House Price Crash Coming?
Discussion
bogie said:
Drezza said:
m3jappa said:
How the f
k does anyone who hasn't inherited money who is still low down or not on the ladder ever get close to even be able to borrow that amount of money et alone pay it back.
Outside of London, is it really that hard to buy? Can get a house up north for £150k, that's £15k deposit. Not too unobtainable by any means. Still higher than it should be, but not difficult with an average salary job even without any help from mum and dad. People just need to be better with money and less picky where they live. k does anyone who hasn't inherited money who is still low down or not on the ladder ever get close to even be able to borrow that amount of money et alone pay it back.Once you get North of Cambridge things start to get a lot more reasonable than the crazy South East.
m3jappa said:
What does amaze me is where i am 7-900k will get something quite nice, not imo anything which is a bit wow. But you jump to 1.2 and all of a sudden the worlds your oyster (within reason), ive seen some spectacular property come up around that and to be fair it has all sold fairly quick.
Every area has it's 'hot' level of the market. Where I am, very standard houses in the 'right roads' go for well over £1m even though similar houses are more like £700k half a mile away. If you can push up above £1.5m, you can buy something much nicer and seemingly have little or no competition in doing so.
Aiminghigh123 said:
We live in Kew, looking to move to a house from a fiat 2 bed flats start around £450k mark. They won’t drop much because they sell quickly. 3 bed houses start at £1.3 mil, very occasionally you get a house pop up for £1.1 mil and it will get an offer within a week. Chiswick, Richmond, Twickenham, Kew etc row upon rows of terrace houses in the millions and if you go to Kensington, Victoria, Pimlico is even crazier which is why a lot of the 3/4 story town houses are converted to flats.
I always wonder if there is a time when some of the smaller houses would start being converted back from flats to houses.I'm a bit further out in Surbiton which is cheaper than those areas mentioned, but still quite expensive in the popular part. There is an over-supply of flats and an under-supply of houses.
Standard 3 bed semis are £1m+, extended ones anything up to £1.5m, but you can buy a 2 bed maisonette for under £500k. Prices of the houses are going up and the flats are going down and if that continues it won't be too much longer before it will be cheaper to buy 2 maisonettes and convert them to a house than it will be to buy a house.
I'm not sure if councils are open to it given their targets to build more homes, but I'd have thought in some of the areas you have mentioned there would already be pressure to do it.
m3jappa said:
I just don't see how anyone under the age of about 25 can possibly get into the vast majority of homes. Actually saying that, they can. they have to save save save and do it as a couple.
Or realise that they can't do it while sustaining an instagram lifestyle documented on their iPhone 15...kingston12 said:
soupdragon1 said:
I'm not sure where you are getting that 'vested interest' in a price drop from. For me personally, I just see so many stars aligning in a negative way, that there is a huge risk. I'm a home owner 17 years and like you mention, I've derisked interest rates by fixing my mortgage for 5 years and then I'm home on a boat. I've no vested interest at all in a crash. But I see trouble ahead, so derisked.
People with a vested interest in price falls are in a different position to you. Some will by FTBs wanting prices to fall so they can get more house for their maximum mortgage multiples, others will be those who want to move up the ladder but need the gap to reduce before they can do so.There will also be the speculators who have sold their home or BTL portfolio in the hope they can buy back in at x% less.
I was just pointing out that I'm one of those also thinking that a huge price fall is highly possible, despite having no vested interest for them to drop, as I most of the way there to having paid the mortgage off.
Just saying that 'doom mongers' like me aren't saying so out of hope- just saying it due to the stormy weather that's brewing.
Pothole said:
Or realise that they can't do it while sustaining an instagram lifestyle documented on their iPhone 15...
ok boomerFor the facts, read this morning's FT:
"It would take a young couple, both on an average salary, 21 years to save enough for a deposit if they put away 5 per cent of their earnings a year. In 1990, it would have taken them just four years"
m3jappa said:
I have been on PistonHeads for many years now and id say every 6-9 months theres a house prices crashing thread.
It still hasn't happened, ok some areas took a hit in 08 and never recovered but houses are still incredibly expensive and seemingly unaffordable.
I just don't see how anyone under the age of about 25 can possibly get into the vast majority of homes. Actually saying that, they can. they have to save save save and do it as a couple.
