House Price Crash Discussion Thread

brit1234

I don't think anyone can deny that prices are going down now. The argument has seemed to move on to how much they will fall.

I predict the way property especially flats are so overvalued and the ever restrictive lending combined with increasing property surplus we are looking at least at 30% falls.

skap7309

Nenen wrote: »

, I don't want to disappoint the nice young couple and I'm not sure if we will get anything better. Any thoughts?

Im sorry to say this but you do not seem to sure about the house (i TOTALLY agree about main road traffic) so what you are saying is it is going to cost you £250,000 so you do not offend two people you do not know?! Crazy.
I am sure they did not think about offending your very reasonable offer when you made it. TBH as they are chasing your original offer i would not think twice about putting in a LOWER offer as they are obviously getting very little interest. If not, there will always be a better house along the lines.

tr3mor

Nenen wrote: »

Any thoughts?

Offer £200k!

:money:

Lotus-eater

skap7309 wrote: »

If not, there will always be a better house along the lines.

Exactly! Always

Also as the market starts slowing down the only houses that are going to be selling easily are the perfect ones, all the other slightly dodgy ones are going to have problems, which might need a deeper evaluation of the price of it.

BobProperty

Lotus-eater wrote: »

....Also as the market starts slowing down the only houses that are going to be selling easily are the perfect ones, all the other slightly dodgy ones are going to have problems, which might need a deeper evaluation of the price of it.

I have always thought this but I'd say the ones in better areas more so than the "perfect ones". The less popular areas will rise in a boom on the "coattails" of the adjacent more popular areas, but they will take the bigger hit on the way down.

Lotus-eater

Well doesn't being in a good area come under "perfect"? But yes I agree with you.

Trollfever

Why pay a quarter of a million pounds for something you do not really like?

As the ERM has been mentioned I like this:

Mr Lamont admitted it had been an extremely difficult and turbulent day, but a Downing Street spokesman said he would not resign. The shadow chancellor, Gordon Brown, said colossal errors of judgement by the prime minister and chancellor had betrayed the British people.

From:
http://news.bbc.co.uk/onthisday/hi/dates/stories/september/16/newsid_2519000/2519013.stm

BobProperty

Lotus-eater wrote: »

Well doesn't being in a good area come under "perfect"? But yes I agree with you.

I was separating the condition of the house from the area. A "perfect" condition house in a good area will sell quickly in a boom and slowly in a downturn, and the price may well have to fall too. A "perfect" house in a not so good area, selling in a downturn, will
always have the problem that buyers will be reluctant if they think they can afford the better area.

PasturesNew

Taking a wander through my memories of how life was back in the last crash ..... for me:

Leading up to the last crash, I remember that for a long time I'd mentally calculate any mortgage payment and council tax (community charge back then) to be:

1) Take the house price, say £75,000
2) Knock the end two 0s off
3) That's pretty much what a month's mortgage would be

Back then we didn't really have fixed deals. And you could only (strictly) borrow 3x your earnings. You also had to have the (now) fabled deposit or you'd be laughed out of the mortgage company office.

Mortgages were predominantly either repayment or endowment. None of this Interest Only malarky.

We had less choice. Higher rates. Bigger demands/expectations from mortgage companies.

Throwing the above figures into a mortgage calculator, a £75k mortgage at 10% on a 25 year repayment was £688

Now, 20 years ago £688 was a LOT of money!

The cost of living was also higher. There weren't BOGOFs in supermarkets, the cost of petrol was higher in real terms. There was no Internet, no way to find cheaper deals. Nowadays you can furnish a house quite cheaply - couldn't then. Nowadays you can get electrical gadgetry really cheap. You couldn't then.

So, although house prices on paper look cheap if you look back 20 years (where I used to live the average house price was £80k), we were earning less and things cost more. The interest rate was a LOT higher.

But ... we were limited to how much we could borrow. Limited to 3x salary which is the figure that it was considered people could afford to pay back.

At the time, the general expectation was that "over time a mortgage rate will be 8% on average". Yes, 8%. And we were warned/prepared that it could reach 12%, so could you afford it?

Back then there wasn't the credit you get these days either. Most "normal people" didn't have credit cards, just slightly posher people. So somebody with a mortgage didn't have the "other debt" and if they did, it was probably only about £2k.

Back then there was shame in owing money on credit cards. Fear and shame.

During the last crash we didn't have access to information like today. People didn't speak out like today.

We'd only recently stopped having the TV shut down at 11pm. We had newish Channel 4. No Internet. No email. No forums. The whole thing happened quite quietly, individually. Now it will be all open. People will be able to converse on boards like this. There are websites where you can get information, house prices. You can get opinions and advice from people that aren't your mum.

This time it will be different ... for many reasons.

Holly1976_2

Not knowing much about property I was wondering if you could help with a question?

I bought a one-bed flat three years ago for £200k with a £50k deposit and have a 25 year fixed-rate repayment mortgage which was four times my salary at that time (£30k).

Now my salary is £50k and I was wondering if it makes sense to remortgage my flat to release some equity and apply for another mortgage in order to buy a flat to rent out? With everyone talking about a slump in London prices does it make sense to get some money together to buy another property if prices do indeed fall and there are some 'bargains'?

Thanks in advance for any advice you can give me. It just seems that I have a bit of equity in my flat, what with the largish deposit, and would like to take advantage of any opportunities if there is a fall.

Many thanks!

Best wishes,

Holly