House Price Crash Discussion Thread

Daz1

House prices are a touchy subject. When I was renting I was hoping that house prices would stagnate so that I could get one. Now that I have one I don't want them to stagnate. The shoe is on the other foot it seems. I do not have a crystal ball so cannot tell what the future holds though will do my best to buffer myself against any looming crisis...if it doesn't happen, then all the better. People take arguments to heart, which is understandable, especially when it appears to threaten their future. I do get angry when people gloat about first time buyers who bought recently being fools because it applies to me. Likewise, when I was renting, I got angry with homeowners who gloated about how much their house is going up, further and further out of my reach. Two sides of the same coin....it just depends which side you happen to be on.........I am happy with my decision and ONLY time will tell if its been the right one, not anyone else hovering like a vulture praying for my demise or telling me how lucky I am and my house is increasing in value daily. Just chill, be happy with your decision, whatever it is and wait and see

boinging_2

My oh my, this thread is getting more vicious as the housing market begins to stagnate*, slow down*, crash*, rise* (*delete as appropriate)....

Any chance we could discuss the topic?

HammersFan

carolt wrote: »

Where we part company, I assume, is in our view of where we think the market will go from here. I (in accordance with the IMF, George Soros, the Nationwide.... I could go on, as you well know) think it will fall, in the short-medium term. I'm as mystified as the next man with regards to long term predictions.

You, on the other hand, state that you don't know how it will pan out; from the advice given, mentioned above, you appear to be more optimistic than me; correct me if I'm wrong.

.

Its not just me who doesn't know how it will pan out. Nobody does. That doesn't make me optimistic or pessimistic. I guess I am fortunate to find myself in a position where I could gain in some way from either rising or falling prices.

But the one thing that does worry me is that it seems unlikely we will get a crash without large scale job losses coming first (hence lots of forced sellers). That seems to have been the case with previous crashes (but I am no expert). That would be very miserable and life-destroying all-round. Me, personally, I'd rather have reasonable house price growth and good levels of employment.

I can't find the sources at the moment, but I have heard quite a few interviews with experts saying that any shapr drops will be focused on new-build city-centre flats / apartments. So it may be that 'headline figures' show some drops, but that the majority of family homes in good areas hold value or even rise (as they seem to be doing where I live).

TheChicken

May I bring into the topic of conversation the following graphs:

http://www.housepricecrash.co.uk/graphs-average-house-price.php
http://www.housepricecrash.co.uk/graphs-ftb-percentage.php
http://www.housepricecrash.co.uk/graphs-ftb-average-house-price-to-earnings-ratio.php

The above to me shows alot and how FTB's will not be buying as much as it is becoming more impossible; through mortgage Lenders dropping the amount they lend and the %on a mortgage.

Make your own minds up but if the FTB is practically pushed out of the market does this not mean a large percentage of less sales?

Ch!ck

BACKFRMTHEEDGE

Hi

I do realise that people want to get back to the HPC theme, but I'd like to point out that the new people on this thread are not trolls. Mr Lewis advertised a new sub board in his newsletter. The new people have arrived to find that they are called "Money Saving Idiots", "illiterate", and "amateur" to name just a few of things that have been chucked around and then when they have said well actually that's not very nice then they are told "we take no prisoners". Urmmm it's just not cricket.....:rolleyes:

TheChicken

How about a link from our main MSE Martin Lewis?

http://uk.youtube.com/watch?v=5UhJytk_5io&feature=related

Turnbull2000

HammersFan wrote: »

Its not just me who doesn't know how it will pan out. Nobody does. That doesn't make me optimistic or pessimistic. I guess I am fortunate to find myself in a position where I could gain in some way from either rising or falling prices.

But the one thing that does worry me is that it seems unlikely we will get a crash without large scale job losses coming first (hence lots of forced sellers). That seems to have been the case with previous crashes (but I am no expert). That would be very miserable and life-destroying all-round. Me, personally, I'd rather have reasonable house price growth and good levels of employment.

I can't find the sources at the moment, but I have heard quite a few interviews with experts saying that any shapr drops will be focused on new-build city-centre flats / apartments. So it may be that 'headline figures' show some drops, but that the majority of family homes in good areas hold value or even rise (as they seem to be doing where I live).

During the last crash, half of total price falls had occured before unempoyment went north. In Ireland and the US - both of which have already double digit falls - unemployment remains steady.

House prices rises ahead of earnings are unsustainable and a symtom of economic failure. It's this economic failure in the form of excess borrowing, excess debt, energy and food inflation, currency devaluation and credit tightening that will trigger unemployment.

