House Price Crash Discussion Thread

Lotus-eater

chrisandanne wrote: »

A bit of anecdotal..I just have to tell someone this..My husband bumped into an old friend (46 year old policeman) he said he would be glad to get out of the force at 50, OH said well you'll be o.k, house paid for etc..... 'you must be joking we owe £160k' he said :eek: This is a house bought 20 years ago, three bed semi for about £40k or so. How many more are in this position ?.

I was gobsmacked. A x

Funny you should say that, I ran into a guy in the same industry as me the other day. He has a pension from his old job and will retire in around 10 years. We were talking about the housing market and I remarked to him that he should be OK. he's lived there for absolutely years and I presumed he had paid off his mortgage by now.
But no, he's apparently borrowed on his mortgage to build an extension and new kitchen. In his words, he has quite a big mortgage.

dsypml

i082327 wrote: »

LisbonLaura wrote: »

Find the 1998 value because soon that will be the mark. It's called sanity...

Are you kidding me, you can't make sweeping statements like that, if i apply that to my current £110000 property that would make it about £25000 and I could get a mortgage to buy about 6 of them?

Madness

It's only a 62% fall to get back there in nominal terms.
http://www.fool.co.uk/news/property-home/2008/07/08/turning-back-the-property-clock.aspx

Have you seen a chart of the Japanese housing market for the last 20 years? Check out the Nikkei too. 1989: 39,000 2003: 8,000

If we get deflation then that's what we could be looking at here.

http://www.independent.ie/opinion/columnists/david-mcwilliams/japans-housing-slump-was-scary-and-ours-could-be-too-1425159.html

wellandpower

rozzy wrote: »

Whilst it is obvious that the house prices are falling, I think the so called "crash" wouldnt be half as bad if it wasnt in the media on a daily basis. With all the media coverage about falling house prices it is inevitable that people particulary FTB's will hold out in order to get a much cheaper property. The longer people hold out the lower the house prices will get.

Just look at the Northern Rock situation, that wouldnt have been no where near as bad without the Media Coverage. I think the same applies to a housing market crash, without the media sure things would get a bit tighter, prices would fluctuate according to supply and demand but surely we wouldnt be fearing a 50% fall in prices.

!!!!!!?!

You are if if if if if.

IF it hadn't been ramped in the first place, it would not have far to fall.
IF the banks hadn't loaned beyond sensible limits, it would not have far to fall.

Blah blah.

Its falling, probably 50% or just under in real terms, nominal if the ecconomy gets bad.

I have experienced this first hand today - the eccomomy holds things in store for so many people who will not know what is going to hit them until they lose their job.

mrs_deadline

Lotus-eater wrote: »

But no, he's apparently borrowed on his mortgage to build an extension and new kitchen. In his words, he has quite a big mortgage.

But presumably not the colossal mortgage he'd have if he'd traded up in the last few years...

We took the same decision to build an extension because moving was simply unaffordable. Had to add 30k to the mortgage but our moving costs alone would have been 12-15k and people's asking prices could only be described as highly aspirational.

skap7309

rozzy wrote: »

Just look at the Northern Rock situation, that wouldnt have been no where near as bad without the Media Coverage. I think the same applies to a housing market crash, without the media sure things would get a bit tighter, prices would fluctuate according to supply and demand but surely we wouldnt be fearing a 50% fall in prices.

IF the banks had not lent insanely large amounts of money the housing market would not have spiralled out of control, people would be able to afford houses and this 'mess' would never have happened.

Sorry but you mention fearing a 50% fall in prices? Hahahahaha, sorry, hahahaha..........ohhh deary me.

Try the words hoping to god for a 50% crash.

rozzy_2

skap7309 wrote: »

IF the banks had not lent insanely large amounts of money the housing market would not have spiralled out of control, people would be able to afford houses and this 'mess' would never have happened.

Sorry but you mention fearing a 50% fall in prices? Hahahahaha, sorry, hahahaha..........ohhh deary me.

Try the words hoping to god for a 50% crash.

I agree its down to the banks, they could have put a stop to it at any point by tightening lending criteria. Its also down to individuals who agreed to take out mortgages 6x their wages.

The point i was just trying to make is what drove these people to want to make such a commitment, I merely suggested that could it be down to the media stating what a good investment property is and how it will never go down in value. Just look at how many property programs are?

I was just suggesting without the media would there have been so many BTL'ers? I dont think so. People wanted to lend the max amount as possible to maximise future return, the banks just tried to cash in on this be having such a relaxed lending criteria and now its backfiring.

I understand banks set house prices its just my opinion that the media sets the speed in which they get there. I am probably wrong but hey we are all entitled to an opinion.

Why would i be hoping for 50% falls, please elaborate, if i have bought in the last fews years how could this work in my favour?

m00m00

it would work in your favour if you were looking to trade up at some point in the future

skap7309

rozzy wrote: »

Why would i be hoping for 50% falls, please elaborate, if i have bought in the last fews years how could this work in my favour?

As m00m00 suggests above but i had to correct you as you had the words WE were fearing a 50% house crash. Then it was changed to why would YOU be hoping in your following post. Not everyone wants sky high prices contrary to popular belief.

Funny that.......seems the media thinks so - just around the time you were blaming them for the crash......... :rolleyes:

Sorry i am not being picky its just while you are pointing the finger at the media you are doing just as they do.

jamescredmond

rozzy wrote: »

I agree its down to the banks, they could have put a stop to it at any point by tightening lending criteria. Its also down to individuals who agreed to take out mortgages 6x their wages.

The point i was just trying to make is what drove these people to want to make such a commitment, I merely suggested that could it be down to the media stating what a good investment property is and how it will never go down in value. Just look at how many property programs are?

I was just suggesting without the media would there have been so many BTL'ers? I dont think so. People wanted to lend the max amount as possible to maximise future return, the banks just tried to cash in on this be having such a relaxed lending criteria and now its backfiring.

I understand banks set house prices its just my opinion that the media sets the speed in which they get there. I am probably wrong but hey we are all entitled to an opinion.

Why would i be hoping for 50% falls, please elaborate, if i have bought in the last fews years how could this work in my favour?

there's no question that the media helped to fuel the boom - from the D.Mail through location, location to radio progs. and, of course, the internet.

we live in a shiny new multi-media world. news comes a lot faster and from all angles.

one thing that hasn't changed, though, is the media's insatiable appetite for the eye-catching headline - they've got a product to sell, after all.

leaving the question of advertising and its impact to one side, just how much influence the media has on HP's is simply an unanswerable question.

my guess is: they're 20% responsible. the other usual suspects make up the 80%.

if the only thing you can believe in a newspaper is the date, the guardian even managed to get that wrong in their sat. supplement a while ago!!!

as for a 50% drop: if you bought at the top, can keep up the repayments and don't fall out with your OH, you won't feel a thing.

moanymoany

The media did not create the sub-prime fiasco.

The media did not create Chinese and Indian demand.

The media did not create the Northern Rock fiasco.

The media did not create the global food crisis.

The media did not create imminant recession in Europe and the USA.

The media is reporting what is happening.