Finally seeing house prices drop?

Rosa_Damascena

This is such a depressing thread.

Things are getting tougher by the day, and we are on the precipice of war, even if it's not being declared officially (its only a matter of time before a no fly zone is declared). I still believe that prices will rise long term and don't see a reduction any time soon.

HotPantsCruiser

ProDave said:

So the OP thinks a house price crash is a good thing?

Has he ever lived through one?  Does he think it is a good idea?

You put your house on the market, and NOBODY comes to look at it, because nobody wants to buy when prices are falling, if they wait they will get it cheaper, and that becomes a self fulfilling prophesy because nobody buys prices continue falling.  Then people reach the point they can't afford to go lower so everyone just stays put instead.

With the present war in Ukraine, I would expect the market to slow considerably, people don't like uncertainty when buying a house so many will now be waiting to see what happens.  That will certainly slow sales, the same has happened before e.g. when we invaded Iraq in 2003, but prices did not actually fall then, just we had no viewings for 6 months until the direction of travel became clearer and people started buying again.

Doesn`t demand for property mean that people always need to buy because they always need somewhere to live?

HotPantsCruiser

SuseOrm said:

HotPantsCruiser said:

SuseOrm said:

HotPantsCruiser said:

SuseOrm said:

HotPantsCruiser said:

SuseOrm said:

HotPantsCruiser said:

MobileSaver said:

lookstraightahead said:

MobileSaver said:

Agreed, it will be harder for both, the difference being that every month that goes by the home-owner is still paying off their own mortgage while the renter is still paying off their landlord's mortgage.

people were using credit to pay their mortgages. Renting is probably cheaper in those circumstances. ... And then possibly losing 'your' (the lender's) house.

As @jimbog pointed out, renters will be hit with rising costs the same as home-owners are. Renters already pay more of their wages towards rent than home-owners pay towards their mortgage so it stands to reason that in fact renters are more likely to need to use credit cards to pay their monthly housing costs.

Even in the worst times the number of home-owners who lost their home was tiny. New policies and rules introduced in the last decade or so mean that the number who lose their home in the future will be even smaller.

Or they could apply for housing benefit, you can`t walk away from a large mortgage debt though, even if the market crashes.

I actually know with people who have their Intyre mortgage paid off for them by the equivalent of housing benefits for homeowners.  

I believe the scheme has changed now to mean that the government steps in and takes over the loan for the duration of unemployment which is repayable but it does keep people in their homes.  

Sure, but they have to pay it back at some point, you don`t pay back HB as far as I am aware? The number of people who have had their entire mortgage paid off as a deferred debt though will be miniscule compared to the amount of people getting their rent paid by HB.

Wrong back in the day it did not have to be paid back. 

Whether the numbers are in the renters favour or not in terms of who is getting what from the government is utterly irrelevant,  the facts are that you actually would be able to stay in your home for a lot longer with the government paying your mortgage than at the potential landlords whim because the housing benefit may not actually cover the full cost of your rent.  And you may not be able to make up the shortfall.  

It will have to be paid back now though, the government won`t be paying your mortgage now as we enter a potential economic crisis?

Yes it is repayable now,  but the point is, if someone looses their job they wont loose their house 

Not sure that anyone is claiming there is much risk of losing a house, just that prices could fall and someone who borrowed a lot could end up in NE or just regret borrowing too much.

In order for house prices to fall and people to end up in negative equity you would need re-possessions otherwise what you end up with is a Mexican stand-off where there’s just no houses for sale and the ones that are for sale have an ever increasing price.  

Not really, your house price can fall and you can be in NE with something simple like interest rate rises, repossessions don`t need to happen at all, and I don`t think there has ever been a time when there were "no houses for sale"?

SuseOrm

With respect you can’t be in negative equity if you haven’t sold your house,  if your house is not for sale,  it’s not on the market and therefore there is no valuation being carried out and therefore it is not worth less than you paid for because it’s quite simply not for sale.  

The only possible catalyst for house prices dropping is people being forced to sell their homes,  now I’m not saying that won’t be possible at all but I don’t think it will ever happen on mass as it has them previously due to the enormous amounts of props in the market.  Tbh we have this conversation every three months on this forum and nothing changes and in the three months house prices have always risen.  

ProDave

HotPantsCruiser said:

ProDave said:

So the OP thinks a house price crash is a good thing?

Has he ever lived through one?  Does he think it is a good idea?

You put your house on the market, and NOBODY comes to look at it, because nobody wants to buy when prices are falling, if they wait they will get it cheaper, and that becomes a self fulfilling prophesy because nobody buys prices continue falling.  Then people reach the point they can't afford to go lower so everyone just stays put instead.

With the present war in Ukraine, I would expect the market to slow considerably, people don't like uncertainty when buying a house so many will now be waiting to see what happens.  That will certainly slow sales, the same has happened before e.g. when we invaded Iraq in 2003, but prices did not actually fall then, just we had no viewings for 6 months until the direction of travel became clearer and people started buying again.

Doesn`t demand for property mean that people always need to buy because they always need somewhere to live?

