House Price Crash Discussion Thread

KS1977

Graham_Devon wrote: »

Putting aside the economic landscape at the moment and where it may or may not go, surely it's better to find a house you WANT, rather than making do with a house thats out there at the moment and available?

Yes you are right, thanks. I suppose if something comes up and it's what I like, I will know about it. Like you say, it seems daft just plumping for what is out there at the minute. If it's meant to be, then so be it. Thanks for your response

sabretoothtigger

Paying a little extra each month saves you thousands of pounds and years of mortgage payments

Quite right, thats the power of compounded returns.

rowanh

As no-one is sure if the house prices are going to crash further or not. I would be interested if this site does a poll of its viewers to see what the average thoughts are.

harryhound

Welcome to the "rough and tough" economics bit of MSE.
The site does "official" polls fairly regularly.
If you want to you can set up a poll of your own (not sure if this is still available to newbies).
Here is an unofficial example:
https://forums.moneysavingexpert.com/discussion/comment/32703651#Comment_32703651

IveSeenTheLight

tommyl_78 wrote: »

It's inevitable that house prices are about to take a hit. The supposed "crash" of late was a whimper.

The last correction was similar to that of the 90's i.e. 20%.
What makes you think that it was a whimper and that ir's inevitable that there will be a larger hit to justify it not being a whimper?

There's loads of discussion in this fowum which discusses supply, demand, net migration, population, lack of new properties being built, QE, BoE rates, inflation etc etc etc

dopester

tommyl_78 wrote: »

It's inevitable that house prices are about to take a hit. The supposed "crash" of late was a whimper.

It was just a minor tremor against values. Maybe a 3 for the UK.

On the Dopester-scale we've got a 10+er coming up. The build up of correcting pressures just can't be contained. In fact, those pressures have been hugely increased by warped policies to try and prevent it occurring.



7.0-7.9 Description: High
Impact: Can cause serious falls in value over large areas.

8.0-8.9 Description: Far-reaching
Impact: Can cause major value damage over several large areas.

9.0-9.9 Description: Outstanding.
Impact: Can cause devastating falls in value across many areas - including breaching Aberdeen's defences.

10.0+ Description: Extraordinary. Never recorded; Extremely rare
Impact: Epic / unknown - but one which some intelligent, handsome and rangey forecasters think is due to hit soon.

IveSeenTheLight

dopester wrote: »

On the Dopester-scale we've got a 10+er coming up.

See you still have your tin hat on

paul1964_2

IveSeenTheLight wrote: »

If the market falls and you have bought, there is a risk of negative equity (which can be worked on), however you still have a roof over your head and indeed it makes the jump up to the next level of the "ladder" so much easier.

We were in negative equity during the early 90's. I can assure you that being in such a position does not make make it easier to move up the property ladder. We had no ability to move anywhere until we had paid off enough to cancel out the negative equity.

One thing for sure is that while in short term prices can go up or down, in the long term house prices always rise (even simply to match inflation) and therefore you will find that servicing the fixed debt will become easier as the years pass.

This was the common assumption about share prices. The past decade or so has dispelled that as a myth.

Of course if you think in the next 18 months prices will be nominally lower than today, then you may be better off waiting (remember to calculate in rental costs during that time).

... and if they decide to buy, they should remember to include interest costs during that time.


Personally, I would rather be renting at the moment. The government has made it clear that we are entering a period of austerity. The BOE stimulus package cannot be maintained forever and interest rates can only really go up. Against such a backdrop, I can only see house prices falling over the next few years.

IveSeenTheLight

paul1964 wrote: »

We were in negative equity during the early 90's. I can assure you that being in such a position does not make make it easier to move up the property ladder. We had no ability to move anywhere until we had paid off enough to cancel out the negative equity.

Falling prices is an ascertation that some make in that the gap between the property you own and the potential property shortens.

Of course, if in negative equity, you have to alter that financial position.

the assumtion is of course for those not in negative equity

paul1964 wrote: »

... and if they decide to buy, they should remember to include interest costs during that time.

It's hard not to remember interest costs. You'll know what you are paying for the mortgage

paul1964 wrote: »

Personally, I would rather be renting at the moment. The government has made it clear that we are entering a period of austerity. The BOE stimulus package cannot be maintained forever and interest rates can only really go up. Against such a backdrop, I can only see house prices falling over the next few years.

If you had bought in the 90's, you would have thought you would be either very near completed your mortgage or indeed have a substantial equity in your property.

why then would you want to rent? Surely you'd be paying more

paul1964_2

IveSeenTheLight wrote: »

If you had bought in the 90's, you would have thought you would be either very near completed your mortgage or indeed have a substantial equity in your property.

why then would you want to rent? Surely you'd be paying more

My reasoning was based on the circumstances of the OP, who was a prospective FTB who saw his purchase as "quite a stretch". Sorry my clumsy English did not make that clear. If I was in the OP's situation, there is no way I would be taking such a risk in the current economic climate.

As for our own circumstances, we paid off our mortgage in 2004, but are currently short-term renting due to relocation. The interest from the proceeds of our house sale pretty much covers the rent. However, we are getting fed up with renting and may well buy next year regardless of the outlook for house prices.