House Price Crash Discussion Thread

Chris2685

Both arguments are valid, if you're not bothered about saving a few grand (or a lot of grands depending how much you're spending) then why not buy now. However, I agree with John and don't see the point in spending 200k now, when I could spend 150k in 2 years or buy a nicer place for that 200k. It's all swings and round-a-bouts really.

newbuyer_3

I also can see both sides of the argument, and am certainly not trying to convince people to buy now!

It depends on your situation, and buying now suited me. We have been looking for years and never found anywhere quite right for us.

The house we have bought is a 3 bed detached with garage, decent sized garden and an amazing view at the back. There was a lot of interest in the property, and we fell in love with it when we viewed it. It is also a 'one off' which again makes us not want to miss out by waiting to perhaps save some money.

We also live in the North which has lower average house prices in general and is less affected by price crashes than the South.

As I have said before, I just wanted to let sellers and other buyers know that people are still wanting to buy.

harryhound

'one off' ?
What is wrong with the other half of the semi?

Seriously, joking apart, I do know what you mean.

For young couples in a reasonably secure job, double income and vision.
Especially those who can see potential, the next few years are the time to jump, especially if they want to do a cross between Sarah Beenie & Grand Designs:
Planning dept. twiddling thumbs, new permitted development rights, building workers desperate for a bit of cash, falling interest rates, CHEEP wrecks and development sites from bankrupt developers..................
Fancy living on site in a caravan?

Turnbull2000

Turnbull2000 wrote: »

Originally Posted by Turnbull2000
Following a valuation of 190K last year, my sister will be selling up shortly following divorce. It's a very tastefully decorated 3 bed terrace near the sea front of Whitley Bay. I reckon the EA will go for 175K.


Well, the valuations were done today by two EAs.

EA 1: 200K

EA 2: 220K

After six months on the market at 205K, today she had an offer - 185K. She surpisingly knocked it back, but they came back within the hour at 190K :cool:


That's pretty good going in today's market, particularly as it was valued at 185K last summer.

pickledpink

newbuyer wrote: »

Hi John, thanks for the friendly welcome.

I have lived with parents for the past 5 years (as has my partner) and we have managed to save a large deposit.

Although the house cost £150,000, the survey revealed some problems so the sellers gave us a cash allowance on completion of £10,000.

This meant the house cost £140,000, and I paid a £35,000 deposit. The mortgage is therefore £105,000.

My job is in a secure sector, and I am confident I will not lose any income.

When you 'rent the money' as you put it, following the first 7 or so years at least you begin to pay off more than the interest, and eventually own your property (which as I said will inevitably increase in value again at some point).
You could rent for 25 years, have paid £150,000 and not own anything at the end.
Also, mortage rates may be high at the moment, but again this may change in the future. I personally felt I would rather be in my own home, paying towards owning it than renting.
I do see the value of renting if you are doing it for the shot-term purely to make a financial gain from the current housing market, but I would prefer to be settled than have to consider moving again. I want to make my house my home, not look to make a profit.

I also had no problems getting a mortgage.

I just wanted to let people who are worried about selling know that there are still people like me who want to buy, and don't expect ridiculous discounts.

Hi,

Re your quote:

"When you 'rent the money' as you put it, following the first 7 or so years at least you begin to pay off more than the interest, and eventually own your property (which as I said will inevitably increase in value again at some point).
You could rent for 25 years, have paid £150,000 and not own anything at the end."

That's very true what you say, but you've forgotten a couple of things. Namely:

1) The rent on a 3-bed semi, even in the present climate would be
more than £500 a month.

2) Rents increase over the years, and when you take inflation
into account, a £500 a month rent now would cost at least
4 times that in 25 years time! So, the person paying rent for the
same type of house you are buying will end up coughing up
maybe 4 times as much as you.

3) At the end of the 25 years the renter will have NOTHING to
show for all that money. They'll still be paying rent (which
will have increased with inflation) while your mortgage
repayments will be peanuts in comparison to their rent!

4) Property ALWAYS rises in value eventually - despite the dips
and crashes which happen every decade or so. In 25 years
time your property will be worth probably 5 times what it's
worth now.

So in effect, in 25 years you'll own a property possibly in the region of £600,000 and your mortgage repayments at the end of the term will be the equivelant of about £100 a month wile the renters will own nothing - and will be paying possibly £2,000 a month in rent!!:money:

John_Pierpoint

So in effect, in 25 years you'll own a property possibly in the region of £600,000 and your mortgage repayments at the end of the term will be the equivelant of about £100 a month wile the renters will own nothing - and will be paying possibly £2,000 a month in rent!!

I think you are saying that over 25 years governments will tend to allow inflation to devalue money?
&
Over 25 years population & prosperity in UK will increase and so bid up house prices, especially desirable ones (something that changes over time)?.

I agree with you on the first point, especially as G.Brown & G.Bush are throwing our money about like drunks in a brothel.

