House Price Crash Discussion Thread

budget_counsellor_shaz

t_i_g_e_rr wrote: »

...........
Anyway, here is a question I have been thinking about. If you were to buy a property now, how much of an allowance for a crash would you allow (based on current value) when making an offer (e.g. 5%, 10%)?

It depends how much you want a particular house..... but at the moment with the current market....you need to research carefully there are still some crazy asking prices out there!

Check recent house prices up to about 3 years then go in at an offer of about 15% below this and try not to pay more than 10% below. (If your brave enough:o )

You will also need to be prepared to walk away if they won't except your offer there maybe someone else with another house that will.

It is definately a buyers market at the moment:T

If you let your heart rule your head you may not save any money if there is a drop in house prices in the future.

If the prices rise you will still not be out of pocket:o

(this is only my opinion but I hope it helps)

Shaz

mr.broderick

t_i_g_e_rr wrote: »

I was interested in buying a house a few years ago and decided to wait until I was in a better financial position. There were threads like this one then. But house prices continued to rise.

This time feels different though. There seems now to be a few triggers that could force people (the banks mainly I think) to see sense. And when The Times has front page headlines about house prices twice in a month, this surely has to affect sentiment.

Anyway, here is a question I have been thinking about. If you were to buy a property now, how much of an allowance for a crash would you allow (based on current value) when making an offer (e.g. 5%, 10%)?

I think this post sums everything up.

Paragraph 1 refers to a chance you had to enter the market, you waited and on reflection its cost you dear.

Paragraph 2 refers to current sentiment which is definitely negative at the moment .

Paragraph 3 you say how much of an allowance for a crash would you allow, who says there is going to be a crash? Nobody knows, yet in your own mind you believe there will be one. Certain members on here i will refrain from naming them are constantly harping on about a correction/crash or whatever you want to call it, i do believe this is having an effect on other members on here who are in a position to buy at the moment but are not 100% sure about the whole thing which i find fascinating.I'm really enjoying mse this week.

benood

t_i_g_e_rr wrote: »

Anyway, here is a question I have been thinking about. If you were to buy a property now, how much of an allowance for a crash would you allow (based on current value) when making an offer (e.g. 5%, 10%)?

How about when the average house price falls to 4x the average wage - would that be a fall of about 50%?

If you don't want to be greedy you could factor in an uplift for population growth and buy after a drop of say 25%.

Of course you could just look at your investment as a home and buy when you can nearly afford it. You never feel like you can afford a house until having lived in it and paid the mortgage for 6 months in my experience, but then house prices haven't been falling while I've had a mortgage.

budget_counsellor_shaz

mr.broderick wrote: »

........ Certain members on here i will refrain from naming them are constantly harping on about a correction/crash or whatever you want to call it, i do believe this is having an effect on other members on here who are in a position to buy at the moment but are not 100% sure about the whole thing which i find fascinating.I'm really enjoying mse this week.

You are right of course;)

I don't know what to do for the best......but it is a buyers market at the moment.....I constantly have estate agents phoning me......... a change from the past when I've been chasing them:rotfl:

t_i_g_e_rr

mr.broderick wrote: »

Paragraph 1 refers to a chance you had to enter the market, you waited and on reflection its cost you dear.

I know what you mean. But I don't see it like this. I may have lost out financially, but I have not had the worry of a house I didn't need for the last few years. I personally value a lack of worry and a simple life far more than cash, especially in an uncertain market.

mr.broderick wrote: »

Paragraph 3 you say how much of an allowance for a crash would you allow, who says there is going to be a crash? Nobody knows, yet in your own mind you believe there will be one.

I honestly don't know if there will be a crash, but I do think sentiment is bad right now. The thing is, I still don't need a house, and with this in mind, if I the perfect house came up I have decided to factor in about 15%. If I really needed a house I think I would be less brave. I just wondered what other people thought.

mr.broderick

t_i_g_e_rr wrote: »

I know what you mean. But I don't see it like this. I may have lost out financially, but I have not had the worry of a house I didn't need for the last few years. I personally value a lack of worry and a simple life far more than cash, especially in an uncertain market.
I honestly don't know if there will be a crash, but I do think sentiment is bad right now. The thing is, I still don't need a house, and with this in mind, if I the perfect house came up I have decided to factor in about 15%. If I really needed a house I think I would be less brave. I just wondered what other people thought.

Other people, like you ,are clueless as to what will happen.

Doozergirl

It depends on what you're buying for. If you want a house for a home, you use a healthy deposit as a buffer which will hopefully enable you to move if you *needed* to.

You always look to get the best price you can on a property. You offer what you think it is worth. People won't take 15% less just because you want them to. And 15% of what? What you think think it's worth or their asking price?

If you get a property at below market value there is usually a reason. Fair enough you're looking at a repossession, but that doesn't at all guarantee a good price. You have to be resilient!

cheekeemonkey

mr.b is right....

we all have opinions but you have to go with what you think is right.

Personally, I believe that the market is more of a buyers market than ever before but cannot see a major correction in the prices across ALL properties.

At the lower end of the market there will always be the FTB demand albeit it is bl*&%y hard for them to get on the market but as we all know, if you want to get on the ladder you will find a way - it is just taking a lot longer to save the deposit and get themselves in the financial position to make the move.

For me having looked at specific houses over the last 6-10 months it is clear that those that are (over)priced to speculate in the market are still sat there. Those that are selling are those that are (a) priced sensibly in the first place or (b) reduced to the price they should have been in the first place!

When we put our house on the market we went with the EA who gave us the cheapest house price because in our opinion he was pricing the house to sell not sit on the market. To his credit we now have an offer on the house at only 3% below our asking price and within 4 weeks of going on the market! (Smaller house down the road over-priced has been on the market for over 6 months and allegedly no viewings!)

In any situation there will always be greedy sellers but as many say buy with your head not your heart and if it feels too pricey it probably is so walk away!

CM

t_i_g_e_rr

Yes, in my particular case the house I'm interested in right now is a repossession, which, in my (admittedly novice) opinion, is already 10% below average. So I think the only relevant question can be, how much below the average for the area, based on propertypriceadvice.co.uk, or maybe hometrack.

PS. The help, advice, and opinion on these forums is a real help to me. Thanks to all.

movilogo

Check recent house prices up to about 3 years then go in at an offer of about 15% below this and try not to pay more than 10% below.

I offered 10% below asking price on 3 houses last month (at Luton) and all my offers were rejected!