Barratt warns of house price falls - the fears are spreading

dannyboycey

ModernSlave wrote: »

Hi!

Please could you send me the address of where you bought your crystal ball?

Thanks!

https://www.sarcasmisthelowestformofwit.com

ModernSlave

dannyboycey wrote: »

www.sarcasmisthelowestformofwit.com

Must be why it's so popular

CB1979_2

dolce_vita wrote: »

CB's post is in itself evidence of changing sentiment.

He has been a champion of HPI and has always refused to even acknowledge the possibility of a crash.

Here he is saying "we'll see".

I rest my case.

I'm hardly a champion of HPI! lol

i've never said there will not be a HPC, just don't like these people who have been "predicting" one for what's coming up to at least 4 years and now they start their "ha, told you so" threads!

so if i start a "prices will come back to 2007 prices level" thread when/if prices reduce i can start saying "well i told you so" when they do.

just cos people have said something doesn't make them an economic guru to realise about boom & bust cycles, just means they have said something that may happen (well that they desperatly have been hoping for years) and they think they're clever for saying it????

it's obvious prices will stabilise at best and no doubt will come down at some point, just because someone has lifted an article to back up their position there's also another one out there saying the opposite.

what I'm more interested in are the people who still think they'll be able to buy when/if prices reduce, yet STILL won't be able to, due to credit crunch & lack of decent deposit.

the people who are so desperate for prices to fall are obviously just desperate to buy a house (there's a small minority that actually want them to stabilise/reduce a little for the benefit of the economy).

yet i still haven't had a decent response from these people that houses are such an unreliable "investment" yet they want to jump on the ladder asap - WHY?
and if they do eventually get on, will they then still want prices to fall?
if HPI then returns and they have £100k equity (say in 10 years) will they then still be wanting a HPC then or would their outlook become somewhat different?

wow that was a long reply! lol

pamaris

CB1979 wrote: »

yet i still haven't had a decent response from these people that houses are such an unreliable "investment" yet they want to jump on the ladder asap - WHY?
and if they do eventually get on, will they then still want prices to fall?
if HPI then returns and they have £100k equity (say in 10 years) will they then still be wanting a HPC then or would their outlook become somewhat different?

wow that was a long reply! lol

I want to get on the "ladder" not so I can have an investment but so I can have a home. If I want an investment I'll call Fidelity (or Jupiter, or Invesco, etc.) If I have 100k equity in 10 years it won't mean diddly squat to me unless I want to downsize, move to a deprived area or rent.

Plenty of homeowners will welcome a HPC. Easier to upsize.

The reasons I would rather buy instead of rent are A) security... and so that I won't have to pay rent/ mortgage when I'm 65.

adr0ck

Goodbye Prime Minister Brown
Goodbye Prime Minister Brown
Goodbye Prime Minister Brown
Goodbye Prime Minister Brown
Goodbye Prime Minister Brown
Goodbye Prime Minister Brown
Goodbye Prime Minister Brown
Goodbye Prime Minister Brown
Goodbye Prime Minister Brown
Goodbye Prime Minister Brown

:T:T:T:T:T:T:T:T:T:T

Doc_N

going2die_rich wrote: »

I think you are dreaming.

Firstly, any crash in house prices leads to banks tightening what they lend out. Would you lend money to a 20 year old on a low graduate wage with no deposit or a 30 something year old with £10k deposit? Also banks will reduce the multiples they use to calculate how much they will lend you making even a reduced house price in todays terms still out of the reach of some peoples means. So how exactly does that get your kids back to being able to buy? If you want kids to be able to afford it in the long term you need more houses with a slow down in house prices but an increase in salary. But that isn't going to happen at the speed thats needed.

Secondly, the buy to let market is ver small comapred to residential buyers, but they have less to worry about anyway if the house prices did drop, as buy to lets are long term investments. These are people who decided to buy a house instead of pension pot, so are in for the long game. Which means a drop now has no meaning to them, since they aren't intending to sell till 20 or 30 years later down the line.

Thirdly, if a crash does happen, don't expect to be jumping in getting a bargain for your kids, as their are plenty of other investors with far deeper pockets than yourself who will be picking up property/land like it's free. They can also afford to hold on the years it takes for prices to go back to booming, before selling up.

Will you be gutted if a year passes any no house price crash has occured? As thats what's going to happen, so just settle for a 10-20% drop

You're wrong, I'm afraid. It's the very fact that banks are reducing the multiples that will cause prices to drop. It's not just supply and demand of houses that matters - it's the supply of money as well, and as that dries up, prices fall. Check the history of money supply and house prices.

And the percentage of BTL people is actually quite high at the bottom end of the market, which is where the FTBs are.

As for investors piling in to pick up cheap houses, why would they? Why pile in on a falling market? They're more likely to be selling to reinvest elsewhere rather than see their houses continue to fall in value.

The frequently given advice for buyers at the moment is to hold back for a few months. If that doesn't cause a big drop in prices I'll be amazed. Few buyers inevitably means falling prices. Why is there this odd myth that house prices are somehow sacred and can't burst like any other bubble? Was nobody around in 1990?

dannyboycey

adr0ck wrote: »

Goodbye Prime Minister Brown

:T:T:T:T:T:T:T:T:T:T

Not if he calls a snap election in the next few weeks.

JohnInDebt

dannyboycey wrote: »

www.sarcasmisthelowestformofwit.com

That link doesn't work for me

tomstickland

Interesting reading. I'd love a bit of price reduction so that my friends could afford to buy somewhere, though I'd be a risk of negative equity.

He said the long-term fundamentals for the UK housing market remained unchanged with demand still far exceeding supply, but in the short-term there is bound to be a weakening of the market.

tomstickland

think you are dreaming.

Firstly, any crash in house prices leads to banks tightening what they lend out. Would you lend money to a 20 year old on a low graduate wage with no deposit or a 30 something year old with £10k deposit? Also banks will reduce the multiples they use to calculate how much they will lend you making even a reduced house price in todays terms still out of the reach of some peoples means. So how exactly does that get your kids back to being able to buy? If you want kids to be able to afford it in the long term you need more houses with a slow down in house prices but an increase in salary. But that isn't going to happen at the speed thats needed.

I disagree. Those are who not prepared to buy at high income multiples will have prices fall into their range. The banks are still lending at traditional mutiples.

Secondly, the buy to let market is ver small comapred to residential buyers, but they have less to worry about anyway if the house prices did drop, as buy to lets are long term investments. These are people who decided to buy a house instead of pension pot, so are in for the long game. Which means a drop now has no meaning to them, since they aren't intending to sell till 20 or 30 years later down the line.

There's a lot of BTL "investors" who are relying on capital appreciation, whilst making a loss on the interest payments. Many of these people haven't really got a sound business plan other than thinking that BTL is a magic money machine. When they start panic selling that'll have an effect.

Thirdly, if a crash does happen, don't expect to be jumping in getting a bargain for your kids, as their are plenty of other investors with far deeper pockets than yourself who will be picking up property/land like it's free. They can also afford to hold on the years it takes for prices to go back to booming, before selling up.

If this is the case then why didn't it happen after the last crash?