Ive heard on the radio a few times about the possibilty of a house price crash in the very near future.

There was a couple of economists banging on about it the other day saying that theres a good chance it will happen soon.

What are peoples thoughts on this?

 

Much as i would love it to happen, i'm not sure as theres still a big demand there.


It so hard to predict house prices, i been trying it for last two years and never been right

 

They keep saying it my view is that wont happen
and if the want people to own houses the secound house should not be avaliable unless over £250k or even £300k
so people have a chance to by the 1st house

 

I dont think they will ever crash. Percentage increase may slow down or more or less stop for a while but we wont be going backwards. I bloody hope not anyway I got two and just about to buy a third house

 

RS Ben
fookin hope not too!!

 

While there is demand, there will always be a price to pay.

Prices may on the whole go into a slight decline, but we will not see ANYTHING like in the 1980's.

 

hope there is cos its the only way we will ever get on the property ladder tbh

give it 5yrs and hopefully theyll have come down or levelled off a bit

 

wont happen, they'll level off, or dip very slightly, demand is high and will always will be.

 

Why ?

The problem is actually much more serious than the 80's.....

 

Because the current government cannot afford for it to happen.

trust me on this one, i may not be an estate agent, but im VERY close to the industry

 

the decline is already starting, a family member of mine bought a house 1.5 years ago for £190 k its been on the market for 5 months now for 190k and the estate agent has said it could probably do with another 10k knocking off it for a "quick sale" , at the end of the day people CAN'T buy houses if they cant afford to live.

 

So what the government going to do - abolish income tax so everyone can afford to buy a house ?

Plus the bank of england are in charge of interest rates and I reckon slowly but surely they will increase them over the next 12 months.

Plus there is the fact the averagee joe has fucked his or herself financally with debt, so regardless of the interest rate I can't how there cannot be a problem at some point.

 

Seems to depend on area and price. I sold my 2 bedroomed terraced house 2 months ago for 40k more than i paid for it 3 years ago in sunny essex. Sold in 3 days as well!

People were saying there had to be a price crash soon before i bought 3 years ago but prices have continued to soar.

I think it will level out but cant see it crashing.

 

The Spanish market is already fucked. And how many English people have second homes out there? There will be at least some effect over here simply because of that.

 

My parents are currently moving, they got a 70k profit on our titchy old 2 bed, and the estate agents have said about this crash, they said they expect it to last for 10 years

 

No......You won't get a house price crash. NEVER.

Annual Percentage Profits may not be what they have been, and the price rise will slow down a little, but they'll never crash.

REASON : Not enough houses for people as it is, so demand will keep them on the rise (Maybe not as much rise as previously, but they won't go down in price)....plus lots of Europeans moving to the UK, will keep the prices going up all the time.

Demand causes house prices to rise or fall, and at the moment the demand is for more houses than we currently have.

Get on the housing ladder as soon as you can.

In ten years I've made over 100k........that's 10k profit every year, and the best investment you can ever make.....Forget Stocks & Shares, get into the property market, at whatever price you can afford.

 

It's not really profit though, as the house next door will have gone up by the same percentage, also like the house in the next street, town, county.. etc.

Whilst CPI was down to 2.5% in May, core inflation (less energy, food, tobacco, etc.) was up from 18 to 1.9.

This shows the headline inflation figures spouted are being thrown out by large swings in energy, etc.

With this in mind I think interest rates will definitely hit 6%

Also, there are a lot of new mortgages which had a few years at a low level, even below base. Many of these will soon be expiring, and repayments on a typical mortgage could jump by £100, possibly more.

Larger repayments on already tight budgets, coupled with people cashing in on second homes / investment properties, could mean supply increases fairly rapidly.

Demand may be high, but this will fall if house prices are dropping...... as your house will be worth less than you paid a week after purchase

This bubble is so much larger than in the 80s, I don't beleive the country has gained in wealth sufficiently to sustain these high prices.

The above view generalises the UK market. Central London is an exception.

Quick edit due to above post: Yes we do have high immigration driving prices. However, I can't see your average immigrant going straight to their nearest Foxtons and purchasing a £250k semi...

 

I think it depends on what value your house is. There will always be a strong market for the lower price houses.

Smudge

 

I've been asked his day in day out for the last 10 years.. the simple answer is.. there is no answer..

People have been 2nd guessing the market for years, some getting it right, some selling their houses and going into rented then not being able to buy the house they used to have as it has gone up so much!

I can see possibily we will become like parts of Europe like Germany and Switzland where most people rent untill they inherit or become well off enough to buy. Lets face it with people getting interest free mortgages etc Your pretty much renting anyway.. untill it goes up in value and you have some equity but even then you still have to cover moving costs if you want to sell.

 

You owe me then on your 2nd move!

 

Can I pay you in sexual Compliments?