Affordability is the only thing which will stop them continually going up, i assume a lot inherit money which helps but what about when the next generation comes round? after splitting between the kids and iht there cant be a lot left after a couple of generations.
What does amaze me is where i am 7-900k will get something quite nice, not imo anything which is a bit wow. But you jump to 1.2 and all of a sudden the worlds your oyster (within reason), ive seen some spectacular property come up around that and to be fair it has all sold fairly quick.
I am actually considering in the next few years selling up and buying something special with the inlaws and building them an annex. Its the only way i could possibly even consider some of these houses, and free childcare
How the fk does anyone who hasn't inherited money who is still low down or not on the ladder ever get close to even be able to borrow that amount of money et alone pay it back.
But this threads different It still hasn't happened, ok some areas took a hit in 08 and never recovered but houses are still incredibly expensive and seemingly unaffordable.
I just don't see how anyone under the age of about 25 can possibly get into the vast majority of homes. Actually saying that, they can. they have to save save save and do it as a couple.
Affordability is the only thing which will stop them continually going up, i assume a lot inherit money which helps but what about when the next generation comes round? after splitting between the kids and iht there cant be a lot left after a couple of generations.
What does amaze me is where i am 7-900k will get something quite nice, not imo anything which is a bit wow. But you jump to 1.2 and all of a sudden the worlds your oyster (within reason), ive seen some spectacular property come up around that and to be fair it has all sold fairly quick.
I am actually considering in the next few years selling up and buying something special with the inlaws and building them an annex. Its the only way i could possibly even consider some of these houses, and free childcare
How the f
k does anyone who hasn't inherited money who is still low down or not on the ladder ever get close to even be able to borrow that amount of money et alone pay it back.
All joking aside, those threads were based on 'surely this cant continue!?'
Now we have, surely this can't continue with a ton load of economic issues added into the mix.
Pothole said:
m3jappa said:
I just don't see how anyone under the age of about 25 can possibly get into the vast majority of homes. Actually saying that, they can. they have to save save save and do it as a couple.
Or realise that they can't do it while sustaining an instagram lifestyle documented on their iPhone 15...A bit harsh, BUT the current generation are *broadly* of the "have it now" mindset.
But....even about 20 years ago I was in Germany on an exchange volleyball weekend, and our host told us people there never bought until late 30s early 40s - renting beforehand.
Expecting a 25 year old to be able to afford somewhere in the SE is perhaps stretching things anyway, & perhaps was even 20 years ago.
Other parts of the UK clearly are more affordable, and one positive thing Covid-19 has taught us is that it is very possible to work from home in many ways. Clearly that won't have any immediate help to someone scraping a living with shop or delivery job today, but I feel it will change things over the next 5-10 years.
As a parent, my view is that financial education in the UK is *awful* (non-existent really). I see Martin Lewisa (MSE) has created some sort of course - not looked at it, obviously!
Therefore it is up to parents to try to help shape the understanding that saving at that early period, perhaps by foregoing some of the latte lunches and evenings out, extending phone lifespan, reducing the endless monthly drain of netflix+spotify+prime+<etc, etc>, & instead, to try pop away £50 a month somewhere.
A decent few low cost long-term S&S options available - LISAs for those wanting to buy (eg with AJBell), else S&S ISAs - lowest cost where possible (IM for those here, perhaps Vanguard). When they do get jobs, maximise pension contributions where possible.
NickCQ said:
ok boomer
For the facts, read this morning's FT:
"It would take a young couple, both on an average salary, 21 years to save enough for a deposit if they put away 5 per cent of their earnings a year. In 1990, it would have taken them just four years"
https://landregistry.data.gov.uk/app/ukhpiFor the facts, read this morning's FT:
"It would take a young couple, both on an average salary, 21 years to save enough for a deposit if they put away 5 per cent of their earnings a year. In 1990, it would have taken them just four years"
In March 2020 Average house price was £231k which with a 5% deposit is £12k or 10% £23k.
However a couple buying their first house do not buy a U.K. average house price maybe £120k instead in which case deposit of £6-£12k.
If it takes you as a pair 21 yours to save that up - £23k /21 years means pcm £91.27.
4 years on my suggested £120k & £12k means pcm £250 or £125 per person.
