How far will house prices fall [volume 4]
Discussion
Pork said:
Housing market on the brink of collapse, warns economist.
https://www.ftadviser.com/mortgages/2017/07/03/hou...
"I doubt we’ll see falls of 40 per cent or so, 25 per cent is more likely, but with unpredictable elements such as Brexit it’s hard to predict where we will be in a couple of years’ time."
There has been hundreds of articles exactly the same over the past 7 or 8 years. https://www.ftadviser.com/mortgages/2017/07/03/hou...
"I doubt we’ll see falls of 40 per cent or so, 25 per cent is more likely, but with unpredictable elements such as Brexit it’s hard to predict where we will be in a couple of years’ time."
Pork said:
p1stonhead said:
There has been hundreds of articles exactly the same over the past 7 or 8 years.
7 or 8 years? I'd say since about 2003. Massive migration.
BREXIT might actually help prices become sustainable / reduce a touch.
Welshbeef said:
Pork said:
p1stonhead said:
There has been hundreds of articles exactly the same over the past 7 or 8 years.
7 or 8 years? I'd say since about 2003. Massive migration.
BREXIT might actually help prices become sustainable / reduce a touch.
p1stonhead said:
It may slow the rise but it won't make it drop. Those already here are staying after all.
In many areas in the U.K. There already has been a crash. On R4 yesterday 12-12:30 moneybox this was discussed in detail. Take N Ireland now seeing 4% rises however as clearly highlighted that's from a base which is 50%+ down from 2007. Then take a new build flat in Newcastle bought for £250k in 2007 sold this month (land registry price) £80k. That's the real "crash". It's a local thing.
Ripples from London market take 2to3 years to flow out to the whole of the U.K.
Welshbeef said:
p1stonhead said:
It may slow the rise but it won't make it drop. Those already here are staying after all.
In many areas in the U.K. There already has been a crash. On R4 yesterday 12-12:30 moneybox this was discussed in detail. Take N Ireland now seeing 4% rises however as clearly highlighted that's from a base which is 50%+ down from 2007. Then take a new build flat in Newcastle bought for £250k in 2007 sold this month (land registry price) £80k. That's the real "crash". It's a local thing.
Ripples from London market take 2to3 years to flow out to the whole of the U.K.
p1stonhead said:
Are there any figures that show any areas of London have fallen outside of prime money? Still strong money being had for 'normal' houses.
One point was raised re BTL and that the expectation was an exodus - well it simply hasn't happened. Instead what it's done is reduced the number of new entrants whereas those in the game are still buying & the view is very long term investment. The age old
1. Highly educated areas
2. Very good schools
3. Low crime areas
4. Proximity to infrastructure- travel/commute.
Are the main points nothing has changed.
My personal area is seeing transactions certainly materially up at the £500-900k territory whereas it had frankly stalled for 18months or so.
p1stonhead said:
Pork said:
Housing market on the brink of collapse, warns economist.
https://www.ftadviser.com/mortgages/2017/07/03/hou...
"I doubt we’ll see falls of 40 per cent or so, 25 per cent is more likely, but with unpredictable elements such as Brexit it’s hard to predict where we will be in a couple of years’ time."
There has been hundreds of articles exactly the same over the past 7 or 8 years. https://www.ftadviser.com/mortgages/2017/07/03/hou...
"I doubt we’ll see falls of 40 per cent or so, 25 per cent is more likely, but with unpredictable elements such as Brexit it’s hard to predict where we will be in a couple of years’ time."
This time is no different - there's no agreement on what the latest data shows.
http://www.dailymail.co.uk/money/mortgageshome/art...
Article said:
Britain could be on the brink of a major 1990s-style house price collapse, according to an academic at the London School of Economics. Professor Paul Cheshire, who has advised the Government on housing policy, said: 'We are due a significant correction in house prices. I think we are beginning to see signs that correction may be starting'.
Article also said:
Noble Francis, economics director of the Construction Products Association, said: 'The data would suggest the housing market has slowed. If it were to slow further that wouldn't be a major surprise, but there's no data that suggests a collapse.'
If thee ever was a full on crash what we would end up with is people buying and selling "1 house" which is its worth.
A crease would only impact those who had to sell. Someone on a 10% LTV as in 90% equity simply isn't going to care likewise I'd wager most people.
It's a potential cheap step up the ladder too if your so inclined.
A crease would only impact those who had to sell. Someone on a 10% LTV as in 90% equity simply isn't going to care likewise I'd wager most people.
It's a potential cheap step up the ladder too if your so inclined.
Welshbeef said:
If thee ever was a full on crash what we would end up with is people buying and selling "1 house" which is its worth.
A crease would only impact those who had to sell. Someone on a 10% LTV as in 90% equity simply isn't going to care likewise I'd wager most people.
It's a potential cheap step up the ladder too if your so inclined.
The last sentence being the key here. Unless you are at the top of the chain you'll always benefit from a widespread real estate crash A crease would only impact those who had to sell. Someone on a 10% LTV as in 90% equity simply isn't going to care likewise I'd wager most people.
