Will prices go up or down?

Crashy_Time

blue_max_3 said:

Crashy_Time said:

They have been trying to create inflation for 12 years, high inflation is bad for those with large mortgage debts, especially when interest rates start rising.

I'm not sure that is entirely true. If inflation runs higher, the real value of the debt reduces. For example, if you owe someone £100 now and return it to them after ten years at 0%, it would be worth the same. Whereas if there was inflation, it would be worth less.
That is why the government like to have a target of 2%. It means their borrowing becomes worth less.
Obviously, if you can't pay the mortgage, that is another matter altogether.

The debt gets harder to service (remember people have over-borrowed due to low rates) as other basic things get more expensive and interest rates possibly rise, the unknown would be wage rises, would they kick in at a certain level or not at all?

royalmike

It's the supply of ever increasing debt that has driven rising house prices not demand this is coming to an end, house prices will fall, and i'm buying at the moment  

ProDave

My predictions:

A LOT of people are working from home now and many want to continue and have no desire to return to commuting.

So prices in big cities will fall as fewer need / want to be there.

Flats or houses without gardens will fall. anyone locked down for 3 months with no outdoor space will want to change that situation.

Rural / suburban properties with gardens will become more popular so less likely to fall in value.

A lot of people will be unemployed.  Many older ones will take this a a cue to retire a bit early freeing them from the need to live close to centres of employment so may boost the demand for more rural retirement properties.

Landlords will have been hit by tenants unable to pay rent and unlike normal employed and self employed people will have had NO help from the government,  A lot of landlords will be looking to quit the business so there will be a glut of typical rental properties for sale and a shortage of properties to rent.

royalmike

Mickey666 said:

royalmike said:

It's the supply of ever increasing debt that has driven rising house prices not demand this is coming to an end, house prices will fall, and i'm buying at the moment  

I don't understand.  Why are you buying now if you believe house prices are going to fall?

Well circumstances and it's a Home not an investment, cash buyer as well which helps.

Getting_greyer

MMT coming to rescue an economy near you soon.

motherofcats

Some houses in my area have already been reduced in price, but this is more because that particular estate agent always puts them on for "offers in excess of" and seems to price them quite high anyway for the area. Before lockdown people were paying those prices, now not so much.
I am in the process of buying. The house I am buying is around the £120k mark and is to be my long term home so I am not too bothered if house prices fall a bit. I doubt they will crash though. I plan to make overpayments on my mortgage and make updates/ changes to the property which will add value so I am not worried.

cymruchris

Mickey666 said:

Is the OP article from Private Eye?  

Well spotted @Mickey666

flyd said:

In reply to the piece of satire posted above, I agree that, in the foreseeable future, house prices may indeed rise or fall.

onthemend88 said:

This is not a real article, surely?

@onthemend88 it's a real article from Private Eye who often take the mickey out of the Daily Fail. However it's still a pertinent question even though it's satire. There are wild opinions in both directions - and the odd voice saying everything will stay the same. I'm sure things will become clearer as we get through these next few months. I wasn't sure if people would spot the article as satirical, but I'm glad a few did. The whole topic is most certainly a useful debate though. It'll be good to come back and look at this thread in a years time. 

lisyloo

The most important thing to learn I think is that no one knows.
if we get a vaccine in spring that’s rolled out by summer then we could be back to normal-ish in 12 months however some things will have changed, for example some people will be now working from home forever (or at least not commuting regularly). This will have a big hit on cities but make other places more desiresble.
We may not get a vaccine or may be living with new viruses forever.
my expectation and hope would be normal-ish in 12 months but with some accelerated structural changes such as more WFH, fewer offices, possibly lower immigration, more online shopping hence fewer shops and shopping centres.
but of course I may be biased (like the prime minister) by needing to have a level of hope in order to be able to function :-)

the housing market functions at a very local level. For example if you live somewhere that rich people from London retire to, then that is still likely to continue. There are plenty of older people who are a long way along the road to having made their lifetimes wealth, so older people are not reliant on todays economy - its already in the bank. So places that are nice to retire will do better than places that rely on booming business e.g. the city.

so my answer is no-one knows and it depends where you live.

ProDave

I would not want to be a commercial landlord at the moment.

Perhaps converting all those soon to be redundant office blocks into flats might be a solution to the housing crisis, but will people want to live in them?

Crashy_Time

https://www.bbc.co.uk/news/business-53579428
Not convinced by the WFH forever idea TBH.