How far will house prices fall [volume 4]

[Derek Chevalier]

Anyone fancy a flutter?

http://www.starsportsbet.co.uk/star-specials-house...

[98elise]

NinjaPower said:

wc98 said:

Pork said:

I genuinely do not get why we celebrate the cost of homes increasing in the UK and I think I'm just about alone on that.

If my home goes up, it just means my kids will eventually need a bigger mortgage if they want to buy or have to pay more rent as their landlord has to pay more so will charge more. Or indeed will be a large pension fund! I'd rather they didn't become even more enslaved through debt just to have accommodation (or spend their days wishing for inheritance!).

If that means my house doesn't go up, I don't care. It's a home. So long as I can service the cost, I don't care what someone with a vested interest tells me how much it's gone up or how much more it would cost to buy the next house up.

Of course, if you're an estate agent, mortgage provider or politician then increases are all super news - increased commission, increased loan values and continued votes.

you are not alone in that train of thought at all.

I totally agree with Pork.

It's utter madness and I wish it would stop for the sake of future generations.

And I say this as someone who owns their home outright and theoretically should be happy at every increasing values.

I agree, and I'm a BTL landlord!

I would like to be able to expand my BTL portfolio, and rent to people that want to rather than have to.
I would like my kids to be able to buy a house when they want to.
I would like people to be able to buy at least a starter home on an average salary.
I would like to move up the ladder at a reasonable cost.

None of that is possible at the moment.

[Derek Chevalier]

anonymous said:

[redacted]

I think #1 is the only real driver - rest of the factors have a magnitude or two less of an influence. No idea when it will change, but it's going to hurt when it does - we've never been in this situation before....

[mondeoman]

I just cant get my head around whether we're looking at interest rate rises soon or negative rates or more of the same at 0.5%.

Large rate rises could see an increase in repossessions, leading to more property on the market, leading to reduced (!) prices.

[turbobloke]

anonymous said:

[redacted]

Not sure why you separated out demand from 1) to include it with housing stock in 2) when supply of credit as per 1) is a key element of the demand side? Mortgage availability / affordability is/are demand drivers.

[W124]

Demand. It's driven by supply AND sentiment. Sentiment can be rational or irrational. A sudden change in sentiment will kill the market at some point. My own humble opinion is that this is already happening.

[98elise]

turbobloke said:

anonymous said:

[redacted]

Not sure why you separated out demand from 1) to include it with housing stock in 2) when supply of credit as per 1) is a key element of the demand side? Mortgage availability / affordability is/are demand drivers.

Agreed. Demand is made up of the desire to buy, and the ability to pay (and for a lot of people thats a mortgage).

Edited by 98elise on Monday 28th March 07:34

Edited by 98elise on Monday 28th March 07:35

[TLandCruiser]

thr problem is no matter if prices fall/crash they will return or go back up eventually let's say a 500k house in a nice area with good schooling dropped to 250k the house goes on the market and five people all offer the 250k, one of the five will raise the bid to secure the house and so the cycle goes on.

[Pork]

TLandCruiser said:

thr problem is no matter if prices fall/crash they will return or go back up eventually let's say a 500k house in a nice area with good schooling dropped to 250k the house goes on the market and five people all offer the 250k, one of the five will raise the bid to secure the house and so the cycle goes on.

Unless the house is still falling or expected to fall. Then people are less keen.

IMO, unless funding is massively restricted (following some Black Swan event or something), then the only way prices are going is one way. I reckon it's more likely that something else will be tweaked or fiddled with to ensure the climb continues than prices return to something sensible

[TheLordJohn]

Pork said:

Unless the house is still falling or expected to fall. Then people are less keen.

IMO, unless funding is massively restricted (following some Black Swan event or something), then the only way prices are going is one way. I reckon it's more likely that something else will be tweaked or fiddled with to ensure the climb continues than prices return to something sensible

And if borrowing is made more difficult, the lenders stand to make less money, also.

[Welshbeef]

A big issue is if there is a drastic change in the market it will cause massive increase to the deficit as people spend less in the economy.

So you could have falling house prices economy drastically subdued followed by tax hikes as that would be the only option.

Added to he fact the govt own massive % of the banks meaning we gain less in capital appreciation/get our money back + even longer before they are offloaded.

[Pork]

TheLordJohn said:

And if borrowing is made more difficult, the lenders stand to make less money, also.

Possibly.

Or instead of making 1% on £300k, they make 3% on £100k. I doubt lenders will lose out, short of market oblivion.

[Welshbeef]

Pork said:

Possibly.

Or instead of making 1% on £300k, they make 3% on £100k. I doubt lenders will lose out, short of market oblivion.

How much did banks lose out in the 88 and 92 crashes as a % of total profits?

[TLandCruiser]

Could the government also want to keep property high to pay for elderly care, by that I mean as the population grows each year and life expectancy gets longer this will put a strain on elderly care, as you know when you go into a home the council will force the sale of your house to cover your care until your assets are depleted.

Just a thought?

[Welshbeef]

anonymous said:

[redacted]

Who should?
Currently we do not tax the population for this yet expect it for free so if we want it then fine let's reduce the income tax starting threshold or up VAT or up income tax % across the board or lower starting point of NI.

[princeperch]

every month I have a look at what's sold in my old stomping grounds to see what madness occurred over the past few weeks and months.

whoever paid 540k for this must have done so shortly after having half their brain removed.

http://www.rightmove.co.uk/house-prices/detailMatc...

picture 6 sort of sums it up. on a main road, ex LA, surrounded by quite a few scumbags, the number 8 and N8 bus running a few feet from your bed and garden. some poor hipster is probably stting his pants now after wondering what they have done..

[Mr Whippy]

TLandCruiser said:

Could the government also want to keep property high to pay for elderly care, by that I mean as the population grows each year and life expectancy gets longer this will put a strain on elderly care, as you know when you go into a home the council will force the sale of your house to cover your care until your assets are depleted.

Just a thought?

But keeping it high is pointless if it can't be sold high.

So you need buyers.

So you need to increase wages lots.

That means money is worth less, so care homes etc cost more to run.

One way or another unless houses are affordable by the majority then using them to pay for other things won't work.


Hyperinflation will fix all this, unless a crash does it first.

[robinessex]

Does this topic win the prize for being the least accurate of them all?

[Mr Whippy]

I'm still watching all the same properties around here not selling too.

£300,000 > £750,000 and nothing seems to move.

I'd say 50% of what is for sale in that bracket was there almost 3 years ago, and the other 50% has been added linearly since and hasn't shifted either.

The only way for things to move is NIRP and we get paid to borrow money, prices going down, or salaries going up.

Either way it's a loss of wealth for everyone involved.

[Mr Whippy]

I'm sat here watching a bungalow nearby having two ground floor extensions and dormers added to it.

It's gone from a granny house to a family home. So where do the grannies go now?

And why are there no decent sized family homes for these people to move into that are reasonably priced?

It's all gonna end in tears around here.

We want to buy but were happy renting feeling quite content that affordability will improve one way or another... salaries up or prices down.