House Price Crash Discussion Thread

dolce_vita

pickledpink wrote: »

........... You'll also still be paying the same mortgage repayments whatever the value of your property .......

Are you sure about this?

mystic_trev

pickledpink wrote: »

If you look over the last century there has always been property slumps about every 10 years or so - but it always picks up again. You can prove that by just looking at how much properties cost 5/10/20/30/40.......years' ago. In 10 years from now we will be looking back at the current prices and reminiscing how cheap they seem!

I think you've been hitting the sherry a bit early! This time it really is different, so different rules apply. In ten years time we'll probably be saying 'why haven't house prices gone up over the last ten years?'

pickledpink

Turnbull,

The reason I've mentioned profit is because that's primarily what this thread is about: the fluctuations in property! And history proves that property prices rise in the long run. If FTB's can at least get their foot on the first rung of the ladder, and make a healthy profit - they'll be able to trade up to something better.

Dolce Vita,

However much someone borrows to buy a property that price will remain, irrespective of property prices rising or falling. If they take out a fixed rate mortgage, then yes, their mortgage repayments will be the same. If they are on a variable rate mortgage, and given the rate that inflation increases annually - their wages will rise too; thus making their repayments of a similar percentage. We all know people who took out mortgages 10/20 years ago who have what now seems very small mortgages.

Mystic Trev,

I find it incredible that you believe property will actually be cheaper in 10 years time!:rotfl: I think it's you who have been hitting the sherry...........the port............and the cider!:D

gps_2

pickledpink wrote: »

Turnbull,

The reason I've mentioned profit is because that's primarily what this thread is about: the fluctuations in property! And history proves that property prices rise in the long run. If FTB's can at least get their foot on the first rung of the ladder, and make a healthy profit - they'll be able to trade up to something better.

Dolce Vita,

However much someone borrows to buy a property that price will remain, irrespective of property prices rising or falling. If they take out a fixed rate mortgage, then yes, their mortgage repayments will be the same. If they are on a variable rate mortgage, and given the rate that inflation increases annually - their wages will rise too; thus making their repayments of a similar percentage. We all know people who took out mortgages 10/20 years ago who have what now seems very small mortgages.

Mystic Trev,

I find it incredible that you believe property will actually be cheaper in 10 years time!:rotfl: I think it's you who have been hitting the sherry...........the port............and the cider!:D

some valid points, property is for the long term. however so long as people do not overborrow, which is the point at which a lot of people are at now. hard though to say how long this particular slump will last?

gallygirl

nightwatchman wrote: »

Thanks Jane

I have to admit that I am an angry man with the way the things are at the moment.
This Forum is not making me feel any better. There are all this people explaining why their equity is safe and all the others explaining that it may go down by 30% by the next five years. None of these scenarios are satisfactory for my family.
Hardly ever I and my wife have been unemployed.
Our wages are not bad compared to many others.
We have never overspend (my bank balance is relatively doing OK)
Our only fault was that we were financially broke between 98-02 as I was just finished my HND and she was struggling to get on her feet after getting out of an abusive family.
None of us had a wealthy parent to support us financially, however we always worked hard for our crust and given our circumstances I honestly believe that we did OK.
And yet it looks like in the future we will have to plead state help so as to have a roof over our heads.
I know that there are many others like me out there. Sooner or later many will have to beg from the state like me.
Frankly I feel that I have been condemned to serfdom.
If nothing changes I will not be surprised at all if the communist party re-emerge in ten years from now.

Sorry you feel all is hopeless nightwatchman. A few questions:

Are you on the council waiting list? Even if you wait 10 yrs you will get to the top of the list eventually - and further down the line would have the chance to buy it.

Are either of you classed as key workers?

Are there any shared ownership schemes available to you?

You are both earning v low wages - yet you have an HND. Are you using it? Any chance of promotion, progression etc? What about retraining?

Could either of you take on a second job to build up a bigger deposit?

Nil desperandum x

Turnbull2000

pickledpink wrote: »

Turnbull,

The reason I've mentioned profit is because that's primarily what this thread is about: the fluctuations in property! And history proves that property prices rise in the long run. If FTB's can at least get their foot on the first rung of the ladder, and make a healthy profit - they'll be able to trade up to something better.

Your assertion that FTBs locked out are primarily looking for a profit is pretty dubious.

Of course prices rise in the long term. And so does everything else, inc earnings. I'm sure my Saturday pint was cheaper 10 years ago...

If you wish to rely on history, then fluctuations always return to historical trends. Most FTBs can't get the a foot on the property "ladder", and even if they did, global economics have provided them with slower earnings growth and an ever increasing cost of living. They're in for a long wait if they wish to have children or trade up if they buy in today's market.

I still can't understand your emphasis on profit. The profit is only valid if they exit the market and rent, move abroad or move back with the parents. If they want to trade up as you suggest, then they've made a loss as the larger property has increased in value proportionally. It's really quite simple.

