House Price Crash Discussion Thread

WTF?_2

kingkano wrote: »

But as I said - it doesn't sound like the often touted 'lower house prices benefits everyone', which I see you downgraded to 'more people than not', which I still don't think so - but it does depend on how much lower. It benefits those who don't own a house. Minor benefits to those trading up (assuming they paid enough into the mortgage or can cover any shortfall to the next properties mortgage). Everyone else gets screwed over.

Anyone who bought with a 10% deposit and limited mortgage to 3.5x single/2.5x joint salary should be ok.

People who jumped in in the last couple of years on 100% LTV and/or 5x salary multiples are knackered. Too bad - there's such a thing as being responsible for your own finances.

kingkano

!!!!!!? wrote: »

Anyone who bought with a 10% deposit and limited mortgage to 3.5x single/2.5x joint salary should be ok.

People who jumped in in the last couple of years on 100% LTV and/or 5x salary multiples are knackered. Too bad - there's such a thing as being responsible for your own finances.

I agree re:100% and 5x.

But your claim that the first group will be okay??? If property prices drop 20%?? They'll still be in negative equity and unable to move onto another property?

Like I said - the group it benefits is now getting ridiculously small if your saying it now ONLY benefits those who had 10%+ deposit and borrowed less than 2.5x joint?

mr.broderick

So when are you going to take the plunge !!!!!!? At what point are you going to press the button?

WTF?_2

kingkano wrote: »

I agree re:100% and 5x.

But your claim that the first group will be okay??? If property prices drop 20%?? They'll still be in negative equity and unable to move onto another property?

Like I said - the group it benefits is now getting ridiculously small if your saying it now ONLY benefits those who had 10%+ deposit and borrowed less than 2.5x joint?

You seem to be claiming that I said in my post that 100% everyone, no qualifications, would benefit from lower prices - in fact I said no such thing so I don't see how I'm supposed to defend a statement that you made up and attributed to me. But I do stand by my claim that lower prices will benefit more than they disadvantage.

It's the implosion of the financial system (happening now) and onset of recession (coming real soon) that are going to cause the real hurt as thanks to short-sighted economic mismanagement over the last 6-7 years we are about to get the perfect financial storm. It's all linked to house prices of course (sub prime in the S, decoupling of risk from lending with an asset bubble in housing) but in the normal scheme of things falls in the housing market could easily have been weathered.

Snafflepants

kingkano wrote: »

Somebody who bought in the last year or even 3, putting down 20% deposit and taking a 5yr fixed rate (considered exceedingly long in this country I might add) will be burned up and spat out just like the rest. (if you believe the 30-40% drops people are predicting). It all depends on how bad the economy gets.

Do you mean that they will be in trouble when the fixed rate expires and the interests rates are up or something else?

You basically described us (but I bought 4 years ago), have an 80% mortgage and another 4.5 years fixed. However our payment is below £300 and we both earn over 25k so is very affordable for us now and we could manage payments up to £900 if the worst does happen when we have to go onto variable etc

thanks

WTF?_2

mr.broderick wrote: »

So when are you going to take the plunge !!!!!!? At what point are you going to press the button?

Not anytime soon. The house price crash hasn't even got going yet - we are still in the 'Mexican stand-off' as sellers refuse to take on board economic reality and keep asking prices high. What's happening right now is the first throes of economic catastrophe. Because house prices held up for so long (or were pumped up for so long), we're going to get the crash along with a recession. Nasty.

I anticipate buying 2-3 years down the line as prices bottom out. However, if buying becomes more financially attractive than renting I will start looking to purchase property from that point.

mr.broderick

!!!!!!? wrote: »

Not anytime soon. The house price crash hasn't even got going yet - we are still in the 'Mexican stand-off' as sellers refuse to take on board economic reality and keep asking prices high. What's happening right now is the first throes of economic catastrophe. Because house prices held up for so long (or were pumped up for so long), we're going to get the crash along with a recession. Nasty.

I anticipate buying 2-3 years down the line as prices bottom out. However, if buying becomes more financially attractive than renting I will start looking to purchase property from that point.

Good luck..It will be a tricky call by the buyers who are hanging on for a correction to buy at the right time. If they do crash as !!!!!! is implying cash will be king. I mean who in the right mind will lend money on something thats crashing in value. It will be very interesting to see the prospective buyers fighting each other to buy the stock. It aint gonna happen like people think.

mr.broderick

!!!!!!? wrote: »

Not anytime soon. The house price crash hasn't even got going yet - we are still in the 'Mexican stand-off' as sellers refuse to take on board economic reality and keep asking prices high. What's happening right now is the first throes of economic catastrophe. Because house prices held up for so long (or were pumped up for so long), we're going to get the crash along with a recession. Nasty.

I anticipate buying 2-3 years down the line as prices bottom out. However, if buying becomes more financially attractive than renting I will start looking to purchase property from that point.

Didn't you have the opportunity to buy say 5 years ago !!!!!!? You'd have been on to a winner then sir. Hopefully you'll time it right this time.

WTF?_2

mr.broderick wrote: »

Didn't you have the opportunity to buy say 5 years ago !!!!!!? You'd have been on to a winner then sir. Hopefully you'll time it right this time.

I hardly had any spare cash to my name five or six years ago and I was focussed on other things than speculating on UK property. Today things are very different on the financial front but I know a bad time to get into property when I see one. I'd rather have my cash in the bank than sink it into something that's likely to get a lot cheaper in the coming years.

Plus, with the economic uncertainty of a recession (yes, I'm old enough to remember the last one) I quite like knowing that I have a cash security blanket if it all goes belly up. Now, if only the govt don't go for massive inflation to get us out of this financial mess that the banking system finds itself in. I suspect that there's at least a 50% chance that they will do precisely that.

pickledpink

!!!!!!

Why do you want to buy if you think property is such a bad investment? After all, once this recession is over, and property prices start rising again (as they always do after a crunch/recession/property slump) what makes you so sure property will rise once you've bought?:p

Maybe another recession will come along and you'll lose the lot! If I were you, I'd stay renting. Far more lucrative according to you!:rotfl: