Media Is Now Predicting A Massive 40% Property Price Crash

SuboJvR

Where I am in the South East, we are buying a new build semi detached. Similar properties 2 miles down the road, at least 3-4 years old, are selling for £50k more. Not like for like but similar in the sense of size, parking available and either a garage or conservatory but not both. It is a bit strange and I've no idea what it will mean for our house in the long run but realistically we won't move for a while. Ideally we are buying our forever home but never say never. I suppose it's always risky to buy.

Brexit could mean a lot of things. It could see prices go down, or they could go up if supply goes down. It means less EU buyers but Brexit could mean easier settlement for non EU people again, especially Commonwealth, which may affect things too.

There's just no way to predict it.

vacheron

Housing is on the brink of collapse!!!!

.....read on...
Experts say housing may be on the brink of collapse

.....read on...
ONE expert we found says housing on the brink of collapse

.....read on...
ONE expert says: I THINK we are BEGINNING to see SIGNS that correction MAY be starting.

"News"

PS. I don't have any preference for house price movement either way, but I will call sensationalist tabloid BS when I see it.

Koldweather1

conqueror01 wrote: »

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We could end up in a situation [due to high inflation] where everything is less affordable (be it your food bill or houses) rather a housing crash?

But if we had that crystal ball...

That would be my bet as well, it could lead to a slow stagnation downwards in price, though with higher inflation as well it may mean people such as FTB may not be all that much better off due to it being harder to save in the first place.

I personally can't see any more large increases in house prices, but equally I don't see anything to shove the prices into crash mode either unless something in the macro background changes.

There is no real reason to believe there is going to be a large change on either side.

As a young (ish) FTB I can say through expeirence that prices in the SE are now out of reach of a large percentage of those in average job roles, I was only JUST able to do it with both my wife and I being teachers AND getting some help from my parents...bank of mum and dad is very important these days.

chucknorris

DaftyDuck wrote: »

Unlikely to be Trashy. He may be wrong, but he presents a well-written, albeit erroneous, case to go with his tripe.

Oh, and Trashy has never started a thread of his own, I believe. Never bought a house through fear of a price crash either.....

He has actually owned a house before, but he sold it the the late 90's, I might be wrong about the exact details, but I believe he was in negative equity, and he sold it when the price recovered and he was move out of negative equity.

SuboJvR

Koldweather1 wrote: »

That would be my bet as well, it could lead to a slow stagnation downwards in price, though with higher inflation as well it may mean people such as FTB may not be all that much better off due to it being harder to save in the first place.

I personally can't see any more large increases in house prices, but equally I don't see anything to shove the prices into crash mode either unless something in the macro background changes.

There is no real reason to believe there is going to be a large change on either side.

As a young (ish) FTB I can say through expeirence that prices in the SE are now out of reach of a large percentage of those in average job roles, I was only JUST able to do it with both my wife and I being teachers AND getting some help from my parents...bank of mum and dad is very important these days.

Agree with your comments there. I've done well to get to the salary point I am at in my field (low 40's), but if I still worked in the public sector it just wouldn't have been possible for us to buy, with my husband in the low 20's, both of us graduates. In fact until my dad offered to gift us some money from a payment he is receiving, I had resigned us to a life of renting! Or upping sticks and going back up north, but not an option as need to be nearer my family.

sheff6107

House crash forecasters are pretty much the same as the Armageddon weather forecasters that lead to nonsense headlines in the Express.

They'll be a house crash one day and a snowstorm one day. And like a clock that is right twice a day, they'll be an 'expert' that takes the credit for 'forecasting' it.

Koldweather1

I've just been running some sums to assess what truth there is in the idea that having a house is better than renting long term...

Needless to say, the answer probably isn't surprising.

I'm comparing it to the flat I'm about to move off and the value it is/rent I would be paying this year.

With a 0% change in rent over the next 53 years you come in close to 600,000 (I think by 80 you'd likely have some social help...I'd like to think so I didn't carry it on further than that!). Compare that to these figures for a 180,000 mortgage with these interest rates over 30 years:

4%: 310,000
5.5: 369,000
7%: 433,000
12%: 670,000

So for renting to be more cost effective purely based on the cost of rent at 0% vs mortgage, rates would probably need to jump around 7-8%. Certainly not impossible in short bursts but averaged over 30 year period probably unlikely in this current global environment.

I then ran some sums with a SLIGHT increase of rent per annum (only 0.2% and in real terms a decent fall) and the figure jumps to 664,000

Finally I did a higher amount, around 2% per annum change (which is still a little lower than the average around my neck of the woods in the last few years) which came out at 900,000, clearly alot worse off.

In reality, alot can have an impact on these, and certainly when in a mortgage, there isnt much difference in rent/mortgage unless either rents rocket or interest rates really shoot up...but it is AFTER the mortgage big savings start to be made, even in a conservative set-up your looking at saving 200-300,000 pounds in that time period which more than makes up potentially for a slightly higher rate over the life of a mortgage.

Still, this maybe overly idealised calculation, but just food for thought!

parkrunner

Well if it happens then it's great news.

patel007

forvar wrote: »

The Telegraph is massively pro landlord and property so maybe not the greatest counterpoint. Not really sure why. I imagine they could be involved in the business. (DM group owns Zoopla for example).

Anecdotally I've seen a huge slump in the South East. High prices being advertised but sellers struggling to find buyers and then settling for lower offers. Prices have gone so far out of whack for ordinary people and first time buyers, imo people just can't afford to get a deposit together or move up the ladder.

Exactly, why should the DM post this as they own Zoopla? The market is over priced massivley and no matter what the agents say, they are on their last legs trying to keep prices up/stable

Koldweather1

patel007 wrote: »

Exactly, why should the DM post this as they own Zoopla? The market is over priced massivley and no matter what the agents say, they are on their last legs trying to keep prices up/stable

Never underestimate how far vested interests can kick the ball down the road. In 2010 who would have believed you if you said interests rate would be LOWER than they were 7 years earlier!

If there is any major correction the government will simply kick start another variant of HtB. No party will want a major crash to fall on their watch and so the politicans and perhaps more important the media/landed people who will lose ALOT of money if prices shoot through the floor will not allow a crash, or at least not willingly. As I said I can see a correction, but I think there are still yet more twistds and turns the Central bank and government can unfortunatly pull out the bag before it eventually does totally deflate