Telling them property is for the "long-term" isn't much use when prices are at a historical peak, earnings are increasing at a historical low and the mortgage will be like a noose around their neck for 15 years and having children is out of the question.

I find it incredible that you believe property will actually be cheaper in 10 years time!:rotfl:

Again, if you wish to rely on history - priced would likely be cheaper in 10 years time if they returned to normal levels. Didn't it take Japan some 15 years to recover?

Instead of being so dismissive, why don't you explain what and why prices will be in 10 years.

mohthom

Surely 'profit' is relative. A house that cost my parents £15k 20 years ago (2x ave. income) is now valued at £150k (5x ave. income).

A small house that costs £120k may increase in value by 10% over two years - but you can be sure that a £150k house will ALSO increase in value by 10% (all other factors being equal) - meaning that a £30k gap becomes £33k - rising faster than the rate of inflation so in real terms becoming more expensive.

As a soon-to-be-non-student (I'm just finishing a Masters degree) I don't have a hope in hell of getting a house at current prices. And - to be honest - I'm going to wait for all of the BTL landlords to sell up and increase supply to the market before I buy anything. It makes much more sense to me to pay another £6k rent this year while the house prices crash. I can't describe how much I'm looking forward to my landlord (multiple student house owner) getting into serious negative equity!

I'm sure that the answer to everyone's questions is not council houses (they are neither numerous, large or that great enough to live in. I'm also sure that the answer is not to build more apartments. I'm pretty sure rent is at it's limit - if it becomes any more expensive landlords are going to start having more and more empty houses. My fear is that if a lot of BTL landlords sell up there's going to be a much increased demand on rented accomodation - and as such rents will be able to be pushed up.

As far as the history argument goes, I find that utterly ridiculous. Furniture used to be very expensive - and very quickly it became cheaper when the market conditions changed (mass production became a reality). Contrary to historical precedent, prices came down . . . precedents only exist as an 'until now' guide, and are always able to be broken.

Capitalism can not continue at current levels indefinitely (unless we become able to inhabit other worlds . . . ) and at some point there has to be a realisation that efficiency is the answer to all problems and not wealth . . .

MohThoM

pickledpink

Nightwatchman,

I can understand you wanting to get on the property ladder - and feeling frustrated that you can't, but you come across as angry at those that have been able to do the very thing that you want to do.

With all due respect, we'd all like to buy a really nice place, but unless we earn the sort of money to fund that type of lifestyle we have to compromise. We can't get angry simply because other people have what we ourselves desire. Neither can we insist that prices should come down to suit our own pockets.

If one can't afford something - they can't afford it: simple as that. You either accept it, or look at ways to further your career/prospects so that you can. There's simply no point in being angry about something that you cannot change.

Whatever, I wish you all the best in your quest.

Turnbull2000

pickledpink wrote: »

Nightwatchman,

I can understand you wanting to get on the property ladder - and feeling frustrated that you can't, but you come across as angry at those that have been able to do the very thing that you want to do.

With all due respect, we'd all like to buy a really nice place, but unless we earn the sort of money to fund that type of lifestyle we have to compromise. We can't get angry simply because other people have what we ourselves desire. Neither can we insist that prices should come down to suit our own pockets.

If one can't afford something - they can't afford it: simple as that. You either accept it, or look at ways to further your career/prospects so that you can. There's simply no point in being angry about something that you cannot change.

Whatever, I wish you all the best in your quest.

I think Nightwatchman's point (which your patronising reply completely misses) is that he's being punished not for lack of effort or lack of earnings - but the date they were born.

pickledpink

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Quote:
Originally Posted by pickledpink
Turnbull,

The reason I've mentioned profit is because that's primarily what this thread is about: the fluctuations in property! And history proves that property prices rise in the long run. If FTB's can at least get their foot on the first rung of the ladder, and make a healthy profit - they'll be able to trade up to something better.

Of course prices rise in the long term. And so does everything else, inc earnings. I'm sure my Saturday pint was cheaper 10 years ago...

If you wish to rely on history, then fluctuations always return to historical trends. Most FTBs can't get the a foot on the property "ladder", and even if they did, global economics have provided them with slower earnings growth and an ever increasing cost of living. They're in for a long wait if they wish to have children or trade up if they buy in today's market.

I still can't understand your emphasis on profit. The profit is only valid if they exit the market and rent, move abroad or move back with the parents. If they want to trade up as you suggest, then they've made a loss as the larger property has increased in value proportionally. It's really quite simple.
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I'm glad you agree with me, Turnbull: yes, prices DO rise, and in 10 years from now EVERYTHING will be more expensive - inclusing property! Your pint of beer was indeed cheaper 10 years ago - and in 10 years from now it will be even more expensive - just as properties will be!

And how you can say people make a LOSS when trading up is beyond logic! How do you think people end up with a 4-bed detached when they only started out with a 1-bed flat?:rotfl: By buying and selling - at a PROFIT!





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