Debate House Prices


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House prices: 50% falls before fair value

'In nature, there are neither rewards nor punishments - there are Consequences.'
«13456

Comments

  • sarkin
    sarkin Posts: 785 Forumite
    100,000 mortgage for 25 years on repayment = about 670 a month for FTB according to my software (trigold)

    1 bed flats here in Bournemouth are £140,000

    I think prices need to come down about 35% to make purchasing a viable option
  • brit1234
    brit1234 Posts: 5,385 Forumite
    I think a 50% fall is fair, thats what it would take to bring prices down to about 3.5 times salary here in London.

    The way lending is going 50% is likely especially with far higher interest rates in the future due to massive worldwide inflation.
    :exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
  • HammersFan
    HammersFan Posts: 344 Forumite
    Likely? No chance - quality houses will never sell for anything like 50% of their current value (even if you really really want them to).
    18 May 2007 (start of Mortgage):
    Coventry Offset Mortgage £220800
    Offset Savings: £0
    Mortgage Balance: £220,800

    14 Jan 08
    Coventry Offest Mortgage: 219002
    Offset Savings: 28200
    Mortage Balance: £190802

    And still chucking every spare penny into it!
  • mr.broderick
    mr.broderick Posts: 3,778 Forumite
    1,000 Posts Combo Breaker
    HammersFan wrote: »
    Likely? No chance - quality houses will never sell for anything like 50% of their current value (even if you really really want them to).

    Crunch is stalling, confidence coming back we'll be lucky to realise 5% drops before the upturn.
  • jamescredmond
    jamescredmond Posts: 1,061 Forumite
    this analysis is, by far, the most pessimistic I've read to date.

    whilst I'm in no position to challenge the maths, 50%, on the face of it, does seem excessive.

    I'll go with woolnough and call 25-30%.

    although I could be wrong.

    it has been known.
    miladdo
  • Treadmill
    Treadmill Posts: 1,102 Forumite
    No way house prices will fall by 50% in my opinion, though I'd be happy enough if they did.
  • brit1234
    brit1234 Posts: 5,385 Forumite
    Crunch is stalling, confidence coming back we'll be lucky to realise 5% drops before the upturn.

    Apart from people can't borrow that much from lenders to buy at 5% less. Mr Broderick you have to realise that lenders aren't selling the mortgage debt off anymore, they are relying on their own savers. Hence their lending will reflect what they use to lend before selling off their debt. Higher deposits and lower salary multiples will be the norm again bringing prices down.

    There is no money to allow house prices to rise or stay at this level.

    I would like to see you argument on the reason for a upturn despite the serve shortage of lending money available?
    :exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
  • No way house prices will drop by 50%......they can rise by 100% though?
    Same time span both sides maybe (5-6 years both ways).

    Whats stopping the house price from falling? is it the same thing that pushed them up in the first place? (easy credit) because if so...Umm.. thats gone now. No one is saying it will be next month, or the month after, but in a few years? sure why not?
    Debt : 10500 MNBA CC =£3000 EGG CC =£1500 Overdraft = £1500 Loan = £6000
    LBM2 = May 08 - The internet is not serious business :)
  • mr.broderick
    mr.broderick Posts: 3,778 Forumite
    1,000 Posts Combo Breaker
    brit1234 wrote: »
    Apart from people can't borrow that much from lenders to buy at 5% less. Mr Broderick you have to realise that lenders aren't selling the mortgage debt off anymore, they are relying on their own savers. Hence their lending will reflect what they use to lend before selling off their debt. Higher deposits and lower salary multiples will be the norm again bringing prices down.

    There is no money to allow house prices to rise or stay at this level.

    I would like to see you argument on the reason for a upturn despite the serve shortage of lending money available?

    Keep your knickers on ms ekland i think there is more chance of 5% drops than 50% don't you agree?
  • PhilDS
    PhilDS Posts: 92 Forumite
    brit1234 wrote: »
    Apart from people can't borrow that much from lenders to buy at 5% less. Mr Broderick you have to realise that lenders aren't selling the mortgage debt off anymore, they are relying on their own savers. Hence their lending will reflect what they use to lend before selling off their debt. Higher deposits and lower salary multiples will be the norm again bringing prices down.

    There is no money to allow house prices to rise or stay at this level.

    I would like to see you argument on the reason for a upturn despite the serve shortage of lending money available?

    There's plenty of cash out there, it just costs more. I put my and my wife's income into the Nationwide "How much can I borrow calculator" and was surprised at how much they would lend us in the current climate.

    Income per year = £58k
    Willing to lend = £246.5k

    What's that...4.25 times salary. Our mortgage is currently way below that figure, so I'm not worried about remortgaging in October. The rate will be higher, but you have to expect that over 25 years or paying a mortgage!

    Stop scare mongering.
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