Property crash?

[EDIT: this thread split out of the "Computer whore" thread that had gone completely off topic ]

Property Crash?

Ain't gonna happen, the bank of England has already speculated that interest will be back at 4% by February.

Slow up for sure, but not crash.

 

February which year? A lot of economic forecasters are predictring there's one more rise to come this year which would take them to 5%. Theres no way they will then be cut 1% by Feb 2005.

House prices are already falling where we are......

 

Fact is, nobody, least of all economists, knows if there will be a crash. I hope there is one (not a popular view I know), maybe people will then learn the lesson that should have been learned in the 80s. Inflated property prices do nothing but fuel personal debt.

-- Ian

 

Not in my part of Berkshire they're not. Slow maybe, but certianly not falling.

My predicition is for a "mini-crash" (5-10% maybe - that will cover the rises that took place over the last 12 months) and then they will continue upwards and skywards. After all, people have been predicting a crash for the last 3 years now and if I'd bought something 3 years ago I wouldn't have the struggle I have now to get on the property ladder!

 

Me too. High property prices do nobody any favours in the long run.

 

Levelling off and 'Housing Crash' are significantly different things and I don't believe anyone thinks we are heading towards another Thatcher nightmare.

If housing prices are falling perhaps its a healthy injection of common sense!

We are trying to sell our flat at the moment and it has been very quiet just getting people through the door, but in four years we hope to make a bit of profit, however some of the house prices round here are just silly.

Housing prices in the South still rose last month, so as I say perhaps common sense kicking in.

I just don't understand why people choose to buy (Or not to) based on if interest is going to rise quarter of a %, surely its inevitable its going to move one way or the other, no one would ever buy a house with that attitude. We had a girl round who rents one of the flats we are in. She really wants to get on the ladder and loved our flat, she looked at it 3 times before deciding against because her mates told her there would be a housing crash. So she is holding on for another 6 months. In my book thats another 6 months of rent paying which could have gone to a mortgage, at worse I don't see prices in our area dropping by more than a few % in the next 6 months.

Rant over (just want to sell our flat so we can move back to Salisbury!)

 

there are a lot of problems currently. things like people borrowing against all the sudden equity they have in their house. first time buyers having to mortgage their souls in order to get on the property ladder (or just refusing to). to me at present the housing market seems to be a castle built on air (or at least sand) - a strong top but lousy foundations. something is going to have to give but not before the next general election
cheers


julian

 

house price increases are only good if a) you buy and sell propert, b) you have paid off your mortgage and plan on down sizing or c) you want to sell off the house and live in a field counting your money, or d) you move oop north from daan sarf.

house price increases are bad if a) you want to buy a house.

 

I wish people would just treat a house as somewhere to live and not an investment. The English obsession with property values is very sad.

As lAmBoY said, house price increases don't really make the average owner any richer. If they stay put, they can't realise the extra value and if they want to move, the house they're moving to has generally gone up by a similar relative amount. The people who do benefit are those moving abroad, south -> north, etc. and all that does is fuel an equally useless increase in values in those new areas (to the detriment of most people living in those areas as prices are driven up beyond the reach of most of the locals).

Michael.

 

It also runs very deep and goes back a long way, so is very unlikely to disappear anytime soon.

 

Prices are rising across Europe now and I blame the English obsession. More and more people are cashing in on UK prices and buying cheaper properties abroad to start the same trend there.

 

I'd say its more to do with free market economics, supply and demand and the lack of quality, affordable rental property in this country compared to the rest of Europe.

 

I think the fact that more and more homes only have 1 or 2 people in, and yet so much housing is 3-4 bedrooms.

Partly due to an ageing population I would say, the increase in divorces/seperations and people living alone in their youth for longer periods than they used to.

Of course builders make more money with many bedroom executive houses on small plots than they would with a 2 apartment building on the same plot. I worry that this massive new-build housing plan is going to mean a lot more 3-4 bedroom homes, and wont make a huge difference in the long run.

What do people think this 500,000 home building project will mean to existing housing prices in the areas? Up / Down or the same?

What about the lack of plans for supporting infrastructure? Will this affect the housing prices when the roads are chocka even more than they are now?

NB
I see nothing wrong with tracking housing prices, if you'd spent 200,000 on your car and it went from 50,000-250,000 in value over the years you would watch the markets like a hawk too.

 

Gary

its a regional thing i think.I have moved from Surrey,and i dont think a lot will happen there,but where the 250k stamp duty 3% limit is important,i do think there will be a correction next spring.Many houses here burst through that barrier and are totally over priced,they will come down at 15%,many have been on the market for months and prices are already falling,some as much as 20%

those houses that went to 280 instead of 250/260 will come down,thats what we are counting on

 

Don't blame the English, blame Gordon Brown for making all forms of saving, short and long term, unattractive. Not an issue for him, Tony Blair and all the others of course since they have unfunded pension schemes worth millions.

Paul

 

they deserve it doing those jobs,its not worth all the tea in China imo

 

That's right Paul, I forgot that the English obsession with property prices and using property as an investment didn't start until Labour came into power in 1997. Must have been something else that caused the property boom (and subsequent crash) of the late 80s

Michael.

 

That was triggered by government action too. But this one was avoidable, and deliberate. Government policy is consistently anti private saving.

So why do you think pensioners should be paying rent? To keep them dependent on the state?

Paul

 

Where did I say they should?

Michael.

 

hooom , personally, I think apart from landlords, people should be limited to one house, houses are not a commodity for getting rich at the expense of 1st time buyers. I think its also to do with younger and younger people wanting houses, so perhaps raise the age of ownership till 25?

I am aghast at the chancellors' policy...prudence??? 1st thing they said when they came to power was 'end to boom and bust economy', massive borrowing, record credit debt, huge mortgages, remotortgaging, this govt. for some of the great things it has done, really has put the uk economy in a massively dangerous position...rising oil prices, all we need is that to cause a world wide recession, and people would be shafted, I hope that happens to the property investors at least.

How can you have a society, who's most valued members...nurses, teachers, firemen, binmen, (try living without these for a week, and see who is more important, Robbie williams no contest) getting 20,000 a year can't even afford a flat...its a disgrace. And there sadly is little such thing as the freemarket, the whole economy is awash with price fixing everywhere, just look at the oversupply of goods, shops chock full, they should be giving them away.