If that’s not possible to do then sorry cut out the £130pcm sky the £90pcm iPhone the £85pcm gym the countless holidays and meals out and pub sessions etc.
soupdragon1 said:
kingston12 said:
soupdragon1 said:
I'm not sure where you are getting that 'vested interest' in a price drop from. For me personally, I just see so many stars aligning in a negative way, that there is a huge risk. I'm a home owner 17 years and like you mention, I've derisked interest rates by fixing my mortgage for 5 years and then I'm home on a boat. I've no vested interest at all in a crash. But I see trouble ahead, so derisked.
People with a vested interest in price falls are in a different position to you. Some will by FTBs wanting prices to fall so they can get more house for their maximum mortgage multiples, others will be those who want to move up the ladder but need the gap to reduce before they can do so.There will also be the speculators who have sold their home or BTL portfolio in the hope they can buy back in at x% less.
I was just pointing out that I'm one of those also thinking that a huge price fall is highly possible, despite having no vested interest for them to drop, as I most of the way there to having paid the mortgage off.
Just saying that 'doom mongers' like me aren't saying so out of hope- just saying it due to the stormy weather that's brewing.
I totally agree about the likely impact of the stormy weather on house prices, but I do wonder how much the government have got left in the tank to support house prices through anything.
This is certainly the biggest test of their resolve so far. It gets bigger each year anyway as house prices move further and further away from salaries, but adding in a significant recession makes things more difficult.
They pulled through it in 2007/8 of course, but house prices in certain areas of the country are way above that level now as are debt levels. It's not as easy as just cancelling interest rates this time...
mikeiow said:
Ha!
A bit harsh, BUT the current generation are *broadly* of the "have it now" mindset.
But....even about 20 years ago I was in Germany on an exchange volleyball weekend, and our host told us people there never bought until late 30s early 40s - renting beforehand.
Expecting a 25 year old to be able to afford somewhere in the SE is perhaps stretching things anyway, & perhaps was even 20 years ago.
Other parts of the UK clearly are more affordable, and one positive thing Covid-19 has taught us is that it is very possible to work from home in many ways. Clearly that won't have any immediate help to someone scraping a living with shop or delivery job today, but I feel it will change things over the next 5-10 years.
As a parent, my view is that financial education in the UK is *awful* (non-existent really). I see Martin Lewisa (MSE) has created some sort of course - not looked at it, obviously!
Therefore it is up to parents to try to help shape the understanding that saving at that early period, perhaps by foregoing some of the latte lunches and evenings out, extending phone lifespan, reducing the endless monthly drain of netflix+spotify+prime+<etc, etc>, & instead, to try pop away £50 a month somewhere.
A decent few low cost long-term S&S options available - LISAs for those wanting to buy (eg with AJBell), else S&S ISAs - lowest cost where possible (IM for those here, perhaps Vanguard). When they do get jobs, maximise pension contributions where possible.
Two of my young (ish - 24 & 26) colleagues were talking about savings and LISAs yesterday at work. They sound like they're going to forego the spend, spend, spend. I didn't even know such things existed, but then I never really felt any pressure to buy property when I was younger. I only managed to afford a deposit because my mother died and left me half a house or I'd still be renting now.A bit harsh, BUT the current generation are *broadly* of the "have it now" mindset.
But....even about 20 years ago I was in Germany on an exchange volleyball weekend, and our host told us people there never bought until late 30s early 40s - renting beforehand.
Expecting a 25 year old to be able to afford somewhere in the SE is perhaps stretching things anyway, & perhaps was even 20 years ago.
Other parts of the UK clearly are more affordable, and one positive thing Covid-19 has taught us is that it is very possible to work from home in many ways. Clearly that won't have any immediate help to someone scraping a living with shop or delivery job today, but I feel it will change things over the next 5-10 years.
As a parent, my view is that financial education in the UK is *awful* (non-existent really). I see Martin Lewisa (MSE) has created some sort of course - not looked at it, obviously!
Therefore it is up to parents to try to help shape the understanding that saving at that early period, perhaps by foregoing some of the latte lunches and evenings out, extending phone lifespan, reducing the endless monthly drain of netflix+spotify+prime+<etc, etc>, & instead, to try pop away £50 a month somewhere.
