Wow 50% here we come

Badger_Lady

They will only get cheaper if everyone starts selling them at once. Everyone will start selling them if:

- they can't afford it any more (interest rates, unemployment)
- they all think the market's going to crash (causing a crash through speculation, a bit like the Northern Rock savers' panic to withdraw)

The report above didn't say anything about house-prices dropping, it repeated "the boom cannot continue", "price rises cannot be sustained", and "house prices remaining static". Remaining static is not the same as falling.

Everyone needs to live somewhere - I'd rather live in my own home than a rented one, even if its capital value drops for a time.

It's still possible to "beat the market" by buying in an up-and-coming area - even if the UK average price drops, your area might remain static or even continue to rise.

pamaris

Badger_Lady wrote: »

It's still possible to "beat the market" by buying in an up-and-coming area - even if the UK average price drops, your area might remain static or even continue to rise.

Gosh I figured all areas in the UK had already come and gone.

Badger_Lady

pamaris wrote:

Gosh I figured all areas in the UK had already come and gone.

Nope, not yet - some areas you can still buy a property for £40k.

Look at Newport in Wales - house prices have not increased anywhere like the rest of the UK yet, and you can still buy a 3-bed terrace for under £100K, but it's got fantastic access to the M4, Cardiff and train line to London (2 hours)... and a massive redevelopment plan across the city centre including shopping centre, new railway / bus stations, riverside flats, university campus... no matter what happens in the rest of the UK, you can still invest your money safely in a house there.

dannyboycey

I think the Northern Rock episode has illustrated just how important sentiment is in the whole situation. People have been told by both NR and the government that their money is 100% safe, yet savers and investors are running for the exits in droves.

If the majority of the public have 'a feeling' that the property market will crash, chances are it will.

Martinslovechild

Nobody on here's mentioned the possibility of a recession.

My own feelings are that there will be a recession beginning in the U.S. in the next couple of years. This is based on demographics and a sudden slowing in the spending of baby-boomers and echo-baby-boomers.

This spells trouble for the economy. A recession coupled with the BTL brigade becoming very anxious about their rental income falling substantially lower than their mortgage costs (which will have been increasing on the back of higher LIBOR rates), mixed with generally slowing house prices as a result of squeezing the banks' lending criteria etc.

A recession would likely be accompanied by lots of job losses (particularly in the financial industries, but also housebuilders, construction, car companies, makers of luxury products etc) and a return to trend for the housing & stock markets (we're currently 36% above trend in the housing market), firstly undershooting the trend (i.e. we'd have to fall at least 36% just to hit the normal long-term growth line, which kind of makes the predictions on this thread of a 50% fall in house prices not so outrageous) before returning to trend a couple of years later.

Melissa177

lypsey wrote: »

Generali
You say "That's asking prices. It's not possible to say HPs are falling until Land Registry figures show falling prices"
When I was at school a long time ago if the asking prices were lower then then the selling price WILL be lower , not really sure what you are getting at though

This isn't strictly true. Average house prices are falling because there are fewer expensive houses up for sale (ie, 4 bedrooms plus), which distorts "the average".

If you have nine 200K properties up for sale in a village, and one 1.2 mil property, the average asking price is 300K per house. If the owner of the 1.2mil property decided to sell/market his house before HIPs came in to avoid all that faffing with the certificates, your average asking price would now be 200K.

Does that mean there has been a crash? Of course not.

I would wait for actuals in OND to get a more accurate picture of what is happening.

abaxas

Melissa177 wrote: »

This isn't strictly true. Average house prices are falling because there are fewer expensive houses up for sale (ie, 4 bedrooms plus), which distorts "the average".

If you have nine 200K properties up for sale in a village, and one 1.2 mil property, the average asking price is 300K per house. If the owner of the 1.2mil property decided to sell/market his house before HIPs came in to avoid all that faffing with the certificates, your average asking price would now be 200K.

Does that mean there has been a crash? Of course not.

I would wait for actuals in OND to get a more accurate picture of what is happening.

Price goes up - no-one questions the figures
Price goes down - quick lets find an excuse and leak early

Generali

abaxas wrote: »

Price goes up - no-one questions the figures
Price goes down - quick lets find an excuse and leak early

I just like a good row myself. I question everything.

lisyloo

Nobody on here's mentioned the possibility of a recession.

If there is a recession, then lots of Polish people could return home (if they can't get work) leaving some empty BTLs.
That could exacerbate any BTL sell off.

Personally I hope this doesn't happen and we have a more orderly slowdown but I'm not now sure that this is possible.

Generali

lisyloo wrote: »

If there is a recession, then lots of Polish people could return home (if they can't get work) leaving some empty BTLs.
That could exacerbate any BTL sell off.

Personally I hope this doesn't happen and we have a more orderly slowdown but I'm not now sure that this is possible.

I've got a nasty feeling that things will be worse than that. More like Japan 1990-today. You never know though. I hope I'm wrong.