How Far Will House Prices Fall? [Volume 6]
Discussion
okgo said:
No of course. But if you can save 25k then probably you can save 50k. Saving 100k or 200k for most people is never going to happen.
Purely anecdotally I would disagree. I know a few people who have effectively decided that they will never buy in London and have not made the effort to save up a deposit. I suspect if the savings target was £25-50k not £50-100k they might re-evaluate that decision. Unfortunately if they start saving now prices may go away from them again.The best time to plant a tree was 20 years ago, the second-best time is now.
z4RRSchris said:
okgo said:
No of course. But if you can save 25k then probably you can save 50k. Saving 100k or 200k for most people is never going to happen.
takes a while though doesnt it, it wouldnt surprise me if couples have saved £25k this year by not going on the piss and 3 holidays. Saving £2k a month is unfathomable for most.
Oh and as you climb the ladder, interest only resi is back!
amongst others, and not a Retirement Mortgage, is Leeds (not seen details) and Coventry (min 300k equity max 50% LTV) who accept the mortgaged property equity (max 50%) as the repayment vehicle. 1.79% 2yrs fix.
I don't think this is mainstream though. YET.
.
amongst others, and not a Retirement Mortgage, is Leeds (not seen details) and Coventry (min 300k equity max 50% LTV) who accept the mortgaged property equity (max 50%) as the repayment vehicle. 1.79% 2yrs fix.
I don't think this is mainstream though. YET.
.
NickCQ said:
Purely anecdotally I would disagree. I know a few people who have effectively decided that they will never buy in London and have not made the effort to save up a deposit. I suspect if the savings target was £25-50k not £50-100k they might re-evaluate that decision. Unfortunately if they start saving now prices may go away from them again.
The best time to plant a tree was 20 years ago, the second-best time is now.
I was talking more holistically about the UK market vs London, yes, you can double the numbers for London. Prices of course will go away, but you're only needing to find 20% of any rise to keep pace given 5x borrowing, and for me, living in London and not making quite a lot more than the average salary doesn't make a huge amount of sense long term. The best time to plant a tree was 20 years ago, the second-best time is now.
As Chris said, two people making good money in the city, it shouldn't be that difficult to save what is required for a 2 bed flat. And while pistonhead is right to a degree, this year has been extremely cheap for most people.
MX-6 said:
turbobloke said:
If I heard it correctly a radio news item just claimed we've hit a new record for the average uk house price.
Yep they are up again, Nationwide reporting a 0.7% month on month rise last month.https://www.bbc.co.uk/news/business-56250728
Leicester Loyal said:
Just shows how hard it is to even keep up, I'm looking at around 210-230k budget, so a rise of 0.7% a month is 1.6k, every month. As a single person, it's virtually impossible for the majority of people to save that sort of cash every month.
its fine you only need to save 5% of that, the gov and banks will spunk up the rest. z4RRSchris said:
its fine you only need to save 5% of that, the gov and banks will spunk up the rest.
True 
Couple of viewings arranged for the end of the week, hopefully find something I like. Been a bloody long 9 months now, just want somewhere and not worry about moving house again for a good few years.
Leicester Loyal said:
MX-6 said:
turbobloke said:
If I heard it correctly a radio news item just claimed we've hit a new record for the average uk house price.
Yep they are up again, Nationwide reporting a 0.7% month on month rise last month.https://www.bbc.co.uk/news/business-56250728
AyBee said:
But you're not paying that increase in equity, so 90% mortgage means you just need to find £160...
True, but I meant overall. If you only save £1.6k in 10 months but they go up 16k, you'll need an extra 15k borrowed, which might not be possible.Honestly feels like we're in a housing crisis, I ring up for houses that have been listed for 48 hours and they've sold already, I can't get viewings until about a week later, occasionally before I even get to view it someone rings me and tells me it's already been sold so my viewing is cancelled.
The whole situation is making me feel pretty s
t if I'm honest, which is ridiculous as I'm in a fantastic position and 90% of people who don't own a home would give anything to be in my position.Leicester Loyal said:
AyBee said:
But you're not paying that increase in equity, so 90% mortgage means you just need to find £160...
True, but I meant overall. If you only save £1.6k in 10 months but they go up 16k, you'll need an extra 15k borrowed, which might not be possible.Honestly feels like we're in a housing crisis, I ring up for houses that have been listed for 48 hours and they've sold already, I can't get viewings until about a week later, occasionally before I even get to view it someone rings me and tells me it's already been sold so my viewing is cancelled.
The whole situation is making me feel pretty s
t if I'm honest, which is ridiculous as I'm in a fantastic position and 90% of people who don't own a home would give anything to be in my position.That's not the way most people (your 'competition') are looking at it though, they are happy to pile on as much debt as they can, because it's cheap to serve and likely to remain so.
I sympathise completely with you, because I think that you are looking at it the 'right' way, but the market will move on because others don't think the same way. We'll reach the top of current borrowing limits before too long, so expect another announcement from Boris and Rishi about what they are going to do next at some point before then...
You've got to look on the bright side, though. I can't find the post now, but someone recently posted on this thread something along the lines of 'Housing is a rigged game, but that just means it pays to be playing'. I agree with that. It is crazy what has happened to house prices, but it doesn't mean it won't happen again. In fact it makes it more likely.
i was convinced in 2014/2014 we would see a big crash, the fundamentals were crazy and all the signals were there for a huge correction.