A decent few low cost long-term S&S options available - LISAs for those wanting to buy (eg with AJBell), else S&S ISAs - lowest cost where possible (IM for those here, perhaps Vanguard). When they do get jobs, maximise pension contributions where possible.
funinhounslow said:
rockin said:
Two comments,
I would disagree with this - housing was certainly attainable in the mid to late 1990s following the crash in the early 1990s - I think something to do with tax relief on mortgages was the cause of that...- There is similarly every 6-9 months a thread saying the stock market is too high and bound to crash.
- These things have never been "affordable", whatever that means.
Anyway as noted we've now seen property increasingly viewed as an investment - this BTL boom with amateur landlords started in earnest in the late 1990s and early 2000s - I also remember issues such as "self certification mortgages" ("liar loans") around that time which is when prices really started to go nuts.
We have now have three "black swan" events - the virus, section 24, and EU exit.
A sharp drop in overseas student numbers plus BTL being less profitable may lead to a number of smaller landlords "throwing in the towel" (if they can afford the CGT)
Once sentiment switches it can be very hard to reverse - again anyone around in the early 1990s will remember this very well. And the government has run out of ammo to prop up the market...
One way or another it could get very interesting this year...
Sentiment - momentum - they are crazy things sometimes. Its difficult to do financial forecasts at the best of times, especially in todays landscape, but its even harder to forecast the human psyche.
The housing market relies hugely on perception of value and it that starts to crumble, there is very little the govt can do.
The stamp duty holiday could actually be a curse on the market as there could be a psychological shift once it ends. People will start rushing through towards the end, we'll hear stories of chains collapsing, banks not signing off loans followed by a natural slow down after the holiday. That could be a trigger point for a reverse in sentiment.
The £ is starting to strengthen against the dollar too, so foreign investment can sell in the short term at the top of the market while getting a double helping of benefit from the recent currency moves. What's 'the cable' forecast? This is just one more star aligning in a negative way.
Since covid started, a property in uk worth £1m was worth $1.15m. Now its worth $1.3m.
How many are looking at that thinking, if the £ weakens again (uk forecasted to be one of the worst recessions globally) then not only are they exposed to currency, they are exposed to a property value drop. With a double whammy staring you in the face - it might be time for some to cash in their chips.
When lots of people want to cash in their chips, it becomes a buyers market. Prices start to erode as people start taking small hits to get their property sold and then it's small hit, followed by small hit and all of a sudden, the trend line swings, and momentum builds, and the negative sentiment gets confirmed.
wormus said:
untakenname said:
The voting demographic is rapidly shifting as older people die and young people can't afford to own housing so political parties will be keeping that in mind for the next election as generally older home owners will vote Conservative whilst younger renters vote Labour so the pro house owner policies we've had for the past 30 years may be coming to an end.
What do you call old? Anyone above the age of 30 who’s made something of their lives will want to keep what they have and won’t want tiny box housing estates on their doorstep.Edited by untakenname on Wednesday 12th August 10:16
By the time you’re 40, have worked hard and maybe have a couple of kids, the last thing you want to do is give it away to somebody else. It’s not just geriatric buffoons who vote Tory as the last election made perfectly clear.
ONS said:
The number of households in the private rented sector in the UK increased from 2.8 million in 2007 to 4.5 million in 2017, an increase of 1.7 million (63%) households.
Younger households are more likely to rent privately than older households; in 2017 those in the 25 to 34 years age group represented the largest group (35%).
Households in the private rented sector are getting older; between 2007 and 2017, the proportion of household reference persons aged 45 to 54 increased from 11% to 16% while those aged 16 to 24 dropped from 17% to 12%.
https://www.ons.gov.uk/economy/inflationandpricein...
Government and BoE policies which are designed to inflate or sustain house prices to the detriment of wider society (historic low interest rates, HTB etc...) will fall out of favour with politicians as they chase votes.Younger households are more likely to rent privately than older households; in 2017 those in the 25 to 34 years age group represented the largest group (35%).
Households in the private rented sector are getting older; between 2007 and 2017, the proportion of household reference persons aged 45 to 54 increased from 11% to 16% while those aged 16 to 24 dropped from 17% to 12%.
https://www.ons.gov.uk/economy/inflationandpricein...
I do wonder about London... What with many many firms now having had a c3mth trial of home working.
I know a couple of big firms that are already planning on reducing their Ldn footprint, people told to expect to be in the office 2-3 days a month. Live wherever you want and get the train in.
