House Price Crash Discussion Thread

nobblyned

Mr._H wrote: »

Arguing using facts rather than hearsay, anecdotes and blind conjecture is pompous?

Ok, a bit harsh, apologies, I was referring to you suggesting something had gone over my head, whereas in fact I just honestly disagreed with you and felt I was just presenting another point of view.

I guess I am surprised that so many people view 39k as that high, the perception of 'being rich' clearly varies more than I had thought from person to person. Probably time to drop the topic now!

exil

Other than to note that only about 20% of full time employees in the UK earn more than 39k. Even in London only 30% or so earn that much.

Anyway - does it matter if house prices fall? Depends on who you are

1. First Time Buyer - good news
2. Existing homeowner with lots of equity and no intention to sell - your theoretical net worth will go down - so less scope, for example, for equity release, downsizing or remortgage. But other than that, no real effect
3. Existing homeowner, lots of equity, wants to move -
will find it difficult to sell (but easier to buy)
4. Existing homeowner, 100% mortgage, no intention of moving - no real difference as long as you keep paying the mortgage
5. Existing homeowner, 100% mortgage, struggling with payments, or forced to sell due to job etc - bad news, negative equity awaits

Basically category 1 are better off, category 5 worse off. Whilst in a boom the reverse applies.

I was caught ought by a market fall in the 80s but found that what I lost out on on the sale I gained on buying a new house.

boinging_2

exil wrote: »

Other than to note that only about 20% of full time employees in the UK earn more than 39k. Even in London only 30% or so earn that much.

Anyway - does it matter if house prices fall? Depends on who you are

1. First Time Buyer - good news
2. Existing homeowner with lots of equity and no intention to sell - your theoretical net worth will go down - so less scope, for example, for equity release, downsizing or remortgage. But other than that, no real effect
3. Existing homeowner, lots of equity, wants to move -
will find it difficult to sell (but easier to buy)
4. Existing homeowner, 100% mortgage, no intention of moving - no real difference as long as you keep paying the mortgage
5. Existing homeowner, 100% mortgage, struggling with payments, or forced to sell due to job etc - bad news, negative equity awaits

Basically category 1 are better off, category 5 worse off. Whilst in a boom the reverse applies.

I was caught ought by a market fall in the 80s but found that what I lost out on on the sale I gained on buying a new house.

Category 1 is not choosing to stay off the property ladder, they are forced, yet category 5 is on it through bad financial planning / advice. The banks are thankfully waking up to the fact that offering 125% mortgages to people with a self certified (certilied) application is a bad idea.

morg_monster

can i add another category:

FTB who really wants to buy asap and not spend another few years in rented accomodation waiting to see what happens to the housing market.

In theory not worse off financially if they manage to hold out, but irritability levels rise and stress multiplies, induced by lack of secure housing and the difficult decisions to be made...GR!

VFR-Rider

Personally I've now decided not to buy for a while. I was expecting to purchase around Autumn, but I believe it makes a lot more sense for me to keep going & deposit building... heck if the possible 40% drops happen I might be mortgage free on my first house!
:dance:

wolvoman

VFR-Rider wrote: »

Personally I've now decided not to buy for a while. I was expecting to purchase around Autumn, but I believe it makes a lot more sense for me to keep going & deposit building... heck if the possible 40% drops happen I might be unemployed and unable to get a mortgage on my first house!
:dance:

Edited for accuracy.

fc123

exil wrote: »

Anyway - does it matter if house prices fall? Depends on who you are

1. First Time Buyer - good news
2. Existing homeowner with lots of equity and no intention to sell - your theoretical net worth will go down - so less scope, for example, for equity release, downsizing or remortgage. But other than that, no real effect
3. Existing homeowner, lots of equity, wants to move -
will find it difficult to sell (but easier to buy)
4. Existing homeowner, 100% mortgage, no intention of moving - no real difference as long as you keep paying the mortgage
5. Existing homeowner, 100% mortgage, struggling with payments, or forced to sell due to job etc - bad news, negative equity awaits

Basically category 1 are better off, category 5 worse off. Whilst in a boom the reverse applies.

I was caught ought by a market fall in the 80s but found that what I lost out on on the sale I gained on buying a new house.

I'm no 3..... want to sell Autumn 08 (tenants leave end July). The not knowing how things are going to pan out is :mad: .
We're just Mr + Mrs Ordinary.........didn't even notice the credit boom happening. Stupid of us.

VFR-Rider

wolvoman wrote: »

Edited for accuracy.

Anything's possible I guess... however I would be incredibly surprised...

mr.broderick

VFR-Rider wrote: »

Anything's possible I guess... however I would be incredibly surprised...

Surprised about?? Believe me if we have a 40% correction this country's had it.

tr3mor

mr.broderick wrote: »

Surprised about?? Believe me if we have a 40% correction this country's had it.

You got it the wrong way around...

This country's had it, we will have a 40% correction.

:money: