House Price Crash Discussion Thread

dolce_vita

pickledpink wrote: »

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!

And taking advantage of house price falls.

Turnbull2000

pickledpink wrote: »

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!

You're sounding like a wind-up merchant pickledpink.

The cost of upsizing is eased through earnings growth, not house price growth. Lets roll back 4 years from the perspective of a FTB;

Bought 2002, 2 bed flat valued at 60K. 3-bed terrace, the next rung up, costs 100K - 40K difference

Mid 2004 - 2 bed flat valued at 90K, 3-bed terrace costs 150K - 60K difference.

Want to sell 2007, 2 bed flat valued at 120K, 3-bed terrace costs 200K. 80K difference.

Hey presto, the 60K paper "profit" on their flat has actually resulted in an additional 40K of borrowing to upsize.

pickledpink

Mohthom,

You can't possibly liken property prices and demand to that of furniture! :rotfl: You may be able to mass produce cheap furniture in a Chinese factory - but you can't build a UK property in one!

Demand will always oustrip supply as far as the property market is concerned (as many on this forum well know) and that alone will keep prices buoyant. We have a severe housing shortage, and what with the influx of immigrants it looks set to worsen.

Property prices in the UK will always be one of the best investments anyone can make; I take it that's why you want to cash in on the benefits too.

dolce_vita

If house prices had continued to rise as they have been doing then someone struggling to buy a 1-bed flat now could never ever hope of being able to eventually buy a 4 bed detached without a significant change of circumstances.

Bring on the crash.

Cheap houses are good news for everyone.

mystic_trev

Turnbull2000 wrote: »

You're sounding like a wind-up merchant pickledpink.

pickledpink is dreambreaker's new logon - ignore!

beingjdc

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.

But when people earning the average wage can't afford the average house (and indeed across much of the country when people earning double the average wage can barely afford the bottom of the range ex-council flat) there's something weird going on.

Something weird and, by definition, unsustainable.

Generali

beingjdc wrote: »

But when people earning the average wage can't afford the average house (and indeed across much of the country when people earning double the average wage can barely afford the bottom of the range ex-council flat) there's something weird going on.

Something weird and, by definition, unsustainable.

Prices are set at the margin, not by the average. Whether the average wage earner can afford the average house is neither here nor there.

Houses are still overpriced though.

m00m00

prices may be set at the margins, but it's bad situation where people on the average local wages cannot pay the lowest property prices, without some exotic mortgage voodoo income multiplier for two full time workers, in many parts of this country. This to me is simply unsustainable if we have any kind of belief in a society.

jfinnie

An alternative view to a house price crash (and one I haven't seen discussed much) is that we end up going the way of many European and Far Eastern cities where renting is the way most people manage to have a home - I'm not talking about 6 months rentals but situations where people rent a home more or less from life from a landlord.

I have Asian friends who only manage to afford to own a home in their own local market because they either inherit property or have lived abroad and returned home with reasonable amounts of equity to put down large deposits.

I know that isn't a situation many people would want to see - though we do seem very concerned in this country about owning our own home.

Generali

m00m00 wrote: »

prices may be set at the margins, but it's bad situation where people on the average local wages cannot pay the lowest property prices, without some exotic mortgage voodoo income multiplier for two full time workers, in many parts of this country. This to me is simply unsustainable if we have any kind of belief in a society.

That is true but a very different thing to the average earner should be able to afford the averagely priced house in an area.

The current situation is unsustainable regardless of one's views on society. The fact is that just about the only people buying houses are speculators - people buying on the basis that the price will increase, not because of the income they could derrive from the property. In the end, that must be unsustainable as prices can't rise rapidly indefinitely.