Sell Your House Now Or Face 80% Falls, what is YOUR prediction?

halia

IveSeenTheLight wrote: »

Looking at this as percentages, we are currently 22% overvalued (on average (178k/146k)) while in 1990 we were 45% overvalued (116k / 80k)

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One last point while discussing averages. If the UK is on average 22% overvalued then there will be properties that are far more over valued than this average. There will also be properties that are far less over valued or even still undervalued. It will depend on each specific area / type of property.

thank you for talking sense!

I do get a bit tired of the sentiment often expressed on these boards that EVERY house will be overpriced by 10, 15, 20%, or that every house will fall in value.

The only thing that is certian is that nothing is certain! and that every house, every buyer, every set of circumstances is different.

IveSeenTheLight

m00m00 wrote: »

you are staggeringly blinkered if you believe this.

how did people get BTL without an expected income of 125% in short, they LIED.

there is a massive increase in the amount of BTL mortgages over the past 2 years at highly inflated prices, there's been no end of posts on this forum and stories in the media from landlords who are in negative geared investments.

Not blinkered, I did state that stupid landlord subsadise their tenants.

I have two BTL properties, one bought in Jan 2007.
One has a rent to mortgage ratio of 161% the other one (bought in Jan 2007) is bang on 125%

If you believe the majority subsadise the tenants then you must believe that the majority of LL's are stupid. That's okay if it is your oopinion, I just dont think that its the minority of landlords that gets the rental yield and has a good rent to mortgage ratio

BTL / LL's has been arround a lot longer than the last two years.
Even those who have bought in the last two years could as I have, have properties which meets the requirements

Therefore it was and possibly still is possible to buy properties in certain area which fall into the requirement of 125% rent to mortgage

IveSeenTheLight

halia wrote: »

thank you for talking sense!

I do get a bit tired of the sentiment often expressed on these boards that EVERY house will be overpriced by 10, 15, 20%, or that every house will fall in value.

The only thing that is certian is that nothing is certain! and that every house, every buyer, every set of circumstances is different.

Same to you.:T :T :T

Oliveru

halia wrote: »

The only thing that is certian is that nothing is certain! and that every house, every buyer, every set of circumstances is different.

Yet all tied into the same system of sentiment and credit availability. There will be a very small minority of houses that won't be affected as much by the crash, it will be the big expensive ones that the super rich buy. In most cases, and I'm guessing your case if you are a homeowner- you will bear the full brunt of the crash, excuse the pun.

But some areas will crash sooner and some later, for example certain types of property in the West Midlands started crashing last year I believe. However one thing that will affect all areas at the same time is the credit contraction (credit crunch) so many areas will fall at exactly the same time due to this.

m00m00

the east midlands has pretty much been in a slump for the past 2 years

arthur_dent_2

If my house fell to just a fifth of its current value, that would make it available to a single person on minimum wage doing only 25 hours a week. I really don't think that that is going to happen. Yes there is a price correction but those people that think the are going to be able to buy a castle for a grand are mistaken.

Oliveru

arthur_dent wrote: »

If my house fell to just a fifth of its current value, that would make it available to a single person on minimum wage doing only 25 hours a week.

And why not? Most people in this country won't realise the full 80% drop because their wages and living standard are all tied to sterling. So infact your single person wouldn't be able to afford a house, especially considering his wages aren't going up with the real high inflation rate as opposed to the figure the government tells you.
Most people might realise drops in the region of 40-50% in price terms but due to inflation in essentials like food, energy and petrol it will probably feel more like 20-30% as it's the affordability hitting everyone ontop of less credit available- the house might be cheaper but it will still feel expensive! Kind of ironic. And thats without taking higher interest rates into the equation, high interest rates right now would absolutely destroy the housing economy which might be one of the reasons banks are reluctant to raise them much.

It's like comparing a house/ apartment in a foreign country now to the UK- they seem very cheap indeed! No reason why the same comparison can't be reversed.

IveSeenTheLight

arthur_dent wrote: »

If my house fell to just a fifth of its current value, that would make it available to a single person on minimum wage doing only 25 hours a week. I really don't think that that is going to happen. Yes there is a price correction but those people that think the are going to be able to buy a castle for a grand are mistaken.

I think the majority of the correction will be London and the South East with a much smaller if any corrections throughout the rest of the country. (if it follows what happened between 1989 and 1996)

http://forums.moneysavingexpert.com/showpost.html?p=11313749&postcount=26

PayDay

IveSeenTheLight wrote: »

I think the majority of the correction will be London and the South East with a much smaller if any corrections throughout the rest of the country. (if it follows what happened between 1989 and 1996)

http://forums.moneysavingexpert.com/showpost.html?p=11313749&postcount=26

I know of areas in Yorkshire that have tripled in value in the last 9 years. Why is is that you are prepared to believe that houses can go up by vast percentages in a few years, but you don't think they can fall?

merlinthehappypig

PayDay wrote: »

I know of areas in Yorkshire that have tripled in value in the last 9 years. Why is is that you are prepared to believe that houses can go up by vast percentages in a few years, but you don't think they can fall?

I was having this conversation with my wife yesterday.

It's obviously something in the British psyche. We can accept huge rises as normal, but are very blinkered when it comes to falls.