'Will house prices crash in 2008?' Poll Results & Discussion

andikay

The housing market relies on people buying houses at the bottom end of the market; this was the job of the first time buyer. Over the past few years the first time buyers have been replaced buy investors, unlike first time buyer they will only buy if they can make money, as their investment stops gaining value they will want to sell, first time buyer will not come to their rescue because they can not afford property at current prices, so prices will have to fall. The supply and demand argument is not a sound argument because the demand is not from people wanting a place to live it is from people who think buying property will make them money. Housing can not continue upwards for ever. In Rotherham I have seen over the past 2 years the amount of properly for sale increase whilst there as been a degrease in the number of sales and prices are coming down. maltby driving school Rotherham

Ebenezer_Scrooge_2

The government has built a false economy over the past few years, and we are now seeing the signs of this in overinflated house prices and mortgages people are struggling to pay.

Davesnave

It amazes me that, at this point, 30% of responses are still for an increase or maintaining the status quo. Almost every pundit tuned into this subject over the past year or two has agreed that a readjustment is on the cards and that price growth over, say, the last 5 years is unsustainable. Looking at the situation in the USA, the credit crunch and the overall chance of global slowdown and it all looks like a no-brainer to me. The only open question is how low will it go?
People with kids in their 20s, or those priced out in the past few years won't be losing too much sleep if the main casualties are buy-to-letters, whose empires may be the first to collapse, or at least retract. However, it's beginning to look as if the fall out will be be a lot wider than that.
Ebeneezer above is right; an economy built on ever-escalating debt is ultimately doomed.

BLOO_LOO_2

Well, they may be hit, but thats what happens when you get panicked into buying because you will "miss out". Classic bubble mentaility Im afraid.

Martin himself has said many times, only buy if you can afford it. Even these guys, in negative equity, IF theyd followed this advice, would not fear a drop in the most expensive asset they are liekyl to buy

tryinhardtosavethepennies

BLOO_LOO wrote: »

Well, they may be hit, but thats what happens when you get panicked into buying because you will "miss out". Classic bubble mentaility Im afraid.

Martin himself has said many times, only buy if you can afford it. Even these guys, in negative equity, IF theyd followed this advice, would not fear a drop in the most expensive asset they are liekyl to buy

While that may be true, it doesn't help those who have found themselves in this position.

If I could go back to 2005 when we bought our first house, and were panicked into buying because our mortgage advisor said exactly that: "if you don't buy now, you may be priced out of the market", I probably wouldn't have bought. We took a mortgage based on 5x my OH's salary, more than 100% of the value of the house, interest only...an MSE nightmare! Then we borrowed more on top of that to do the place up. It was very, very stressful.

Having said that, we've been extremely happy in this home, have learned a lot from doing it up ourselves and now have a lovely house to live in. Unfortunately, we're now in the position where we're trying to sell it, and probably won't even get enough to cover the mortgage/additional borrowing.

Fortunately though, I qualify soon and get a nice pay rise which will allow us to borrow more sensibly this time round and afford a slightly bigger house in which we can "sit tight and ride out the storm"...should it come. I'm of the opinion, if we're going to get into negative equity, I'd rather be in a place that's big enough to put down roots and start a family - it'd be impossible in this tiny house.

I seem to have gone off track....?! It's a hard one to call - no one can predict the future, but my tuppence worth is that prices have started to decline (about 5% in our region since the summer) and will probably continue to do so.

luiswinner

I think that London has an additional value that we are not seeing the long term shot. The olympics in 2012. Even if we going through a 2008 with flat prices this will definitely go back to the positive track. and surpass the estimates (~10%)
then, stop the speculation, London and Britain are still target for immigration and they need housing, and if demand is higher than offer then prices will go up.
Finally, with the expected rate cuts the mortgage applications will increase.

vickyo

glastowinebar wrote: »

I bet those who will be in negative equity as a result of 'large falls' don't share that view

Most people buy a house to live in, rather than make a profit - the prices will even out over time.

catstar_2

I think E most likely and that is what creditable bodies are saying too. It annoys me that the media paint this doom picture and actually create what they are saying, ie they say there will be a massive price drop and everyone stops buying and sits and waits for the prices to drop. I think thats irresponsible and lazy. In actual fact if people just bought normally the market will decide the correct prices, ie if too dear it wont sell or buyers bargains down; if its too cheap more people offer and seller gets more.
Noone wins when the media do this, except the investors because everyone who is waiting decides to rent and then mr buy to let gets his 2nd mortgage paid for..... The buy to let buyers can afford to buy at any time so they will be buying no matter what the market.

astralbee

House prices have gone up for the last 100 years.

Sure, they have dropped for periods of time but then they rise again. If you are a property developer then crashes are going to affect you. But if you are just an ordinary home owner and you want to move house then it is all relative - you get less for your house but the one you buy is cheaper. And if you should find yourself in negative equity (owing more on your mortgage than your house is worth) then just sit tight until it goes up in value again.

Yes, this is a very simplistic view of a huge issue - but there are some things you cannot change and worrying about them will not help one bit, except raise your blood pressure and shorten your life (though if you are well insured this could also solve mortgage issues for your surviving family).

Darrell

rsooty

I am by no way a property market expert, but I do have common sense.

I am 21 years old on 21k per year and I have just bought my second house. I believe that if I can afford to own 2 houses at my age there is no reason why the market should drop at all.

1 of the houses I have had for 2 years owned by myself and I have just purchased the second as a joint purchase with my fiancee. (When I say 'own' I mean they are both mortgaged with repayment mortgages)

For this reason I have chosen that they will still continue to increase in value, although I do not believe the drastic value increase will continue.

Richard