop uniformly. The value of my one bed starter home fell over 30% last downturn (fortunately never in neg eq). If I had a three bed semi in a good area of the same town it would have lost significantly less in percentage terms. It was the FTB and ex-council houses hit hardest last time round (where I am), exactly the people who could least afford the downturn.

ms_fashionista

Forgive me if I am being a real airhead but as a person selling a property I have noticed a big slump in viewings as at this time of the year most people don't buy. However for the first time ever I have back to back viewings. Could the fact that most people are away on hols (& therefore skint) be another factor for the decrease?

pamaris

ms_fashionista wrote: »

Forgive me if I am being a real airhead but as a person selling a property I have noticed a big slump in viewings as at this time of the year most people don't buy. However for the first time ever I have back to back viewings. Could the fact that most people are away on hols (& therefore skint) be another factor for the decrease?

You would think that if someone was about to buy a house, they'd skip the holiday this year.

tr3mor

pamaris wrote: »

You would think that if someone was about to buy a house, they'd skip the holiday this year.

Don't be silly, it's 2007 remember. People aren't going to give up their holidays, plasma TVs or new cars for anything!

tr3mor

lypsey wrote: »

50% house price falls

Only 47.4% to go according to right move! :money:

Turnbull2000

RabbitMad wrote: »

But I feel very confident that most houses in te UK will double in value over the next x years. I don't know what x is, whether its 5, 10, 20 or even 50 but I am very confident this will happen.

Yes, and I feel that the value of a pound coin will also half in value over the next X years. I'm not just confident, but absolutely sure (unless we change to the Euro!).

Nothing unusual in that. Apart from 5 or 10 years, it's all part of general inflation.

WTF?_2

tr3mor wrote: »

Don't be silly, it's 2007 remember. People aren't going to give up their holidays, plasma TVs or new cars for anything!

Pffft - only dorks would consider giving up their flatscreen, exotic holiday, flash car, ipod, laptop, smartphone, designer clothes, fashion watch etc. just because they were making a huge (probably the biggest in their life) financial commitment. Probably the same sort of people who are careful with their money and live within their means - not too many of them left!

Nah, just go to a nice sub-prime company like Northern Rock, get a 120% LTV loan and spend the extra on a new 4x4 and a holiday in the Seychelles with some left over for some nice Elizabeth Duke bling.

Oh, whoops :rotfl:

golddustmedia

You have to look past the media hype and short term fluctuations.

Take the housing market over the last 40 years, INCLUDING the crash around the early 90's, prices have on average doubled every 9 years.

Yes you will find isolated examples where they don't likewise others where they more than double (hence it's an average figure). Property is a safe LONG TERM investment if you're able to wait out any fluctuations that may last a year or so.

Yeah you can speculate about "making £50k in 1 year" on a £200k house, but I say better to look at making £200k over 10 years on it, which is a more realistic AND PROVEN figure.

Also, when saying "prices will drop by 50%" look at the other factors;
- The population is continually expanding from immigration, births, marriage separation, single person living until older etc etc.

The demand for housing continually outstrips supply, even if buyers get cold feet they still need to live somewhere and this feeds the rental market, thus demand remains.

Very few people are in the position that if the property market crashed they would be able to opt out since everyone has to live somewhere, ok you may sell your house to minimize loss but you'll still either rent or buyer a cheaper property. Once all the rental properties are gone you have to buy or demand means someone else will and rent it to you. The only way out completely is to leave the country or become "of no fixed abode" and live in a caravan etc.

Someone mentioned getting a better rate in the bank than on buy to let. Well again it's speculative. I think we'd all agree you're not going to get rich on the interest from your savings in the bank, unless you have LOTS and can live on the interest. Especially once you've had inflation and income tax on them. However if the income from buy to let goes most of the way to paying the interest on a mortgage on the property then you've got an asset that should increase in value and potentially sell at a larger gain. Yes markets fluctuate, but given the choice between putting my savings in a bank and putting them in property, I think I'm more likely to retire on the profit from property, even if the road might be a little bumpy along the way.

Generali

golddustmedia wrote: »

Someone mentioned getting a better rate in the bank than on buy to let. Well again it's speculative. I think we'd all agree you're not going to get rich on the interest from your savings in the bank, unless you have LOTS and can live on the interest. Especially once you've had inflation and income tax on them. However if the income from buy to let goes most of the way to paying the interest on a mortgage on the property then you've got an asset that should increase in value and potentially sell at a larger gain. Yes markets fluctuate, but given the choice between putting my savings in a bank and putting them in property, I think I'm more likely to retire on the profit from property, even if the road might be a little bumpy along the way.

If you save £100 pw at 7% for 40 years, you end up with £1,000,000. A diversified portfolio of investments (including property) should acheive 7% for you.