Jumping off the property ladder- are we mad to even consider it?

PasturesNew

panichousebuyer wrote: »

Surely not a 50% drop that is quite a lot!

I would say 50% for certain types of house. e.g. ex-council, new build flats where they've been built on every square inch of spare land in the last 4 years.

For normal 1-3 bed houses I'd say 30-40% and for larger/well-appointed and posh places, 25-30%

Indeed, you can already see these price drops being achieved at auctions, which are a great indicator of "worth".

Houses are only priced at what they were because that was the maximum people could borrow. If they now have to save a deposit and borrow less it makes them more discerning and reduces the prices.

If you are lent 100% to buy something, you are less likely to question its cost than if you can only borrow 90%, because you're ploughing in your own hard-earned savings.

If you are only lent 3x salary and not 6x then prices have to follow accordingly.

And the banks don't have the money to lend to people with a bad credit history.

When a bank lends you money on a house, it has had to borrow the money itself. When you hand over a £1000 mortgage payment they're probably handing £950 of that straight over to the bank they borrowed the money from. That's the way it works. The money isn't theirs. So with all the late payments and repossessions they've already run out of money ... once they recover they won't be doing that again.

At the moment, if 100 people ask for a mortgage, perhaps 90 will get one. What if only 50 can? For the next 4 years?

mpsavuk

mrstinchcombe wrote: »

House prices will go down, but surely not £500 plus which you propose throwing away on rent!

I paid £700 rent last month

And last month the average property in the UK lost £4500.

Who's throwing away money?


:rotfl: