House Price Crash Discussion Thread

Generali

dolce_vita wrote: »

Should you believe the property doom stories?

DOOMWATCH.

Interesting piece. Especially when you consider that the biggest part of the pain of the US sub-prime mortgage losses (ceteris paribus - that is unless the politicians come good with their promises to bail people out) comes next year. That this is an election year makes a bail out a good bet. That the Republicans have the White House and the Democrats Congress makes sorting a deal tough.

ManAtHome

I suspect that's why we're seeing the "we'll take the duff stuff onto our books - psssst johnny foreigner, lend us a few quid" approach. The "CDO reprices r us" proposal seems to be falling apart as well - more than a bit of uncertainty about who's going to win the next (US) election I think and "The Crunch" is making it difficult/too expensive to support both sides this time round.

Zammo

otter1 wrote: »

Seems to me like you don't want anyone to buy anything anytime. There's no right or wrong time, provided you are looking for a home, not an investment.

This is such a crock of !!!!!!. Of course you're going to care if you're an FTB and your "home" is losing value month after month, far bigger and nicer houses are coming into what was your price range and your saddled with a monstrous mortgage leaving you perilously exposed to any IR rises.

Generali

Zammo wrote: »

This is such a crock of !!!!!!. Of course you're going to care if you're an FTB and your "home" is losing value month after month, far bigger and nicer houses are coming into what was your price range and your saddled with a monstrous mortgage leaving you perilously exposed to any IR rises.

Whilst what you say is undoubtedly true, trying to time the market is fraught with danger. It's virtually impossible to do correctly and unfortunately with housing it is almost impossible to drip feed the money into the market to overcome this risk like you would with an investment in shares or bonds.

Zammo

Generali wrote: »

Whilst what you say is undoubtedly true, trying to time the market is fraught with danger. It's virtually impossible to do correctly.

I agree to a certain extent, but when you're in the situation this country is in right now, where property is monstrously overvalued and prices are beginning to decline, it doesn't take too much in the way off common sense to steer well clear.

Generali

Zammo wrote: »

I agree to a certain extent, but when you're in the situation this country is in right now, where property is monstrously overvalued and prices are beginning to decline, it doesn't take too much in the way off common sense to steer well clear.

True but property prices have been overvalued for years and will probably remain so for at least another year, possibly 5 or 10 (depending on how things pan out).

Many people just wouldn't consider living in a property they didn't own if there's a choice. It is perfectly possible for someone to buy a place in the belief that the value of it will fall yet still be acting rationally.

pamaris

I'd buy a home knowing the value may fall if I could get something decent and appropriate for my money. The situation we are in is that we can afford to purchase a decent house in a ghetto slum, or to buy a 2 bed flat in our current (mediocre, middle of the road) area- which would not be appropriate for a family of 4.

If we could buy a decent 3 bed home in a clean, safe area and still afford to fund the rest of our modest life, I wouldn't care that much if the "value" of my home went up and down.

I don't see myself as trying to time the market; I am just waiting until our wages rise to match house prices, or house prices fall to match our wages. It would be foolish for us to just buy what we can, because we would be stuck in either an inappropriate home, or an unsafe area, for a long time.

nelly_2

For me... its not a case of will it fall/rise after I buy its to do with value for money at time of purchase.

Anything I buy, I want it at a fair price, but I dont see houses as being fairly priced so even though I can buy 'what I want', now, I wont untill I see them drop to a fair price

free4440273

Generali wrote: »

True but property prices have been overvalued for years and will probably remain so for at least another year, possibly 5 or 10 (depending on how things pan out).

Many people just wouldn't consider living in a property they didn't own if there's a choice. It is perfectly possible for someone to buy a place in the belief that the value of it will fall yet still be acting rationally.

Indeed, and one can - provided you have your wits about you - always 'add value' to a property.

Gorgeous_George

Generali wrote: »

True but property prices have been overvalued for years and will probably remain so for at least another year, possibly 5 or 10 (depending on how things pan out).

Many people just wouldn't consider living in a property they didn't own if there's a choice. It is perfectly possible for someone to buy a place in the belief that the value of it will fall yet still be acting rationally.

I think even the most optimistic amongst will not expect prices to do anything but fall, in real terms but , as you say, they could remain over-valued for many years.

I'm sure that 20 years ago prices would have been undervalued thanks to the Tories see-sawing of high interest rates.

Just as many people would prefer to own their own homes I'm sure that there are many who buy because of the lack of suitable rental properties. There will always be a mix of attitudes to home ownership. There will be diehard owners and diehard tenants whilst in the middle will be those who can be influenced either way. Some of these people will buy when they should be renting and some will rent when they should be buying. It can be so much cheaper to rent when one considers Stamp Duty, EA fees, solicitior fees, new carpets and decor etc. Of course, most of these costs can be negotiated or avoided altogether. If only our Government would do something about Stamp Duty.

Now, where's that turkey?



GG