It's a potential cheap step up the ladder too if your so inclined.
Justayellowbadge said:
Always?
How does negative equity help you borrow more?
For the small % of people in that situation stepping up is high risk anyway + clearly you've only just got to that step anyway give others a chance who've been on it a while with a lot more equity than those to step up. How does negative equity help you borrow more?
Welshbeef said:
One point was raised re BTL and that the expectation was an exodus - well it simply hasn't happened. Instead what it's done is reduced the number of new entrants whereas those in the game are still buying & the view is very long term investment.
The age old
1. Highly educated areas
2. Very good schools
3. Low crime areas
4. Proximity to infrastructure- travel/commute.
Are the main points nothing has changed.
My personal area is seeing transactions certainly materially up at the £500-900k territory whereas it had frankly stalled for 18months or so.
The chap next door to me has just had his house valued. It is similar to mine, although a little smaller. I was surprised how much it had increased in value over the 5 years I've lived here. He said that the valuer had pointed out that there's only been one burglary in the road I live in for the time the records went back (oddly enough, just two days after I moved in). It is literally less than 10 mins walk from the main line railway station and the schools have an excellent record. This was given by the valuer as an underpinning for the value.The age old
1. Highly educated areas
2. Very good schools
3. Low crime areas
4. Proximity to infrastructure- travel/commute.
Are the main points nothing has changed.
My personal area is seeing transactions certainly materially up at the £500-900k territory whereas it had frankly stalled for 18months or so.
Whether to believe it or not is the question. We've only had two houses sold in the last two years and the valuation was, oddly enough, the average.
Estate agents are partly why prices rise. They have to win your business by providing you with a good price valuation and they are individually sales/target driven to turn over as much as possible in a area.
On an another note one of my neighbours is in negative equity (they were looking to downsize as they are struggling with debt repayment and behind on their mortgage). I fear that when a crash happens what happens to them? They already struggle with the bills and repayments (and on the mortgage). Scary if this is replicated. They aren't big spenders and don't live beyond their (whats visible to me) means. Their situation can happen to anyone; me, you etc. Unless we have big savings. We all stretch ourselves from time to time, go through periods of maybe a treat etc. What if there is another event coincidial along with a economy dip?
On an another note one of my neighbours is in negative equity (they were looking to downsize as they are struggling with debt repayment and behind on their mortgage). I fear that when a crash happens what happens to them? They already struggle with the bills and repayments (and on the mortgage). Scary if this is replicated. They aren't big spenders and don't live beyond their (whats visible to me) means. Their situation can happen to anyone; me, you etc. Unless we have big savings. We all stretch ourselves from time to time, go through periods of maybe a treat etc. What if there is another event coincidial along with a economy dip?
Sa Calobra said:
On an another note one of my neighbours is in negative equity (they were looking to downsize as they are struggling with debt repayment and behind on their mortgage). I fear that when a crash happens what happens to them? They already struggle with the bills and repayments (and on the mortgage). Scary if this is replicated. They aren't big spenders and don't live beyond their (whats visible to me) means. Their situation can happen to anyone; me, you etc. Unless we have big savings. We all stretch ourselves from time to time, go through periods of maybe a treat etc. What if there is another event coincidial along with a economy dip?
I can imagine this is very widespread, and it is one of the reasons that the Government keeps doing everything they can to keep the bubble inflated. A price crash will be very painful for people who have bought relatively recently, even if it would have advantages for those who haven't.I know that you are talking about possessions/lifestyle when you say your neighbours are living within their means, but it is all relative in terms of housing.
A couple with a £150k income may well have expected to live in quite a good house years ago, but if they have to find £1m to but a bog standard semi now, is that within their means? The answer is probably yes as long as interest rates don't go up too far, but if they do and a job is lost that could make a massive difference.
Sa Calobra said:
In our area a bogstandard semi is now hitting 500k which is bonkers. Looking at the purchase history and 5+yrs ago these were circa 140-180k.
No one in our area is in flashy jobs in Manchester. They wouldn't live where we do for a start!!
Don't know where you are but find it hard to believe a standard semi has tripled in price in the last five years. Do you have any examples?No one in our area is in flashy jobs in Manchester. They wouldn't live where we do for a start!!
Sa Calobra said:
In our area a bogstandard semi is now hitting 500k which is bonkers. Looking at the purchase history and 5+yrs ago these were circa 140-180k.
No one in our area is in flashy jobs in Manchester. They wouldn't live where we do for a start!!
You will probably find that the people with the flashy jobs will be there before long!No one in our area is in flashy jobs in Manchester. They wouldn't live where we do for a start!!
That is certainly what has happened in my area. It is just a totally different demographic to ten years ago. There are plenty of higher level professionals who in the past would either have bought a house in the more fashionable suburbs closer to London or moved out to a bigger house in the commuter belt. Now both are out of reach, so they end up stuck between the two.
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