How far do you think the UK average property will slide down too?

oldMcDonald

Wow, I always thought I was quite bearish, but you lot............

tradetime

I've also gone for a 30% decline to leave me at around £130,000 (£131,065 to be precise )I think that is too far to be honest, but am working on the principle that in sharp corrections markets often overshoot.

LilacPixie

a 40% drop on the average house would put it in the 113k ish bracket. That sounds about right if the average salary is around 25k. This is of course presuming mortgage companies don't re-introduce 125% mortgages and silly 5 x joint income multiples like have been offered in the past.

LittleMissAspie

I've gone for 25% off (139k). I think it could be more than that but I don't want to get my hopes up. I always thought the 50% off predictions were silly, but if you include inflation then it's possible.

brit1234

LittleMissAspie wrote: »

I've gone for 25% off (139k). I think it could be more than that but I don't want to get my hopes up. I always thought the 50% off predictions were silly, but if you include inflation then it's possible.

50% falls aren't silly if that is at 3.5 times salary levels. Infact it is a strong likely hood as the credit crunch goes on and interest rates rise. Mortgage rates are now about 7% anyway with bills fast rising as well as shopping and transport costs.

oldMcDonald

Agreed that 3.5 x salary is the norm, but isn't that for single income? What was it for joint, it has been so long that stupid amounts have been available that I honestly can't remember - was it 3.5 x main salary and 1 x second? Most families now have two working adults in them, so I think that there could be less people going for 3.5x. Equally though, recession hitting could take the norm down to one working adult in a house - or even none.

mitchaa

I said this in another post but should a mortgage based on a single average wage actually be able to buy an average house? What is an average house? 2 bed flat, or 3 bed semi detached? (I would say 3bed semi detached family home)

Single average wage should be able to buy you a 1 bed, possibly 2 bed flat, but for a 3 bed semi detached family home, i dont get why people would think a single average would or should be enough?? Surely this then boils down to 2 x average wage (£50k)

If a couple had a joint income of 2 x £25k average wages then an averaged priced £150,000 home would only be 3x income and be deemed reasonably affordable.

I think some of you lot are nuts predicting 50%+ falls if im being honest. Houses would then become stupidly cheap, especially in a joint mortgage scenario (£50k joint income)

m00m00

50% falls on average, not a chance

>50% falls on specific properties, seen it already here.

I'm regularly seeing 20-25% drops in the past 12 months in ex LA properties here

LittleMissAspie

I don't think most households are earning 2x average salary. Out of my 5 colleagues plus me, not a single household is comprised of two people in full-time work earning 25k each.

My boss is well paid but lives on his own.
My manager works part time, has husband and children.
The other manager is part time, has husband and children.
Admin assistant is part time, has husband and child.
Trainee is full time but earns well under 25k. Has girlfriend, no children.
I work part time, have boyfriend and no children.

And then you have to remember that all the women with children who are part time are spending a LOT of their wages on childcare. The admin assistant has £200 a month left after childcare. Not sure why she bothers working 2.5 days a week for that.

So I don't think 6x single average income is realistic. I think 4x is more realistic. That takes into account that a lot of couples are both working now, but the mother is likely to be part time and childcare will make a dent into affordability.

mitchaa

m00m00 wrote: »

50% falls on average, not a chance

>50% falls on specific properties, seen it already here.

I'm regularly seeing 20-25% drops in the past 12 months in ex LA properties here

I think thats a very good point. We are talking about these nationwide figures here not individual specific properties where i agree there have been some hefty falls noted already.

For it to be a 50% fall UK wide remember thats 50% in every single city, town, village etc across the whole of the UK, or perhaps 75% falls in half the areas followed by 25% falls in the other half.

I think to get beyond 50% for every single home in the UK is complete and utter madness.