How can house price's fall so much??

lostinrates

mr.broderick wrote: »

It started like a love letter

Gosh, no love letter I've ever wirtten started with the word 'Dear...'

but, I was continuing our courteous new arrangement of being polite!;)

Gorgeous_George

Take a house in Any Street. Maybe No 5?

The bank can lend enough money for a normal family to buy it for £300K. The bank has some security (i.e., No5 Any Street). Risk is rated at, say, 5%.

On the other hand, the bank (now that the credit crunch is biting hard) could limit the lending such that the family can only afford to buy for £150K. The bank has some security (i.e., No5 Any Street). Risk is rated at, say, 1%.

It is in banks' interests for prices to fall. Those who cannot afford to sell wil try to stay put. I hope their homes are large enogh and in the location taht they wish to live for a l...o...n...g time.

GG

neverdespairgirl

SingleSue wrote: »

And I was not even old enough for pocket money then! :rotfl:

I wasn't even a twinkle in my Dad's eye in 1975 (-:

Lotus-eater

neverdespairgirl wrote: »

I wasn't even a twinkle in my Dad's eye in 1975 (-:

I feel old

WTF?_2

mr.broderick wrote: »

Pn i do like you but you are somewhat an anomaly. How many other ftb out there have got £150k in the bank waiting to swoop, let me tell you not many. The vast majority of the people who STR'd (I did this by the way) are currently seeing their savings eroded by poor interest rates and a higher cost of living (Definitely noticing everyday things shooting up in price round here especially eggs). We will not see a crash unfortunately just a 10-15% percentage drop from peak. I have a theory for this, people are impatient. Can I just add i am very disappointed my ronaldo thread has been moved.

Savings aren't eroding at anything like the pace that houses are dropping by so transferring bricks and mortar to cold hard cash a while back is proving to have been the smart decision. And if you put your savings in a decent interest savings account - at least 6% - you can help them keep some value.

On the other hand people servicing a large mortgage on a property are seeing their available cash being eaten away by the price rises but still have to service the same large debt. They could well be facing coming off of a low rate fix and thus onto a much higher rate too. Maybe 50% higher monthly repayments on top of having to pay more for heating, electricity, petrol and food.

It's not looking good for anyone who bought a house at or near the peak on borrowed cash.

iltisman

I think house prices will fall faster when estate agents catch up with reality.It is definitly worth putting in a "daft" low offer eg 250k on a 400k house I know someone who just accepted 275k in this situation.

cells

Hairy wrote: »

I cant help but notice that there seems to be loads of scaremongering on this site. People saying house prices will drop by over 50% in some cases.

I may be wrong here, but how is that possible. Let me explain.

If you owned a house worth £300k and all you could get for it was £150k you simply wouldnt sell. So how the heck are house prices going to drop that much? People simply wont sell. Even if prices drop by 25% I doubt many people would sell, they would stay put, surely?? I am by no means an expert, but isnt this common sense??

Wow my dear! Give a warning before you post such things! Who would have thought it...

slashdotdashdot

I get the impression that the people saying that prices will be slashed by 50% are the ones renting. The ones who were jealous of people who's properties had gone up in value during the boom whilst they were living in their bedsits dreaming about owning a home.

m00m00

slashdotdashdot wrote: »

I get the impression that the people saying that prices will be slashed by 50% are the ones renting. The ones who were jealous of people who's properties had gone up in value during the boom whilst they were living in their bedsits dreaming about owning a home.

yawn, we don't hear this tired argument all the time on here.


there's plenty of property owners who think that the prices are simply no longer sustainable at the peak levels given the link to wages.

the main denial at the moment, is from those who think that property only ever goes up, and that the situation at the moment is just a temporary blip.

will prices drop by 50%

on average, no

on specific properties, they have already.

slashdotdashdot

m00m00 wrote: »

the main denial at the moment, is from those who think that property only ever goes up, and that the situation at the moment is just a temporary blip.

will prices drop by 50%

on average, no

on specific properties, they have already.

Of course property goes down, and it will do for quite some time. But I doubt very much the majority will go down by anything near 50%. 25% perhaps.