House Price Crash Discussion Thread

Spartax

Thanks. I suppose if they didn't have to move with their jobs it would be better to sit it out? It just seems alien to me for anyone to step off the 'property ladder' so soon after struggling to get on it.

harryhound

I too am worried about how my children will see out this downturn/crash/ recession/depression. A lot depends on their source of income.
As a family, you might want to have a dispassionate discussion of the realities.

These were my thoughts 6 - 9 months ago, I've seen no news encouraging me to change them yet.

http://forums.moneysavingexpert.com/showthread.html?p=6282172#post6282172

Selling now could mean a very frustrating "Queue" experience.

Harry.

PS DD now has a lodger.

neverdespairgirl

Spartax wrote: »

Every instinct tells me that this is a bad idea and a high-risk strategy but I can't fault the logic. Can anyone help me argue against this?

If you can't fault their logic, why argue against it?

carolpinkdreamer

I think if she could sell now ( allowing for HIPS, EA and solicitor's fees etc) and still be in profit then it would be a great idea BUT she only has to look at these boards to see how difficult it is to get buyers through the door to even view houses (and then people on here are advising buyers to offer 25% below asking price!).
Everyone seems to have the same idea and are waiting for the the lowest dip of the 'crash' before buying.

I think she's probably missed the boat. It's a buyer's market.

WTF?_2

Spartax wrote: »

Thanks. I suppose if they didn't have to move with their jobs it would be better to sit it out? It just seems alien to me for anyone to step off the 'property ladder' so soon after struggling to get on it.

There's nothing magical about being on the 'property ladder'. All you need is sufficient cash to buy into property at any stage.

The whole idea of the ladder was that when prices are rising you buy in at a level you can afford, even if it's not your ideal house. After a while you build some equity in your current property and can use this to help you move up to the next one. It's more affordable to do this than to just try to wait and move straight to the 'better' (ie more expensive) property as prices can run away from you when you are saving. Meanwhile, the person who bought is at least seeing their equity increase.

However, if prices are falling then there's no point in being on the ladder. Better to save for as long as possible before you jump in.

Selling to rent is a perfectly legitimate strategy for moving up the housing chain. In principle it's no different to buying a starter home because it's cheap, as a step on the ladder. However if you are settled with a family you do have to consider the effects on them. Also you need to consider the actual costs of selling up and renting a place ... commission to agent, deposit for rental, paying removals company etc.


Obviously, timing is important here. If the market doesn't drop, you lose out. And if you wait until the market is definitely dropping you won't realise optimum gains because no-one wants to buy and you could be left hanging for months as prices drop even more.....

If you time it right and sell near the peak before the fall then you actually 'earn' lots of money from your house. As in banking it. You can then use this money to buy back into the market when it's lower and set to rise.


To be honest, anyone waiting to sell now has probably left it too late as people have sussed that the market is about to head south. But if someone has loads of equity in their place they can be bold and take a 'hit' on some of it and still bank tens of thousands of pounds from the rest of the equity as no doubt there will be some people out there of a bullish/ naive/ financially clueless disposition who think that 5-10% off current prices is a bargain opportunity to get themselves on the ladder.

John_Pierpoint

Strangely quiet on here today?
Are we all still digesting yesterday's evening TV:
19:30 BBC1 Watchdog - crook rips off people desperate to find a buyer.
20:00 ITV Flat Broke - worried single mum tries to sell her "investment" at auction.
20:30 BBC1 Feeling the Pinch - All the "essentials" seem to be going up.

Then this morning we have Surveyors: Biggest house price drop on record. and Gordon Brown offering the bankers more of our money.

WTF?_2

John_Pierpoint wrote: »

Strangely quiet on here today?
Are we all still digesting yesterday's evening TV:
19:30 BBC1 Watchdog - crook rips off people desperate to find a buyer.
20:00 ITV Flat Broke - worried single mum tries to sell her "investment" at auction.
20:30 BBC1 Feeling the Pinch - All the "essentials" seem to be going up.

Then this morning we have Surveyors: Biggest house price drop on record. and Gordon Brown offering the bankers more of our money.

Frankly, you'd have to be a complete moron to argue that there are any grounds for optimism in the near to medium term for the UK housing market.

Ignorance is no longer an excuse as the media has now well and truly jumped on the bandwagon ... about six months (at least) too late, but better late than never.

lil_me

Bit shocked yesterday, our house had an offer of £193k and £197k last October, house next door, same style detatched with huge garden which is much larger 4 bedroom (ours is 3) with larger living areas, larger kitchen and much larger bedrooms plus en suite, just been valued at £200k, wow! The same type of house in the same village was priced at £249k in October and sold for £245k.

Thali

Hi there,

let's assume it's now 2012 (oh no, the Olympic Games are this year ...).

House prices are down 30% from where there were at their peak, mid/ end 2006 - how many flats/ houses are actually now at the market?

I know quite a few people who want to sell their flats right before "The Games", but not sure if this is possible as they might well be (very much) in negative equity by now.

So, who is selling their houses: (new) property developer who got cheap land and are able to sell cheap flats, undercutting other developers? The government to their (ex)council tenants? People who managed to buy from a desperate buyer and (if not making a profit) are not making a loss, the councils building (or built) new developments in areas where The Games are held?

Who in their right mind would sell a property, realising a loss of 30%? Surely now one who is still able to pay back the mortgage ... and we might have a 3 or 4% interest rate again by now. If the key factors do not change - economy still goes relatively strong, low unemployment, etc., I am wondering, how long prices are going to be as low.

A lot of people might even have saved up the new required minimum deposit of 20% and are ready to go on the ladder - surly, if competition breaks out, as there are so few houses available, prices need to be picking up soon-ish again?

Guess what I'm saying is: GB must be or become a very undesirable, unattractive and doomed place to be for this to happen and as long as people coming to Peterbrough (picking an packing) and to London, Canary Wharf (well, also picking and packing), it don't really see prices down for very much longer (as I said earlier, it's 2012 now)

Thali

PS: sorry, this is actually a bit confusing

boinging_2

Thali wrote: »

Hi there,

House prices are down 30% from where there were at their peak, mid/ end 2006 - how many flats/ houses are actually now at the market?

Who in their right mind would sell a property, realising a loss of 30%? Surely now one who is still able to pay back the mortgage ... and we might have a 3 or 4% interest rate again by now. If the key factors do not change - economy still goes relatively strong, low unemployment, etc., I am wondering, how long prices are going to be as low.

If house prices are 30% down everyone trading up will be in a better position as they will get a bigger saving on the house they are moving to. Why wouldn't you move?