Even if house price falls did directly affect employment levels, it would just go to prove that the economy is more f*cked up than you could ever imagine and will go pete tong anyway. Personally, I'm willing to go through a period unemployment if it means a brighter future afterwards. Why should I care about others when nobody gave a damn about my plight when all was supposedly good?

guidarufino

This whole topic is hugely interesting to me as I am currently in the process of selling my house and buying another one with my OH. I totally agree that the housing market is slowing down hugely and prices will quite probably fall, though not uniformly across the country. It seems clear that prices are more over inflated in some areas of the country than others and it seems to me that these are the areas likely to suffer the most from any potential dowturn.

I must say though that I think talk of a massive housing crash are completely ludicrous and exaggerated, as are reports of a recession. I think these stories are fuelled to a large extent by our ever hysterical British media who love this kind of story as it's the sort of story that sells newspapers. I also think the British public secretly love this sort of doom and gloom, in the same way they secretly love floods and other disasters as it gives us something to tut and fuss about.

Clearly house price growth over the past 10 years or so was unsustainable in the long term and sooner or later it had to stop. I have little sympathy for people who took out 125% mortgages and invested in property in the deluded belief that houses always increase in value. I think the government should have stepped in earlier and stopped these sorts of practices. Having said that however, having a deregulated financial market has been one of the secrets of the UK's economic success over the past 10 or 20 years so it's perhaps not as simple as that.

What I can say for definite is tell you about my personal experience. I bought my house 5 years ago when things were pretty crazy. I offered the asking price on the same day I saw the house for the first time, things were that nuts! 5 years on I have made approx 42% and am now moving to a larger home with my OH. I received 2 offers for the full asking price just 2 weeks after putting it on the market but my house is definitley a first time buyer house at the lower end of the market so houses like these are selling like hot cakes and are the exception to the rule I think.

The same cannot be said for higher end properties. The house we are now buying is significantly larger and it looks like we'll be paying £8k under the asking price for it and that we have been the only people to show any interest in it. Having spoken to the valuer today, our new house may well lose value in the short term but in the long term I am confident prices will recover, though I think the days of people making 200% on their properties are gone for good. And unlike many people, we are buying a home, not an investment so as long as we don't end up in negative equity, I don't mind. But he also said that he has seen concrete evidence of houses selling now for less than they were bought for 1 year ago.

Sorry to have gone on so long, it becomes an obsession when you're right in the thick of it! :rotfl:

Turnbull2000

guidarufino wrote: »

I must say though that I think talk of a massive housing crash are completely ludicrous and exaggerated, as are reports of a recession. I think these stories are fuelled to a large extent by our ever hysterical British media who love this kind of story as it's the sort of story that sells newspapers. I also think the British public secretly love this sort of doom and gloom, in the same way they secretly love floods and other disasters as it gives us something to tut and fuss about.

Check out the BBC Your Say page - typically a reasonable indicator of current public sentiment. The most populalar view is that a drop in prices is a good thing.

Associating price drops with "doom and gloom" is the real scaremongering, and it's now sounding quite tiresome.

WTF?_2

pickledpink wrote: »

You're right - we all want to prosper and do well. But when someone comes on here (as CarolT does) and openly gloats about people's homes losing thousands of pounds - in the hope SHE can benefit I think it's disgusting and hypocritical!

She possibly isn't a parent but there are many people out there at this moment who are in real danger of losing their homes; and possibly their marriages due to stress! Does it make her feel good to think a family may end up separated and in dreadful debt (possible ill health) while she's smacking her lips together and gloating cos SHE can get ger grubby vulture hands on a cheaper property?!

Wow - the same person who only a few weeks back was gloating that she had made hundreds of thousands of quid of equity and baiting others for 'not being able to afford to get on the ladder' is now suddenly shedding crocodile tears for people 'in real danger of losing their homes' :rolleyes:

Quite apart from the obvious hypocrisy and those crocodile tears, PP has as usual missed the substantive point that anyone now facing losing their home as a result of falling prices finds themselves in this position because prices were unrealistically high due to house price inflation, forcing them to borrow more than they could afford to repay.

It's the very House Price Bubble that PP is cheering that is now causing the misery. And the credit crunch which is the main instrument of downward prices was itself caused by the bubble in lending/house prices in the US.


As for the rest of your invective-filled post, Pickledpink, it is down to your usual low standards of baiting, vilifying, childish name calling and downright nastiness.

Shouting and being nasty is no substitute for being able to present a reasoned, intelligent and civil debate.