Why try and buy in Lnd anymore...
I know a couple of big firms that are already planning on reducing their Ldn footprint, people told to expect to be in the office 2-3 days a month. Live wherever you want and get the train in.
Why try and buy in Lnd anymore...
ThumperMc said:
I do wonder about London... What with many many firms now having had a c3mth trial of home working.
I know a couple of big firms that are already planning on reducing their Ldn footprint, people told to expect to be in the office 2-3 days a month. Live wherever you want and get the train in.
Why try and buy in Lnd anymore...
London is special no question it is a historic buzzing hub. I know a couple of big firms that are already planning on reducing their Ldn footprint, people told to expect to be in the office 2-3 days a month. Live wherever you want and get the train in.
Why try and buy in Lnd anymore...
I like that I’m not based in London though am going there (or was) at least 50% of the month. I hate trains and tubes period - but the circle line with its properly working air con that works well. But as a car person I like my car my space my music carrying what I want leave when I want both ways and if I want it icy cold air con or heating up great - also if not feeling great but need to be somewhere driving will be great but sweating cough sneeze runny nose in train or tube isn’t fun.
kingston12 said:
I always wonder if there is a time when some of the smaller houses would start being converted back from flats to houses.
I'm a bit further out in Surbiton which is cheaper than those areas mentioned, but still quite expensive in the popular part. There is an over-supply of flats and an under-supply of houses.
Standard 3 bed semis are £1m+, extended ones anything up to £1.5m, but you can buy a 2 bed maisonette for under £500k. Prices of the houses are going up and the flats are going down and if that continues it won't be too much longer before it will be cheaper to buy 2 maisonettes and convert them to a house than it will be to buy a house.
I'm not sure if councils are open to it given their targets to build more homes, but I'd have thought in some of the areas you have mentioned there would already be pressure to do it.
Yeah agree. I suspect it’s because people moving from the city further when starting families etc. I used to rent in Wapping. 1 bed flats quite easily go for £500k. 2 beds £800k not unheard of. Get 2 city workers on £100k plus each want to start family but still want access to city and the area you are in is perfect. I'm a bit further out in Surbiton which is cheaper than those areas mentioned, but still quite expensive in the popular part. There is an over-supply of flats and an under-supply of houses.
Standard 3 bed semis are £1m+, extended ones anything up to £1.5m, but you can buy a 2 bed maisonette for under £500k. Prices of the houses are going up and the flats are going down and if that continues it won't be too much longer before it will be cheaper to buy 2 maisonettes and convert them to a house than it will be to buy a house.
I'm not sure if councils are open to it given their targets to build more homes, but I'd have thought in some of the areas you have mentioned there would already be pressure to do it.
Aiminghigh123 said:
kingston12 said:
I always wonder if there is a time when some of the smaller houses would start being converted back from flats to houses.
I'm a bit further out in Surbiton which is cheaper than those areas mentioned, but still quite expensive in the popular part. There is an over-supply of flats and an under-supply of houses.
Standard 3 bed semis are £1m+, extended ones anything up to £1.5m, but you can buy a 2 bed maisonette for under £500k. Prices of the houses are going up and the flats are going down and if that continues it won't be too much longer before it will be cheaper to buy 2 maisonettes and convert them to a house than it will be to buy a house.
I'm not sure if councils are open to it given their targets to build more homes, but I'd have thought in some of the areas you have mentioned there would already be pressure to do it.
Yeah agree. I suspect it’s because people moving from the city further when starting families etc. I used to rent in Wapping. 1 bed flats quite easily go for £500k. 2 beds £800k not unheard of. Get 2 city workers on £100k plus each want to start family but still want access to city and the area you are in is perfect. I'm a bit further out in Surbiton which is cheaper than those areas mentioned, but still quite expensive in the popular part. There is an over-supply of flats and an under-supply of houses.
Standard 3 bed semis are £1m+, extended ones anything up to £1.5m, but you can buy a 2 bed maisonette for under £500k. Prices of the houses are going up and the flats are going down and if that continues it won't be too much longer before it will be cheaper to buy 2 maisonettes and convert them to a house than it will be to buy a house.
I'm not sure if councils are open to it given their targets to build more homes, but I'd have thought in some of the areas you have mentioned there would already be pressure to do it.
Confuses every delivery driver... why the road numbering on their side starts at 8
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