How can house price's fall so much??

gussie

woodbutcher wrote: »

... Puts me in mind of all that guff in the 80's when Thatcher sold all the family silver and people where chuffed to bits that they had £200 quids worth of British Gas shares.Where's Sid now? He's called Ivan and he is charging us a fortune for gas and electric ... Never ceases to amaze me how the bottom line in this country is "how much is it worth" while the rest of Europe just plod on renting affordable property and laughing at us.Glad i aint got no mortgage and couldn't care less what my house is worth,because it is "home" and you can't put a price on that.

Spot on!

An honest summary of society and attitudes in this country - we have an unhealthy ethos of greed fed by an unhealthy concentraton of financial industry (and BTW nothing else) that has been supported by past, present and probably future UK governments.

Like woodbutcher I have have no mortgage, can afford to relax and watch the inevitable bloodletting.

SingleSue

50% losses are possible....our house lost just over 54% from peak in the last 'crash'.

dopester

gussie wrote: »

Spot on!

An honest summary of society and attitudes in this country - we have an unhealthy ethos of greed fed by an unhealthy concentraton of financial industry (and BTW nothing else) that has been supported by past, present and probably future UK governments.

Like woodbutcher I have have no mortgage, can afford to relax and watch the inevitable bloodletting.

It's strange how so many home-owners (mortgage free) with no real debt worries can see the problems ahead a lot more clearly than those servicing dock-off mortgages.

boogiesherbs

I feel some people are reveling in this current crisis thinking "Ha ha silly people thinking they can use there equity as spending money now they are in trouble"
But not all people had the opportunity to buy when prices were so low and make a profit due to being a kid!, we bought our first house last year so now we will be stuck on a SVR and will struggle through, there are two side to the housing crash

Conrad

Hairy wrote: »

So you would sell your house for half price???? lets revisit this thread in a year. See who the real dreamers are.

Hairy,

The fact some wont sell thier home for any particular sum is irrelevant.
The same could be said in Japan where prices did fall over 50% with 0% interest rates and a higher population density (per m2 of buildable land) than the UKs.

Prices are set at the margin my the big proportion of market participants that have to sell.

I invested a bit in German property and I can tell you prices dropped in Berlin by over 50%, some by 90%, thats the power of market sentiment at work, nothing more.

Austin_Allegro

Does the OP's name refer to his palms, I wonder? :rolleyes:

dannyboycey

boogiesherbs wrote: »

I feel some people are reveling in this current crisis thinking "Ha ha silly people thinking they can use there equity as spending money now they are in trouble"
But not all people had the opportunity to buy when prices were so low and make a profit due to being a kid!, we bought our first house last year so now we will be stuck on a SVR and will struggle through, there are two side to the housing crash

Nobody forced you to buy last year. Maybe friends, colleagues or family said that you had to get somewhere before you missed the proverbial boat, or that prices will only keep going up. Maybe you got carried away with the idea of home-ownership? I don't know your situation, but what I do know is that last year (when you bought), there was an abundance of statistical information available that indicated a crash was an inevitability in 2008/09. You also mention that you are "stuck on a SVR" - so you went for a 1/2 year fix? Again, you had a choice of financial products available to you.

Sorry if I sound harsh, but the way you're talking makes it seem like you had no choice and that we should feel some sympathy.

PasturesNew

Last year I sold. Went to market in June 2006 and by Xmas 2006 I was virtually screaming at the walls with panic over not being able to shift it.

It seemed to me by then that EVERYBODY must know there was big trouble ahead. Every day I could see/hear reports all indicating the same thing. Interest rates were going up, reports on house price crashes, doom, gloom. I saw it everywhere. Every day I was panicking that my buyer would pull out as they could see what I was seeing.

ruggedtoast

pickles110564 wrote: »

Still living in rented paying for my mortgage thanx:rotfl:

Yes lets talk about your mortgage. Rental yields falling, mortgage rates rising, property prices sinking (you know, property - the "falling in value thing" you bought with your mortgage) - must be a worrying time for the Family Pickles.

But I'm sure knowing a financial mastermind such as yourself is in charge must be a great comfort to them.

Sir_Humphrey

magicdogsbrain wrote: »

I live in a not so good area in a smallish house and would like to 'upgrade' in 5 or 6 years. I hope I can catch the tail end of this before it sorts itself out.

Do you folks think that house prices will compress so that expensive houses fall very fast and FTB houses dont fall as fast - or will it be a uniform % of the current value decrease?

Also, do you think area will compress - e.g. Very posh area will fall faster than a not so posh area a few miles away?

I think yes and yes.

I wish they did fall 50% but I just dont see the fundamentals at all. About 20% is my worst (or best) case.

Remember this is not a UK driven economic phenomenon - it was caused by the housing bubble in the US - and the realization of the investment vehicle that was packaged as good debt when actually it was mixed. Then the banks stopped lending to each other because they didn’t know how exposed to this bad debt the other bank was.

Anyway – nobody on this board really knows whats going to happen – unless your name is Mervin or Ben (and even then it’s a guesstimate).

My personal guesstimate is 30% nationally, with 40% in London. This over 2-4 years, and is nominal (not inflation adjusted). This is based on nothing more that last time prices fell by 20% (30% London) over 4-5 years according to Nationwide. Since the bubble seems to be bigger this time and inflation lower (yes, really) then I expect a bigger fall. The evidence so far is that this bubble is bursting faster than the last one, hence the faster time.

I expect a lot of variation, some areas will fall less, some more. The picture for specific types of property in particular areas is impossible to predict, as there are many factors, some of them random.