The second is more debatable, I am a pessimist and see population increasing faster than prosperity as we come up against the limits to growth. (In 40 years 9 out of 10 houses will need to be rebuilt or remodelled to meet the 80% carbon reduction undertaking and I cannot see the world creating 1,300,000 new well paid jobs per week).

However I am currently trying to value and sell a largely unmodified small detached Victorian house SW of London (if you are interested send me a PM ). How much of a bet do you want to bet me it will sell for more than its probate valuation?

John

PS You can move your money with you round the world but you cannot move your bricks.

newbuyer_3

harryhound wrote: »

'one off' ?
What is wrong with the other half of the semi?

Seriously, joking apart, I do know what you mean.

My house is a detached, so maybe I'm just stressed with the move but I don't get the joke, sorry :undecided. I think the appearance and views offered by a property along with a desirable location do add to the desirability, and therefore contribute to maintaining value in a depreciating market.

Turnbull2000: Hopefully the fact that your sisters house sold for a good price in Whitley Bay will mean that house prices in the North aren't as effected by the 'crash' as we are being led to believe.

Pickled pink: The numbers I used were just supposed to be an indication, assuming no inflation. So I was comparing the money today with money in the future at the same value. As house prices rise (over time before I get quoted and contradicted!), and so does inflation (which is why it's called inflation :rolleyes: ), I don't think the comparison was too unreasonable. Naive maybe, but when I consider all the economic factors involved it becomes too complicated!

(sorry, I don't know how to quote more than one post!)

pickledpink

John_Pierpoint wrote: »

So in effect, in 25 years you'll own a property possibly in the region of £600,000 and your mortgage repayments at the end of the term will be the equivelant of about £100 a month wile the renters will own nothing - and will be paying possibly £2,000 a month in rent!!

I think you are saying that over 25 years governments will tend to allow inflation to devalue money?
&
Over 25 years population & prosperity in UK will increase and so bid up house prices, especially desirable ones (something that changes over time)?.

I agree with you on the first point, especially as G.Brown & G.Bush are throwing our money about like drunks in a brothel.

The second is more debatable, I am a pessimist and see population increasing faster than prosperity as we come up against the limits to growth. (In 40 years 9 out of 10 houses will need to be rebuilt or remodelled to meet the 80% carbon reduction undertaking and I cannot see the world creating 1,300,000 new well paid jobs per week).

However I am currently trying to value and sell a largely unmodified small detached Victorian house SW of London (if you are interested send me a PM ). How much of a bet do you want to bet me it will sell for more than its probate valuation?

John

PS You can move your money with you round the world but you cannot move your bricks.

JP

Take a look back to 25 years' ago. Look at what houses cost then. Look at what was the average wage.

Back then a person taking out a mortgage on, say, a £50,000 house would have been paying a couple of hundred pounds a month - which was a lot of money then!! Now, in the present day, that £200 a month repayment is peanuts - and that same house is probably worth half a million!!

EVERYTHING goes up in price with time. Everything (except electrical goods:j )

Turnbull2000

newbuyer wrote: »

Turnbull2000: Hopefully the fact that your sisters house sold for a good price in Whitley Bay will mean that house prices in the North aren't as effected by the 'crash' as we are being led to believe.

North Tyneside estate agents are still closing due to lack of sales, the buyers were quite desperate to move into this particular area, and the interior has been furnished to an exceptional standard. But yeah, I was still surprised she achieved that price.

However, a 5-bed detached with direct sea views in highly desirable Tynemouth took nearly a year and a £100,000 price cut to sell. I'd imagine the price achieved was even lower.

My sister is now looking to move to Tynemouth herself. She's had an offer of £137,000 accepted on a nice terraced two bed-flat that the seller paid £145,000 for 12 months ago. Not much of a reduction, but she got such a good price on her Whitley Bay it doesn't matter so much.

As for sentiment around here, it's changed... drastically. My collegues who viewed the idea of a house price crash as some sort of sick joke just 12 months ago, now acknowledge that prices are hugely overvalued and looking for 20% under asking price is fair game.

rob.be

just to put my 2p worth in. Im a service engineer and visit lots of estate agents in London and the South East. I have seen a big reduction in the number of sales staff in branches but no closuers yet. The market seems to be slowly ticking over as some people will always need to move. What I am seeing is that in some of the more drawn out sales leading up to exchange the buyer is frequently asking for a price drop before they will complete.
As for price drops it seems very localised, in one part of south London they have knocked £100k of 3 bed propties in a year and flats are going for under £100k for the first time in 5 years. One problem causing this is some buy to let landlords are having a rough time and looking to get rid of some flats, actually causing too many to be on the market.
Yet where I live they are redeveloping the town and it is becoming are more desireable place to live. Brought a small 3 bed house in Dec 05 for £155k, now worth £175, although they were going for £200k around a year ago.
The consensus amonng agents I speak to is things will bottom out in the new year and be pretty stagnant before a small recovery in the start of 2010. But who knows, a lot depends on interest rates. After a drawn out purchase im never moving again until I can retire to the sun when the mortgage is paid off!