House Price Crash Discussion Thread

tr3mor

HammersFan wrote: »

inflation, at worst, 3-4%. even the stockmarket is pretty solid.

:rotfl: :rotfl: :rotfl:

You believe Gordon's figures? Have you seen the price of petrol/milk/bread recently?

Inflation is only "low" because of our serfs in China making ever cheaper tat that we don't need.

DreamBreaker

Turnbull2000 wrote: »

"Doomongers". Yawn.

That's still no real solution. Tens of thousands of priced-out FTB cannot just magically relocate to cheaper estates or regions. The market as a whole is too overvalued to allow enough 80K properties. A relocation to a cheaper region will also likely result in lower earnings.

Of course it's likely that property prices will be higher in 20 years. And so will everything else.

We never said anything about re-locating, you are reading what you want to read. In my area I have friends and family and colleagues who want a first time home. They moan that they can't get one, but they want the best areas, they are not prepared to settle for an under par area in order to get their foot on the ladder, it simply does not fit with their image. They would never want to say "well at the moment I am living in such and such area" as they feel they would be looked down upon. Unfortunately this means that they continue to live with parents or rent from landlords in those plush city centre apartments just to keep up the pretentious image of having money and unfortunately not seeing the wider future and the damage it is having on their long term finances.

They still moan that property prices are too high and it is not fair that they can’t buy their first house like I did for £Xk anymore. Well, unfortunately they could have, except when I was busy saving a deposit they were busy spending, on car’s, on clothes, on nights out, on holiday’s on pretentious rental apartments, etc, etc. Getting themselves into debt which further perpetuates their struggle to get a mortgage. They made their decision years back and now they are complaining that they missed the boat and it is not their fault. In my area there are houses they could buy if they were willing to accept a dent to their Kudos in the short term in order to benefit in the long term.

I do not understand your statement, "Of course it's likely that property prices will be higher in 20 years. And so will everything else." If you understand that then what harm does it do to a buyer buying a property as a family home for the long term? In the short term, if you are right, and there is a correction to the market it does not really matter if prices go down, it may mean they can't move on as quickly as they wanted to, but hey they are still paying off that mortgage and not throwing dead money at a landlord! AND as markets usually do it WILL pick up. I agree it does make a difference if you are buying as a short term investment, but property has never really been part of a short term investment strategy (only in recent years when I admit many people hit lucky with a quickly rising market), most investor's go into property for the long term, and yes they thinking of supporting the UK's economical future by providing for their pension with investments, something many people should be thinking about but aren't!!!! Surely that is not wrong?

DreamBreaker

izzysearch wrote: »

Property prices going down!

I think this is just temporary. It still doesnt help first time buyers. I mean for example the prices in some london areas have never gone down and it is still difficult to buy.

Danish
www.izzysearch.com

London is a market in it's own right, not really comparable to the rest of the UK, prices there are ridiculously inflated and always wil be unless the government ecourages businesses to move to other parts of the country. I always wonder why this does not happen?

neverdespairgirl

Turnbull2000 wrote: »

You also make the same naive assumption as DreamBreaker - that those not buying are doing so through choice.

SOme of us are not buying through choice, though.

My boyfriend and I could afford to buy a place, with a mortgage, but firstly we can rent a similar place for less money, and secondly we think house prices in central London, where we live, are more likely to fall than rise.

So we are renting for 75% of what we'd pay on an interest-only mortgage, and saving, and getting interest on our deposit as well.

neverdespairgirl

DreamBreaker wrote: »

In the short term, if you are right, and there is a correction to the market it does not really matter if prices go down, it may mean they can't move on as quickly as they wanted to, but hey they are still paying off that mortgage and not throwing dead money at a landlord! AND as markets usually do it WILL pick up.

Renting is not necessarily throwing dead money at a landlord.

Where we live, in central London, our rent is 75% of what the interest-only would be on a mortgage. A mortgage would be dead money, not renting!

DreamBreaker

neverdespairgirl wrote: »

Renting is not necessarily throwing dead money at a landlord.

Where we live, in central London, our rent is 75% of what the interest-only would be on a mortgage. A mortgage would be dead money, not renting!

I will say once more, London is not comparable to the rest of the country and it does sound like you have made the right decison to rent there. It is unusual to find the same case elsewhere in the country though!

I would still argue that even though the rent you are paying is by the sounds of it your most sensible option, it is still "dead money". To explain, it is not buying you more than a roof over your head for one month, just as renting a car only buy's you a car to get you from A-B and has to be returned to it's owner in the end, with you getting nothing!

Pobby

Turnball2000.Thanks for the data.Very interesting.So to my calculations,the inflation adjusted figures show that up to Q1 2001 house prices were,on average,around 80k by todays standard.So Q3 2007 they are 184.1k.Hmmm,drawing my own conclusion on which way the wind will blow in the future!

Turnbull2000

What you repeatedly fail to appreciate DreamBreaker is that buying is either out of reach completely or would require dangerous levels of borrowing. The figures in that chart speak for themselves.

With salary inflation remaining very low, servicing the mortgage would require two full-time working couples far beyond the traditional first few years of difficulty. With the cost of living continuing to rise and earnings going nowhere, buying now is asking for trouble unless you can survive on one salary - which most can't.

secondtoughest

It's going to be interesting to see what happens in the near future. While certainly a lot of people have made money on property, there are a lot who were either born at the wrong time, had the wrong set of circumstances or just plain and simple cannot afford to get on the ladder.

Aside from recieving parental money or earning a hell of a lot, how is this going to improve in the near future? The amount of people going to university still remains high (and part of the reason unemployment levels are very low), students getting into debt at the implicit promise of earning good money when they graduate. The average age of a FTB is going up. This indicates to me that people are having to wait until they earn more money or save before they can actually buy. Of course there's a bit of a 'want it all now' mentality in this country but if people have to wait too long they will get demotivated. Progressive people are happy people..

The mere fact that there are Government 'part buy' schemes is indicative of the scale of the problem. Basically making money out of homeowners with the 'rent' that they charge on their portion. A scandalous situation from a Labour government.

Turnbull2000

Money Week aren't holding back are they :eek:

Most people are still in denial about the UK property market. But prices are set to crash - and that could drag the economy into recession.In the latest issue of MoneyWeek, James Ferguson explains why it's time to brace yourself - plus the best stocks to buy in a recession.

And here's a very interesting post on HPC by Extradry Martini. Found it linked via Fool.co.uk. Seems he's also a regular on the FT forums. Enjoy...

Housepricecrash.co.uk - What This Central Plan Means