House Price Crash Discussion Thread

IFA

!!!!!!? wrote: »

Alternatively you could have bought gold seven years ago and trebled your money in that time. What on earth is your point again?

Damn, I wish I'd bought an engagement ring 7 yrs ago! Guess I missed the boat lol (Have you seen the price of rings lately? Unbelievable) Sorry off topic carry on...

beer_tins

A "fair price" is the price a buyer is willing to pay. If they don't like it they can offer less or walk away. There is high demand in this country so prices are high. Everyone has their own idea of a "fair" price, but the market determines the real value, which is the price it can sell for.

mr.broderick

!!!!!!? wrote: »

Alternatively you could have bought gold seven years ago and trebled your money in that time. What on earth is your point again?

I'll admit it i missed the gold boat...

dolcevita

beinerts wrote: »

A "fair price" is the price a buyer is willing to pay. If they don't like it they can offer less or walk away. There is high demand in this country so prices are high. Everyone has their own idea of a "fair" price, but the market determines the real value, which is the price it can sell for.

Demand is not the same as desire.

Demand is linked to ability to pay. And as the ability to pay such high prices is removed, then by definition, demand drops.

As demand drops so does the price.

It is that simple.

aztec21

dolcevita wrote: »

Demand is not the same as desire.

Demand is linked to ability to pay. And as the ability to pay such high prices is removed, then by definition, demand drops.

As demand drops so does the price.

It is that simple.

Yes but the bottom line is that not everyone that has the 'desire' to buy a house will be able to. It has always been this way and will always stay this way

beer_tins

dolcevita wrote: »

Demand is not the same as desire.

Demand is linked to ability to pay. And as the ability to pay such high prices is removed, then by definition, demand drops.

As demand drops so does the price.

It is that simple.

True, but the question is how much is the ability to pay reduced? Not enough to cause a crash IMO, though we're likely to see a slowdown in real terms. If a family can only afford a £190,000 loan where a year before they could have afforded £200,000 they can obviously afford to pay less on a national level it means a drop, it's just not nearly as dramatic as some people are saying IMO.

dolcevita

beinerts wrote: »

True, but the question is how much is the ability to pay reduced? Not enough to cause a crash IMO, though we're likely to see a slowdown in real terms. If a family can only afford a £190,000 loan where a year before they could have afforded £200,000 they can obviously afford to pay less on a national level it means a drop, it's just not nearly as dramatic as some people are saying IMO.

See post #17 on the "good time for first time buyers" thread.

beer_tins

Well, I think in a year's time I'll treat the change in house prices with a shrug of the shoulders and maybe a yawn. Your opinion of the scale of the slowdown is obviously very different from mine.

fc123

!!!!!!? wrote: »

Maybe you could band together and negotiate a better rent deal? The prospect of losing loads of hard to replace clients in this market should make them sit up and take note.

Have already been collecting evidence (tenants done a runner in the night, chain had a 50% reduction despite having upward only clause etc) and will be using a respected surveyor to negotiate...but would be simpler and cheaper to leave it as it is (but big London property invst / pension fund can't possibly make things straightforward and simple can they?)

...but we are going all the way this time, to arbitration.

All my neighbours bar 2, are massive chains (Bauger / Costa etc) so aren't the type of neighbours who join in with any campaign....they don't even pay anything into the Xmas lights fund for the street.

3 of us (the poor, independents) pay to provide and light up the whole St of 12 units.
however I do gently remind visitors that patronising Starbucks etc is not good for the area they like to visit.


Also I have been thinking......the big diff between this HPC (IF it happens) and the early 90's is the change in renting...in that, last time, renting out your house and re-locating, for example, wasn't really done.
No AST's then like now.

People had to keep dropping price so they could move, but this time, one can deal with a situation like that differently.


The ability to borrow (or not) will affect it the most though but I think it will take a couple of years to kick in.

blue_monkey_2

Yes, of course, call me selfish if you want, it would be lovely to have a place to live that is not Local Authority so that we can give it back and someone who can't afford to buy can have it to live in......

Of course, WHEN we get housed by the council (as we will, even if it means going into a hostel first) I am OK Jack as I will have a house for life and a long term assured tenancy, why should I be worrying? No worries about paying a mortgage off, rising interest rates, house price crashes leaving me with negative equity, if times get rough no worries about having to downsize as I'll apply for housing benefit and get that to paymy rent. However, I would rather be able to afford to buy something but unless something happens - such as winning the lottery (which I don't do as it is a waste of money) then the 'average wage earner' is not going to be able to.

Maybe I would like to say you are selfish for thnking we do not deserve to have anywhere to live as we 'missed the boat'. Who is going to lose out if there is a crash? the people who were FTB and bought at a high price everyone else should be able to concede a drop as they bought at much lower prices and have been able to move somewhere nicer because of the rising prices. Any FTB from the last 7 years is going to be the only loser.

But no-one really answered my question, did they? Where is everyone going to go when they can't afford to buy or rent? Ideas on a postage stamp please....

If First Time Buyers cannot afford to buy or rent then where will they go? Bearing in mind that prices are around here £130k for a flat, say someone has managed to save 20k deposit (is that a usual/fair amount) then this means they need a mortgage for £110k, this means they need to be earning at least £36k. The 'average' wage is 23k. So you are saying that only the Middle Classes deserve to have somewhere to live?

I guess only time can tell, no-one can predict these things can they, but just a look at the other threads and boards gives a pretty grim outlook though.