2015-now we have seen some prime property classes take a 20-30% hit, and in real terms stagnant has seen a drop but what i never appreciated was the blind depths the gov would go to to support the market.
it’s rigged, i look at data all day every day it’s my job, this market isn’t going down it would cost too many votes.
2015-now we have seen some prime property classes take a 20-30% hit, and in real terms stagnant has seen a drop but what i never appreciated was the blind depths the gov would go to to support the market.
it’s rigged, i look at data all day every day it’s my job, this market isn’t going down it would cost too many votes.
I think a hard part is also now knowing how much extra over the list you need to go in at to stand a reasonable chance.
Say a property is mid-90s build, functional although dated and worn finishes, and services (appear) in good condition, how much do you try and factor in the market rush and rapid rising in price vs cost to do it up to a similar finish of nearby comparables?
e.g. 150k house as is, but next door sold for say 160k in September last year. But the finishes and garden etc. at the house will probably need about 10k to bring up to the same standard as next door. However websites Zoopla now showing 170k estimate for the next door that sold in September last year. What do you do? Go in at just over 150k? Go in at 160k and hope that Zoopla etc. are somewhere in the right region? Very difficult to assess with not many recent sales in the area...
Say a property is mid-90s build, functional although dated and worn finishes, and services (appear) in good condition, how much do you try and factor in the market rush and rapid rising in price vs cost to do it up to a similar finish of nearby comparables?
e.g. 150k house as is, but next door sold for say 160k in September last year. But the finishes and garden etc. at the house will probably need about 10k to bring up to the same standard as next door. However websites Zoopla now showing 170k estimate for the next door that sold in September last year. What do you do? Go in at just over 150k? Go in at 160k and hope that Zoopla etc. are somewhere in the right region? Very difficult to assess with not many recent sales in the area...
kingston12 said:
Leicester Loyal said:
AyBee said:
But you're not paying that increase in equity, so 90% mortgage means you just need to find £160...
True, but I meant overall. If you only save £1.6k in 10 months but they go up 16k, you'll need an extra 15k borrowed, which might not be possible.Honestly feels like we're in a housing crisis, I ring up for houses that have been listed for 48 hours and they've sold already, I can't get viewings until about a week later, occasionally before I even get to view it someone rings me and tells me it's already been sold so my viewing is cancelled.
The whole situation is making me feel pretty s
t if I'm honest, which is ridiculous as I'm in a fantastic position and 90% of people who don't own a home would give anything to be in my position.That's not the way most people (your 'competition') are looking at it though, they are happy to pile on as much debt as they can, because it's cheap to serve and likely to remain so.
I sympathise completely with you, because I think that you are looking at it the 'right' way, but the market will move on because others don't think the same way. We'll reach the top of current borrowing limits before too long, so expect another announcement from Boris and Rishi about what they are going to do next at some point before then...
You've got to look on the bright side, though. I can't find the post now, but someone recently posted on this thread something along the lines of 'Housing is a rigged game, but that just means it pays to be playing'. I agree with that. It is crazy what has happened to house prices, but it doesn't mean it won't happen again. In fact it makes it more likely.
I.e. with our measly household income, we can borrow £300k, we are looking at properties ~£450k, therefore if prices rise by 10%, our salaries are not, we can still only borrow ~£300k but have to find an extra £45k. Definitely 1st world problems, but starting to feel a little trapped in our current place.
Edited by Rob_125 on Tuesday 2nd March 19:55
Rob_125 said:
Therefore if prices rise by 10%, our salaries are not, we can still only borrow ~£300k but have to find an extra £45k. Definitely 1st world problems, but starting to feel a little trapped in our current place.
Depends what your current place is worth - you only need to fund 10% of the amount you are upsizing by (i.e. if you sell a £350k place to fund the £450k place you 'gain' £35k of the £45k in equity). Also you are assuming zero correlation between whatever you hold your savings in (stocks and shares?) and the housing market.z4RRSchris said:
2015-now we have seen some prime property classes take a 20-30% hit, and in real terms stagnant has seen a drop but what i never appreciated was the blind depths the gov would go to to support the market.
They do need to support it though, what else there is ? I mean very basic layman's terms/calculation, when you upgrading to a new property, basic transaction includes; Estate Agent, surveyors, brokers, removal company and solicitors.. One transaction supports at least 5 different jobs in 4-5 months periods, and this is without the upgrades or building works. People would be encouraged to do it more often, if there was a slightly less "punishing" stamp duty below 900k purchases or 2nd homes.. Thanks to Maggie, residential property was made significantly more attractive as an investment since the 1980s...
Prices do seem to be getting a bit insane - I was worried when we put an offer in for our current house (Cheshire) earlier this year that it was well above the ceiling for anything else on the road given nothing had sold for a good few years...but since then, 2 houses have gone for £20k and £140k more than I paid (all 4-bed semis), so I'm now slightly more relaxed 
With the market moving so quickly I do wonder about what process people who are actually buying have followed - it almost feels as though there is no choice but to buy sight unseen (maybe if you are really lucky a "virtual viewing").
It feels mad to spend less time deciding on a house than some of us do on a car.
It feels mad to spend less time deciding on a house than some of us do on a car.
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