House Price Crash Discussion Thread

carpetbelly

movilogo wrote: »

Negative equity warning for first-time buyers as repossessions set 'to jump 75%'

source:
http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=490514&in_page_id=1770

Looks like downturn is just on the bay. :j

the numbers they quote aren't exactly huge though are they... and conflict to a lot of numbers I've read (tbh, a lot of numbers are conflicting hence why I'm not bothering quoting a source). Saying that, all the numbers I've read so far are no where near the number of 75k that were repossed in 1991.

Also, the dailymail?

Sayign that though, I've long been an advocate of a bit of a fluctuate in the market before it restabilises. Personally, I think it would be better off long term if the market fell for people to get onto the ladder but I cannot see that happening.

It's a wait and see jobby imo. I'd love to be proved wrong though! Yes, if it drops as much as some people say I'll end up in negative equity. Though at least my house is my long term home at the moment so Id always planned to be here for a while and I think some more savings might cover any negative equity.

dolce_vita

Try the house price crash calculator HERE

IveSeenTheLight

dolce_vita wrote: »

Try the house price crash calculator HERE

All a bit hypothetical really.
Nobody know by how much if any drop there will be.
Much better for everyone to look really closely at the market for the area their property is in.
All areas will be affected differently than others, so it is foolish to get roped into the hype for the whole of the UK or even large areas when this may not be the case for the area of you properties.

HugoSP

The predictions that I have been looking at/watching seem to forsee a national price stagnation, not a fall.

Interest rates IMO are unlikely do rise, but may not fall either, as the BOE looks to reign in the economy without causing too much pain to homeowners. The credit that IMO needs to be hit is the store card, CC and other similar lending driven by consumerism, rather than the basic need to put a roof over ones head.

The problem for homeowners and the market as a whole is that mortgage lenders are not being competitive, and are therefore hitting affordability. When you have a near perfect market, such as the housing market, ANY change in demand without a matched changed in supply will have an effect.

m00m00

housing a near perfect market ?

not by any economic definition I'm aware of.

price fixing, corruption, barriers to entry, monopolistic behaviour

all exhibited regularly

Pobby

Wow!Using that calculator if my house was to return to the price we purchased it for in 1998 that would be a 76% crash.Now that pretty much puts HPI in perspective for me.Madness!

mlz1413

dolce_vita wrote: »

Try the house price crash calculator HERE

So are you saying that we are about to enter an economic boom which will see so much cash in circulation that the interest rates will have to rise skyhigh to keep everything in check? - ie the late 80's revisited.

Then your prediciting the bubble will burst and an economic slump will see a revisit of the early 1990's?

It's just I hadn't noticed the boom start

did I miss it? or is it around the corner yippee I'll get a payrise!

dolce_vita

mlz1413 wrote: »

So are you saying that we are about to enter an economic boom which will see so much cash in circulation that the interest rates will have to rise skyhigh to keep everything in check? - ie the late 80's revisited.

Then your prediciting the bubble will burst and an economic slump will see a revisit of the early 1990's?

It's just I hadn't noticed the boom start

did I miss it? or is it around the corner yippee I'll get a payrise!

I have read this post a few times now and I can't work out whether you

are being sarcastic or stupid

Please elaborate.

mlz1413

i wasn't being either, i was trying to work out why a calculator had been devised.

The crash of the 90's came about because of a specific set of circumstances i've only seen happen in the 80's

I hadn't seen those circumstances start, so was wondering if they were about to. (I got 10% payrises in the late 80's so that would be great).

pamaris

mlz1413 wrote: »

i wasn't being either, i was trying to work out why a calculator had been devised.

The crash of the 90's came about because of a specific set of circumstances i've only seen happen in the 80's

I hadn't seen those circumstances start, so was wondering if they were about to. (I got 10% payrises in the late 80's so that would be great).

Just jumping in here... but you don't have to have the same circumstances to experience the same result. Just as different events can cause a boom, different events can cause a bust. The current circumstances that are likely to cause a housing bust now are extreme affordability pressures on FTB's, combined with a "credit crunch" (tightened mortgage lending conditions.) In addition we have Johnny come lately BTL investors who are losing money by subsidising their tenants in hopes of long term capital appreciation. If/ when the capital appreciation dries up, they will wonder why they are throwing hundreds of pounds a month away.

Personally, I think that many distressed BTL's will flood the market in April when the CGT changes are put in effect. This is bound to get the ball rolling.

ETA: No, normal people have not been getting 10% pay rises, but supposedly the boom has been supplemented by massive multimillion pound city bonuses, which are drying up now.