House Price Crash Discussion Thread

Dangerous_Hamster

Hi Guys & Gals,

I'm in the process of 'thinking' to buy a house after christmas but all this talk of house price crashes etc is scaring the be-jesus outta me !

I know that people cannot say that it is going to happen or that it isn't going to happen, but what I'm more afraid of is that some house prices are so over inflated that if it did happen people would be in a much worse situation than back in the 80's when it happened. I don't intend to be one of them.

I'm basically looking because I'm fed up of giving away my money as rent. The house prices of the terrace houses (which is what I'm more likely to buy) in the area I'm looking to buy seam to be fairly constant over the last few years. This years figures read

-11 Detatched
-3 Semi
+8 Terrace
+34 Flat

Now I know there was talk of a house price crash a while ago but the government / bank of england helped in this not happening. What I don't understand is how ? I read it was a mixture of the rental market and interest rates that kept them high, i have no idea how this worked though ?

Also there is talk about the EU bein involved soon because our house prices are so high. What effect is this going to have ?

Can anyone shed any light ?

Cheers
DH

tr3mor

Dangerous_Hamster wrote: »

I'm basically looking because I'm fed up of giving away my money as rent.

Compare what you pay in rent and what you'd be paying on a mortgage. And remember any interest you pay is giving money to the bank.

If I was you I'd hold off for the time being. Do your research, maybe have a look at a few houses and get some quotes. Use this to decide yourself whether it's worth it.

You're not going to lose out on anything by waiting and seeing what happens.

Dangerous_Hamster

Yeah I know what your saying but I'm also buying with a mate so my rent being 425 now and my mortgage likely to be around 500 isn't a great difference. My main worry is the price of the house in a few years time...

I'd also like to understand what the government / banks can do to hold off this house price crash so I know what to look for ?

beingjdc

Dangerous_Hamster wrote: »

I'd also like to understand what the government / banks can do to hold off this house price crash so I know what to look for ?

Hopefully nothing. Lower house prices would be good for the country - the Government have accepted this, that's why they're encouraging more house building and discouraging reckless lending by banks.

What the banks can do to prevent it is lend imprudent amounts of money at loss-leader interest rates. If we're lucky then the Northern Rock debacle will have scared some sense into them.

pamaris

Dangerous_Hamster wrote: »

Yeah I know what your saying but I'm also buying with a mate so my rent being 425 now and my mortgage likely to be around 500 isn't a great difference. My main worry is the price of the house in a few years time...

I'd also like to understand what the government / banks can do to hold off this house price crash so I know what to look for ?

The government/ banks have been trying to do all they can for the past 2 or 3 years to hold off this crash. I think there is a general consensus now that there is not much else they can do to put more air in the bubble; it's too late.

Don't buy with a friend in a falling market. You will want to move on in a few years for whatever reason and you don't want to be stuck.

Gorgeous_George

UK population to hit 75million according to the BBC (clicky) and even that could be an underestimate!

It's lucky prices are crashing because without the repo's we'd have nowhere to house them all.



GG

IveSeenTheLight

Gorgeous_George wrote: »

UK population to hit 75million according to the BBC (clicky) and even that could be an underestimate!

It's lucky prices are crashing because without the repo's we'd have nowhere to house them all.



GG

An increase of 15 million in 44 years.
Guess there's going to be a need for a lot more houses or a lot more people living with their parents
Mind you, there are loads of properties out there already, jsut waiting to be refurbished

If the government and local councils act now to release more land for houses and redevelop area to make best use of what is available already, then this will help control the house prices

ebonylight

chriseast wrote: »

Nothing personal intended at all, but it just shows how short people's memories are when someone who works in property doesn't understand negative equity. Houses - those are the things that always increase in value, aren't they?

Heh heh good point- but i work in plot sales - i am used to selling houses, rather than buying them. Working for big rich developers skews the ol' perspective

Dangerous_Hamster

beingjdc wrote: »

Hopefully nothing. Lower house prices would be good for the country - the Government have accepted this, that's why they're encouraging more house building and discouraging reckless lending by banks.

So what your saying there is that buying a house currently is suicidal as you will end up with negative equity ?

I must admit that I think house prices have reached such a level that getting onto the ladder for most is simply impossible meaning that the rental market is still going to be massive. If this is the case house prices will not drop ? or do I have the wrong end of a dirty stick ?

ebonylight

IveSeenTheLight wrote: »

You just bought in July and you are thinking about moving already

Your house price may go down, but if it does, then any property you are looking to move to would also likely to have dropped in price so it would not affect a move. You should check how portable your existing mortgage is.

It very likely that house prices will drop and then rise again (although I cannot predict timescales of when this will happen)

I don't know where you live, but 148,000 for a three bedroomed house seems quite reasonable compared to other areas.

Your house price may not be affected as much as others if a crash happens

Last july - as in 2006 - and our mortgage is fixed rate till July 2008 so we wanted to sell up before then anyway to get a new mortgage (not coz of any particular reason, i just thought if we have to change mortgage anyway we might as well buy a new house - female logic i guess)

I hope you lot are right and due to the crash we get a house we like for about the same as we sell this one - im just worried about us not getting back what we paid for this one

thanks people