House Price Crash Coming?
Discussion
What's the consensus on house prices?
We were looking at potentially moving but if we're heading for a deep recession with 7m unemployed I can't see prices rising in the near future and if it's anything like the banking crisis we could see a bit of a crash.
We're in a 3 bed detached valued ~£215k and been looking at 4/5 beds in the same general area but they're up at ~£350k at the moment. They're selling while the SD holiday is on but once that's done and dusted I'm anticipating a huge drop in demand and possibly a drop in prices of ~15%.
Fag packet maths say presently we'd need to bridge £350-215 = £135k which seems ridiculous for a little bit of extra space when we can adequately cope where we are for now.
If the market were to drop 15% that would become £298-183 = £115k. SD of ~£5k =£120k gap to bridge.
Nobody has a crystal ball but the thought process seems sound. What do you reckon?
We were looking at potentially moving but if we're heading for a deep recession with 7m unemployed I can't see prices rising in the near future and if it's anything like the banking crisis we could see a bit of a crash.
We're in a 3 bed detached valued ~£215k and been looking at 4/5 beds in the same general area but they're up at ~£350k at the moment. They're selling while the SD holiday is on but once that's done and dusted I'm anticipating a huge drop in demand and possibly a drop in prices of ~15%.
Fag packet maths say presently we'd need to bridge £350-215 = £135k which seems ridiculous for a little bit of extra space when we can adequately cope where we are for now.
If the market were to drop 15% that would become £298-183 = £115k. SD of ~£5k =£120k gap to bridge.
Nobody has a crystal ball but the thought process seems sound. What do you reckon?
That's my thinking. The SD holiday is doing its bit and people are buying those £350k houses now to save ~£7k but it's a false economy if the arse falls out of the market in nine months' time.
I'm content with the gamble of staying put for now and saving up as much as possible in the interim.
I'm content with the gamble of staying put for now and saving up as much as possible in the interim.
Prices firming up and even rising slightly around here.
All those who have discovered WFH are now looking at their small, cramped London flats and comparing to what that’ll buy them an hour outside London where they can have a proper home office, a garden and more space and still be commutable into town for the once or twice a week they may have to visit the office.
All those who have discovered WFH are now looking at their small, cramped London flats and comparing to what that’ll buy them an hour outside London where they can have a proper home office, a garden and more space and still be commutable into town for the once or twice a week they may have to visit the office.
But will wfh be here longterm?, I don’t think it will several companies have come out and said they want people back at the office and what people don’t seem to be grasping with wfh is that if you can work from 200 miles away someone in Bangladesh can do your job as well for a third of your wage.
s1962a said:
What does a crash mean? 15% off peak London prices, with variances around country? Wasn't that what happened in 2008/9?
Adjusted for inflation house prices are just about back to where they were 10 years ago anyway nationwide data below, blue line clearly shows the boom years
No crash too much demand low interest rates wfh and increasingly folks want bigger with reasonable gardens.
Folks have been forcasting a crash for years lol.
If you can't time the market with equities and to a lesser extent cars then no chance with the illiquidities of property.
Folks even experts were forcasting used car prices even high end to tank this year yet the opposite happened and then some lol.
Folks have been forcasting a crash for years lol.
If you can't time the market with equities and to a lesser extent cars then no chance with the illiquidities of property.
Folks even experts were forcasting used car prices even high end to tank this year yet the opposite happened and then some lol.
There’s already a pretty extensive thread on this subject running:
https://www.pistonheads.com/gassing/topic.asp?h=0&...
It’s been trying (and failing) to reach a conclusion for quite some years.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
It’s been trying (and failing) to reach a conclusion for quite some years.
Your fag packet maths assumes any rise of fall will impact equally on the house you have and the house you want. That’s your first problem as that is almost certainly not true.
If you’re using this amateur forecasting to identify whether you should move or not then bluntly you are a fool. How will you feel if you stay where you are because you’re too scared and in 12 months time the gap is greater?
As with any investment the past is no indicator of future performance and you may win or lose. The biggest loser though is the one sitting on the bank of the river waiting for the cheaper fish that may never come
The issue in your post is this though
[quote] which seems ridiculous for a little bit of extra space when we can adequately cope where we are for now
[/quote]
Sounds like someone else is suggesting the move and you’re looking for some “evidence” that you shouldn’t because you don’t want to
If you’re using this amateur forecasting to identify whether you should move or not then bluntly you are a fool. How will you feel if you stay where you are because you’re too scared and in 12 months time the gap is greater?
As with any investment the past is no indicator of future performance and you may win or lose. The biggest loser though is the one sitting on the bank of the river waiting for the cheaper fish that may never come
The issue in your post is this though
[quote] which seems ridiculous for a little bit of extra space when we can adequately cope where we are for now
[/quote]
Sounds like someone else is suggesting the move and you’re looking for some “evidence” that you shouldn’t because you don’t want to
Edited by craigjm on Tuesday 11th August 17:03
I guess it depends where you are in the country. During the last "crash" - 2007/2008 - my area (home counties) saw a minor reduction where, at the time, I thought £250k was a lot for a 3 bed 1930s house. Houses that were 270K went down to 250k. Those same houses are now "worth" 500-550k and I remember they quickly recovered (2010 - I remember being valued at 335k).
I think we will see some minor house price corrections (circa 3-8% depending on severity) but they will recover and continue an upward trajectory albeit in small percentage terms. There is no shortage of buyers at the moment and many are losing their jobs, but many more have kept their jobs too.
I think the earlier poster made a good comment - if you move 200 miles away your job could be outsourced to cheaper areas - not always true but perhaps for process driven work in offices. However for that reason I think areas surrounding employment capitals will contiune to be desirable places to live and since we have a supply and demand problem I don't think we will see huge reductions on house prices.
If we did the financial world as we know it would be collapse. So for the OP - if you need to move, feel confident in your finances then make the jump. That advice would be the same whether in a pandemic or not.
This also correlates with reports we recieve at work as one of our major income streams is real estate.
I think we will see some minor house price corrections (circa 3-8% depending on severity) but they will recover and continue an upward trajectory albeit in small percentage terms. There is no shortage of buyers at the moment and many are losing their jobs, but many more have kept their jobs too.
I think the earlier poster made a good comment - if you move 200 miles away your job could be outsourced to cheaper areas - not always true but perhaps for process driven work in offices. However for that reason I think areas surrounding employment capitals will contiune to be desirable places to live and since we have a supply and demand problem I don't think we will see huge reductions on house prices.
If we did the financial world as we know it would be collapse. So for the OP - if you need to move, feel confident in your finances then make the jump. That advice would be the same whether in a pandemic or not.
This also correlates with reports we recieve at work as one of our major income streams is real estate.
croyde said:
Anyone think the rents in and around London will drop?
Because currently I have no idea how anyone affords them. I really struggle and I'm on reasonable money. Well above average.
Unless WFH takes off and central London empties out, I doubt it.Because currently I have no idea how anyone affords them. I really struggle and I'm on reasonable money. Well above average.
Given the capital value of London property, seems like a bargain to me that you can rent it for c.2% gross yields
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