House Price Crash Discussion Thread

boinging_2

Vincenzo wrote: »

.

Personally, it makes little difference to me either way. If the market stalls, I stay as I am, if it crashes, I stay as I am etc....how many others are there like me? The majority, I suspect.

AHhhhhhh! What is it with this view that house prices falling are bad for people looking to move house?

So your house is worth less, get over it. If you are trading upwards, which I would say most people are you'll recoup it (plus some) on the house you buy dropping in price. So you would be better to move than stay put.

I seriously believe that it's a status things, that people don't want to live in a house worth less than this time last year.

carolt

That is not quite true, Vicenzo - you are an amateur buy-to-let landlord, are you not? Surely a fall in the value of your investment would affect you, and so you would rather not see a huge fall in the value of property, whatever you may claim.

As I potential FTB, obviously it is in my interest to see property prices fall. However the reason I am not jumping on the bandwagon anyway, despite the high prices, is because I, along with the IMF (falls of 40% predicted), HSBC (falls of 30% predicted), even those with very strong vested interests in talking up the property market, such as Nationwide, yesterday (falls of 5% predicted, this year alone), believe property prices are going to FALL dramatically, and therefore this is the very worst time to be buying.

Prices will fall, because some people - those facing repossession, going through divorce, inheritances etc HAVE to sell - and the sensible will do so as soon as possible, to get as much as they can before prices fall further.

No-one HAS to buy - a huge amount of the demand in recent years has been speculative, people such as yourself buying BTL (2.5 million estimated by the most recent figures), second homes or just people buying their own places to live in, 'to get on the ladder'. In this climate only the very brave or foolish (time will tell which) would buy new investments, and FTB's are now prepared to wait, rather than buy any old overpriced rabbit hutch, in the expectation of falling prices.

Plus, as you correctly point out, the credit crunch will mean that even those few who wish to buy may not now be able to.

So whilst transaction volumes will be the first thing to suffer - down c. 40% I think on last year (someone correct me if I'm wrong, or bother to locate the nearest set of figures?) - it is only a matter of time before those having to sell are forced to accept whatever they can get, and prices fall.

Vincenzo

boinging wrote: »

AHhhhhhh! What is it with this view that house prices falling are bad for people looking to move house?

So your house is worth less, get over it. If you are trading upwards, which I would say most people are you'll recoup it (plus some) on the house you buy dropping in price. So you would be better to move than stay put.

I seriously believe that it's a status things, that people don't want to live in a house worth less than this time last year.

I don't know, I didn't mention it, did I?

I am in a situation where I have no intention of moving, (unless I win the lottery!) so like I said, it makes no difference to me what happens to prices at the moment.

Although I expect it would cause a few people problems 'trading up' with negative equity.......not to mention those that could get stuck on std variable rates because no one will give them the LTV they need to remortgage. I think status will be the last thing on their minds.

mr.broderick

carolt wrote: »

That is not quite true, Vicenzo - you are an amateur buy-to-let landlord, are you not? Surely a fall in the value of your investment would affect you, and so you would rather not see a huge fall in the value of property, whatever you may claim.

As I potential FTB, obviously it is in my interest to see property prices fall. However the reason I am not jumping on the bandwagon anyway, despite the high prices, is because I, along with the IMF (falls of 40% predicted), HSBC (falls of 30% predicted), even those with very strong vested interests in talking up the property market, such as Nationwide, yesterday (falls of 5% predicted, this year alone), believe property prices are going to FALL dramatically, and therefore this is the very worst time to be buying.

Prices will fall, because some people - those facing repossession, going through divorce, inheritances etc HAVE to sell - and the sensible will do so as soon as possible, to get as much as they can before prices fall further.

No-one HAS to buy - a huge amount of the demand in recent years has been speculative, people such as yourself buying BTL (2.5 million estimated by the most recent figures), second homes or just people buying their own places to live in, 'to get on the ladder'. In this climate only the very brave or foolish (time will tell which) would buy new investments, and FTB's are now prepared to wait, rather than buy any old overpriced rabbit hutch, in the expectation of falling prices.

Plus, as you correctly point out, the credit crunch will mean that even those few who wish to buy may not now be able to.

So whilst transaction volumes will be the first thing to suffer - down c. 40% I think on last year (someone correct me if I'm wrong, or bother to locate the nearest set of figures?) - it is only a matter of time before those having to sell are forced to accept whatever they can get, and prices fall.

I hope they dont fall cause i dont see why you should wish suffering on people who bought a home for their family just so you can buy one, totally selfish carol.

