Debate House Prices


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House Price Crash Discussion Thread

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  • tr3mor wrote: »
    You got it the wrong way around...

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

    :money:

    Yeah you could be right, i know i am definitely right.
  • I just wondered - at what point do those predicting a crash think it will happen? It seems to me that these predictions have been on here for some time, and no crash as yet. Can you put a date on when, for example, there will be a 20% drop (or whatever you see as the criteria for a crash) from today's prices? What is your reasoning?

    City-centre new build flats are a 'special case'. What about the rest of the market?

    My view - prices will be pretty robust. Very few forced sellers, low interest rates. Ok, so the economy may go into reverse - but then falling house prices would be the least of our worries.
    18 May 2007 (start of Mortgage):
    Coventry Offset Mortgage £220800
    Offset Savings: £0
    Mortgage Balance: £220,800

    14 Jan 08
    Coventry Offest Mortgage: 219002
    Offset Savings: 28200
    Mortage Balance: £190802

    And still chucking every spare penny into it!
  • Vincenzo
    Vincenzo Posts: 526 Forumite
    HammersFan wrote: »
    I just wondered - at what point do those predicting a crash think it will happen? It seems to me that these predictions have been on here for some time, and no crash as yet. Can you put a date on when, for example, there will be a 20% drop (or whatever you see as the criteria for a crash) from today's prices? What is your reasoning?

    A week next Thursday, provided it doesn't rain between now and then. Ha ha! For what it's worth Hammersfan - I think you are right about the robustness of the market generally, save for numerous new build disasters. But who knows!

    By my recollection people having been calling time on the market since 2004 (perhaps earlier?). The only thing I would say for sure is, long term, no problem. The vast majority of people have more than enough equity in their homes to brush off a dip in the market. Those that don't would have to sit tight and hope their jobs are secure.

    I have a question....how long will it take before people stop calling time on a market that keeps proving the doom mongers wrong?
  • beingjdc
    beingjdc Posts: 1,680 Forumite
    Vincenzo wrote: »
    I have a question....how long will it take before people stop calling time on a market that keeps proving the doom mongers wrong?

    How long will it be before believing we will soon live in a country where an ordinary family can afford a reasonable sized home without selling their internal organs will cease to be referred to as doom-mongering?

    Prices have been falling in general for the last four or five months, across a range of surveys. I don't see the massive expansion of mortgage credit, or huge rise in buyer numbers, which will cause that to reverse any time soon.
    Hurrah, now I have more thankings than postings, cheers everyone!
  • exil
    exil Posts: 1,194 Forumite
    Believing that something will happen, that you wish to happen, is not doom-mongering, but it is wishful thinking.
  • Pobby
    Pobby Posts: 5,438 Forumite
    Just had a look at rightmove for my area.Seems to me that asking prices are certainly down from a year ago

    As for a house price crash,now that a lot of lenders are becoming far more strict regarding to whom they lend,my guess is this will have a knock on effect.Just one example, you have a fixed term lie-to-buy mortgage,if you come to renew the fix my guess is that the lender will pay a very increased attention to the real incomes of the borrower.In some cases people will find it very hard to find a lender at all.
  • WTF?_2
    WTF?_2 Posts: 4,592 Forumite
    Yeah you could be right, i know i am definitely right.

    I wonder is Vince Cable, deputy leader of the Lib-Dems right?

    From todays Telegraph:

    http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/02/27/ccvince127.xml

    A lot of pundits are positioning themselves to be wise after the event. But I have long warned Gordon Brown that unbalanced growth led by consumer spending based on borrowing was not sustainable because it did not reflect any underlying improvement in the fundamentals of productivity growth and innovation. I warned him of "record levels of personal debt which is secured, if at all, against house prices that the Bank of England describes as well above equilibrium level". That was five years ago.
    Since then debt and house prices have inflated enormously to levels which, in relation to income, are now the most extreme in the developed world. The bubble is now bursting. Forward markets tell us that house prices are likely to fall 10pc on average this year. Serious people anticipate a 30pc to 40pc correction over the next few years.


    Nicely said, Vince.
    --
    Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
  • HammersFan wrote: »
    I just wondered - at what point do those predicting a crash think it will happen? It seems to me that these predictions have been on here for some time, and no crash as yet. Can you put a date on when, for example, there will be a 20% drop (or whatever you see as the criteria for a crash) from today's prices? What is your reasoning?

    City-centre new build flats are a 'special case'. What about the rest of the market?

    My view - prices will be pretty robust. Very few forced sellers, low interest rates. Ok, so the economy may go into reverse - but then falling house prices would be the least of our worries.

    You want a prediction - house prices (sold prices) will be at least 10% lower by Oct 2008 if you look at a YoY comparison (i.e Price at 1st Oct 2008 vs Price at 1st Oct 2007).

    Is that a crash? That's for you to call not me. All I know is that I can buy a house cheaper today than I could in June 2007 and by October 2008 houses will be cheaper than if I buy today.
    Keep the right company because life's a limited business.
  • m00m00
    m00m00 Posts: 1,755 Forumite
    even 0% hpi will 'feel' like a crash to the HPI zealots
    It's a health benefit ...
  • m00m00 wrote: »
    even 0% hpi will 'feel' like a crash to the HPI zealots

    As you say people forget that prices going from 10% growth YoY to 10% decline YoY will be in effect a 20% drop.
    Keep the right company because life's a limited business.
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