There will not be a crash

neverdespairgirl

pinkshoes wrote: »

We could end up with millions of houses worth only 70% of what they were worth a few months before, but due to wide-spread negative equity, we could end up with the situation where no one wants to sell (or can't afford to sell), so those in rented accomodation waiting to bag a bargain, might find themselves fighting over a few properties no doubt up for sale due to repossession.

There will be people who split up, want to move abroad, die and leave their houses to their children, can't afford the mortgage, need the capital, lose their jobs... there will be sellers. Maybe fewer, of course, but then there will also be fewer buyers.

Generali

neverdespairgirl wrote: »

There will be people who split up, want to move abroad, die and leave their houses to their children, can't afford the mortgage, need the capital, lose their jobs... there will be sellers. Maybe fewer, of course, but then there will also be fewer buyers.

By definition really - rising prices mean demand exceeds supply, falling prices mean supply exceeds demand.

The problem is that people get very confused between demand & want and supply & total number of houses.

dannyboycey

Is this the right place to post an 'Exclusive: the world is flat!' thread? All this talk of the 'impending crash' or 'is there / isn't there' is quite laughable when it's pretty clear that it is happening right now. Quite what it's going to take for people to realise this, I'm not sure.

Today, I can put an offer of 15% less on a property and, in many cases get taken seriously. A couple of months ago I would have been laughed at (or punched). There is a credit crisis, rising inflation, major banks going to the wall, reductions aplenty on rightmove, figures telling us that prices have been dropping for months in a row, a major tightening of lending procedures, mortgage approvals slumping to record lows, financial products being pulled from the shelves daily, LTV's being reduced, record reposessions, EA's cutting jobs or closing altogether..... but it's OK, "there wont be a crash!". !!!!!!!!??? errrr... coffee.... wake up.... smell.......

Sisyphus

Good to see that the HPC subject is not taboo anymore and can be discussed on the main board.
In anticipation of some obvious posts I'll add a couple of the usual sound bytes.
"No-one has a crystal ball"
"house prices always go up"
and another obvious truth
"To every action there is always opposed an equal reaction"

Sisyphus

Sisyphus wrote: »

In anticipation of some obvious posts I'll add a couple of the usual sound bytes.
"No-one has a crystal ball"
"house prices always go up"

these two are usually uttered by the same people.

neas

I love the rent out point... with all the excess properties trying to 'rent' out... The prices to rent will be competitive... so you wont cover the excessive mortgage repayments.

When the banks cant make enough operating costs through larger mortgages their rates will rise up accordindly (14% rate anyone?). This will mean renting wont be an option.. as it will cover prob the 4% of a 14% mortgage. You will be in negative equtiy so wont be able to remortgage off a stupid SVR. Repossesion soon follows... suicides increase. Its not a pretty thought but its a spiral.

Hoario54

dannyboycey wrote: »

All this talk of the 'impending crash' or 'is there / isn't there' is quite laughable when it's pretty clear that it is happening right now. Quite what it's going to take for people to realise this, I'm not sure.

We are in the denial stage, an emotional stand off between what people who own property think there house is worth and what people are now prepared (or able more importantly) to pay.

This will go on for a while longer but the end result will be the same.

pulliptears

I have noticed over the last week 3 properties in my street that have been for sale for 8 months or more now have "Sale Agreed" on them. Friends of ours have just accepted an offer as well and our EA tells us things are starting to move again, albeit slowly.

In my personal situation Im really not fussed what happens. Our home is for sale, we want to move up to a 4 bed detatched from our 3 bed semi. We are not in a rush to move and are really of the opinion when it sells, it sells.

For every month we stay here we pay off a bit more of the mortgage, and for every little drop in price our home goes through the 4 bed detatched properties we are looking at drop similarly. Que Sera Sera.

neverdespairgirl

I disagree with the OP.

As I've stated on another thread, I think that the average house price in England & Wales will fall 10 - 15% for the year from Jan 2008.

MissMoneypenny

neas wrote: »

I love the rent out point... with all the excess properties trying to 'rent' out... The prices to rent will be competitive... so you wont cover the excessive mortgage repayments.

We recently had a BTLer buy a house near us. He paid 20% more than a similar house sold for at the same time, just a few doors down. The LL wants £850pcm rent and it has stood empty since he bought it (about 2 months ago). The house next to his house, is an end terrace and also a BTL. That recently stood empty for 2 months (Dec/Jan) during a change of tennant and that LL was asking £625 for a bigger house.

LLs can ask for what rent they like. Whether they get that rent or not, is a different matter.