I had a property that took 3 years to sell, and another that did not sell so is now let.  so not always no that is not the case.

housebuyer143

ProDave said:

HotPantsCruiser said:

ProDave said:

So the OP thinks a house price crash is a good thing?

Has he ever lived through one?  Does he think it is a good idea?

You put your house on the market, and NOBODY comes to look at it, because nobody wants to buy when prices are falling, if they wait they will get it cheaper, and that becomes a self fulfilling prophesy because nobody buys prices continue falling.  Then people reach the point they can't afford to go lower so everyone just stays put instead.

With the present war in Ukraine, I would expect the market to slow considerably, people don't like uncertainty when buying a house so many will now be waiting to see what happens.  That will certainly slow sales, the same has happened before e.g. when we invaded Iraq in 2003, but prices did not actually fall then, just we had no viewings for 6 months until the direction of travel became clearer and people started buying again.

Doesn`t demand for property mean that people always need to buy because they always need somewhere to live?

I had a property that took 3 years to sell, and another that did not sell so is now let.  so not always no that is not the case.

Every property sells at the right price. 

RelievedSheff

SuseOrm said:

With respect you can’t be in negative equity if you haven’t sold your house,  if your house is not for sale,  it’s not on the market and therefore there is no valuation being carried out and therefore it is not worth less than you paid for because it’s quite simply not for sale.  

The only possible catalyst for house prices dropping is people being forced to sell their homes,  now I’m not saying that won’t be possible at all but I don’t think it will ever happen on mass as it has them previously due to the enormous amounts of props in the market.  Tbh we have this conversation every three months on this forum and nothing changes and in the three months house prices have always risen.  

That's not strictly true. Our last house was in negative equity for a long time even though it wasn't for sale. It's value was, quite clearly given other sales in the area at the time, far less than the amount we owed to the mortgage company.

It didn't matter too us as we could afford to keep paying the mortgage so didn't need to sell it but that didn't change the fact it was worth less than we owed at the time. 

We are not naïve enough to think that house prices always go up having been caught in a falling market previously. Yes long term the trend is upwards but short term drops can catch people out, more so those who have only recently purchased their homes with small deposits and have perhaps taken on more debt, not just their mortgage, then they perhaps should have. 

ProDave

housebuyer143 said:

ProDave said:

HotPantsCruiser said:

ProDave said:

So the OP thinks a house price crash is a good thing?

Has he ever lived through one?  Does he think it is a good idea?

You put your house on the market, and NOBODY comes to look at it, because nobody wants to buy when prices are falling, if they wait they will get it cheaper, and that becomes a self fulfilling prophesy because nobody buys prices continue falling.  Then people reach the point they can't afford to go lower so everyone just stays put instead.

With the present war in Ukraine, I would expect the market to slow considerably, people don't like uncertainty when buying a house so many will now be waiting to see what happens.  That will certainly slow sales, the same has happened before e.g. when we invaded Iraq in 2003, but prices did not actually fall then, just we had no viewings for 6 months until the direction of travel became clearer and people started buying again.

Doesn`t demand for property mean that people always need to buy because they always need somewhere to live?

I had a property that took 3 years to sell, and another that did not sell so is now let.  so not always no that is not the case.

Every property sells at the right price. 

Every property sells at A price, but that is not always the right price.

My example.  I was selling my 5 bedroom house and self building a smaller 3 bedroom house. The 5 bed was valued at £300K but just did not sell even when reduced 10%.  The only way it would have sold in that market would be a drastic reduction, and then it would have sold for less than the build cost of the new house.

Would you PAY to downsize?  Would any of you PAY to downsize?

BikingBud

ProDave said:

housebuyer143 said:

ProDave said:

HotPantsCruiser said:

ProDave said:

So the OP thinks a house price crash is a good thing?

Has he ever lived through one?  Does he think it is a good idea?

You put your house on the market, and NOBODY comes to look at it, because nobody wants to buy when prices are falling, if they wait they will get it cheaper, and that becomes a self fulfilling prophesy because nobody buys prices continue falling.  Then people reach the point they can't afford to go lower so everyone just stays put instead.

With the present war in Ukraine, I would expect the market to slow considerably, people don't like uncertainty when buying a house so many will now be waiting to see what happens.  That will certainly slow sales, the same has happened before e.g. when we invaded Iraq in 2003, but prices did not actually fall then, just we had no viewings for 6 months until the direction of travel became clearer and people started buying again.

Doesn`t demand for property mean that people always need to buy because they always need somewhere to live?

I had a property that took 3 years to sell, and another that did not sell so is now let.  so not always no that is not the case.

Every property sells at the right price. 

Every property sells at A price, but that is not always the right price.

My example.  I was selling my 5 bedroom house and self building a smaller 3 bedroom house. The 5 bed was valued at £300K but just did not sell even when reduced 10%.  The only way it would have sold in that market would be a drastic reduction, and then it would have sold for less than the build cost of the new house.

Would you PAY to downsize?  Would any of you PAY to downsize?

It's not just the size that matters

Many other considerations influence any major life decision.

A quality of life move to a smaller well designed house, fewer bedrooms, better area, more garden etc after children have left home may cost you more.

BikingBud

Anyway there should be enough on here to persuade the mods that the debate house price board remains closed