Vincenzo

carolt wrote: »

That is not quite true, Vicenzo - you are an amateur buy-to-let landlord, are you not? Surely a fall in the value of your investment would affect you, and so you would rather not see a huge fall in the value of property, whatever you may claim.

If that's what you want to call me!

I held on to my last residence as a long term strategy. The rent more than covers the costs, and I had the foresight to get a very good fixed rate deal and kept the LTV below 70%. Besides, I never intend to sell.

Carolt - Do you believe the value of property will be less in say 25 years, than it is today? Or that rents will not grow?

obsessed_saver

Generally, BTL who bought 2003-2004 are ok because that is the time that price/mortgage/rent are in balance. 2005-2006 onwards, unless they've put down a bigger deposit, their rents will not be covering their mortgage repayments. This is what I've seen in Cambridge. Probably doesn't apply throughout the country.

Currently, 2 bedroom places are going for the average of £180k (not new build). Rental is about £800 (roughly will get you a mortgage for £120k).

Some new builds are going £250k+!

John_Pierpoint

Vincenzo wrote: »

Do you believe the value of property will be less in say 25 years, than it is today? Or that rents will not grow?

I don't really care what house prices will be in 25 years time; I will be most unlikely to be here to see it.

However I do believe that prices and rents will be higher IN MONEY TERMS.

I also believe that prices will be lower than now in 30 months time.

I also believe that this planet is running up against "the limits to growth" and elected governments will take the "soft" short term solution of inflating the money supply in an attempt to keep (foolish?) young families in their homes and off benefits.
The US dollar is already the biggest default in history from a Chinese view point and shortages/inflations in commodities are already causing riots round the world.

It may be that the residents of the Euro block, with its slightly left wing feel and stable population, might best survive the next 10 years. However it will be assaulted by migration and held to ransom by energy suppliers.

I would recommend those 25 to 30, to do their homework on employment and sustainability prospects and start looking for a wreck to renovate/extend in 18 months time. It would be hard work if you have the skill to DIY, but there should be some cheap unemployed building workers by then.
Don't be tempted to over extend yourself by trading up to a big detached property, The countryside, even now is still littered with huge piles, built by the wealthy in Victorian & Edwardian times, but now on the buildings at risk register, because they are no longer economically viable.
I see a return to basics - some of the places built in the last 15 years, with 4 figure bathrooms and 5 figure kitchens, will be hard pushed to maintain their relative price let alone afford to have "the wow factor" updated, as it comes to look "so last century". These will be like owning a 4 x 4 as the fuel and tax rates start to bite.

Owning a large multi story property has high maintenance costs.

John

abaxas

mr.broderick wrote: »

I hope they dont fall cause i dont see why you should wish suffering on people who bought a home for their family just so you can buy one, totally selfish carol.

What a loads of tosh!!!

Over the last 5 or so years I've yet to meet anyone who hasnt gloated over their property purchase. Yes they bought it as a home, but also revelled in HPI.

There lies the main problem, people invested their egos into property and are currently attempting to save face. There is nothing more dangerous than a 'cornered animal'.

However I do agree that is it a bit mean to mock, no-one should ever be told they are being laughed at. (hang on.....)

mr.broderick

abaxas wrote: »

What a loads of tosh!!!

Over the last 5 or so years I've yet to meet anyone who hasnt gloated over their property purchase. Yes they bought it as a home, but also revelled in HPI.

There lies the main problem, people invested their egos into property and are currently attempting to save face. There is nothing more dangerous than a 'cornered animal'.

However I do agree that is it a bit mean to mock, no-one should ever be told they are being laughed at. (hang on.....)

I was actually speaking for the families out there with children who bought a home and would face repossession if there was a major crash, if it happens it happens but i dont like people who wish it for their own gain, i judge by your response you have no children and wouldnt suffer if there was a crash. You may think its utter tosh and i would never compare people who bought a home for their families to cornered animals you however i would compare to the latter of your description.

abaxas

mr.broderick wrote: »

I was actually speaking for the families out there with children who bought a home and would face repossession if there was a major crash, if it happens it happens but i dont like people who wish it for their own gain, i judge by your response you have no children and wouldnt suffer if there was a crash. You may think its utter tosh and i would never compare people who bought a home for their families to cornered animals you however i would compare to the latter of your description.

Why should anyone care? People need to live within their means, and if in a 'crash' they lose their homes, they simply haven't.

Please remember there is a huge difference between human need and lifestyle. If people choose to 'better themselves' with debt, it has to be payed back or their lifestyle will suffer. They are not losing their ability to live, mearly a more comfortable one.