 

YEAH BABY!

I'm off luxuries this month!!

 

Read that again and then have one of these....

 

ROFL!

Where do I get me one of those Paul?

 

Interest only


My god can you imagine having a interest free Mortgage!

 

No sign in it slowing down up here whatsoever

my flat is now worth twice as much as i paid for it 3 1/2 years ago

only prob is the bloody houses are twice as much to

 

For a moment, I was thinking "where the fcuk can I get one of those..?!"


I agree with Jim. Its not a case of can you afford to buy, its can you afford not to?

 

i think something will happen to the housing market, dont think a full on crash like in the 80`s tho, i think the prices will drop to a sensible level.
At the mo, i cant afford to buy, got 3 kids so would need a 3 bed house, and they go for around £200k round my area, and im on 20k a year, so do the maths and im no where near getting a mortgage. i have been offered 90k mortgage, so trying to save up £110k is near on impossible. i would be retired before i got the moey. And at the mo, the longer you wait the more the price keeps going up.

You have to be on a good wage and live in the right area to buy now IMO. Fair play to anyone getting on the market, if i could i would.

my advice is, if you got the chance to buy, do it, even if your young, best thing you can do.

Oh also, all these people say, i have made XX amount on my house in some many years. This is balls really, yes you may have, but you sell up, go buy another house, bet the extra money you have made goes straight on the new place as the house price has also gone up on the new house.
the only way you will profit, is if you are selling your second house, or moving to a small place. But it does make me laugh when people say., i have made £15k in 3 years.

 

sounds to me like ALOT of scaremongering going on.

 

Obviously no one knows for sure what will happen. Ive just noticed quite a few houses on my estate that have been for sale for ages now, with most being for sale for over 6 months now.

 

most people are up to there arses in debt and also lots of companies are downgrading. laying people off ect

when you loose your job and need to get another job that pays less and interest goes up thats where the problems start

the people affected though are the fool who took a 5 times morgage and no deposit and furnished it with credit cards and expect houses to go up at 10% each year

londons house prices aint moved much and the high end propertys are not selling so being knocked down/remodeled into flats ect to sell on


the governement are NOW looking at solving the problem,, this is gonna affect it and they are looking at using green belt land to help relive the issue

the reason for the growth outside london is the businesses have moved out of london due to the parking issues/high rates/rents/congestion charges ect

though this will REDUCE the wealth in the area and make a rich poor devide in london more than it already is


there WILL be a crash though which is where prices start to drop alot and thats when the interest rates go up and big company close the doors of firms

look at the problems ford has,,,, there SERIOUS too,, TVR,, look at other companys too struggling for business

we are gonna get it at some point,, dont hide from the fact,, the money in property was always pointless anyway

i was gonna sell my 2 bed in central london,,, tryed to sell up and buy a house out of london,,,, i made a bit of cash from it but i STILL would cost twice as much as i pay now when you include the travel costs/ moving costs ect and i would have a crap location to what i have so i stayed in my dingey flat in central london paying 270 quid a month morgage

 

really fucks me off this does how the fuck can i afford to get on the ladder even if i get a loan for 5 times my wages wots that going to get me a one bedroom flat in a shit hole even then i will have no money to live on for fuck sack something has got to give

 

you also forgot that you wont make any money on it as even though the house prices rise, you will be paying 30% more interest anyway

meaning that its cost you with interst what its worth over time as the market slows down ect

may aswell rent and not have to pay for bills to repair the place and worry about having to sell it on ect


unless you pay 50% income on the morgage at 3 to 4 years wages they it aint worth it these days IMO

 

the only way is up,Historicly speaking of coarse.

 

survey done by a company that does morgages,,,, strange that aint it

base it on areas and then look

 

Interesting topic. As has been said no one knows what will happen but as long as they keep pushing them interest rates up im happy. Im in a position to by a small house but with the way things are going im holding off, weather this is for the best no one will know can't bring myself to buy tho incase there is a price correction over the next couple of years, if i can't afford to buy in 2 years time, who will? There will be a correction just when.

 

It scares me, but as long as it does it now, and goes back to normal within the next 2yrs then I don't care as I'm fixed rate till April 2009

 

Ive been in my current place 9 months and next door to me have sold their's for a 15k profit so im well chuffed (new apartment's)

people are right that other properties are going up aswell so your not making anything as you have to spend it again, but if your clever you can buy in developing areas which are going up in rate more than the national average.

People who purchased apartments in B'ham city centre have made 100-150k profit on 2 bed apartments in about 5-6 years due to a development boom.

A work mate of mine has made 60k on a 2 bed pad in a development called Park central in 2 1/2 years which is bloody good going.

Ive heard through the grape vine that Northampton is a place where alot of sensible money is going currently. Thinking of buying a place off plan in that area myself and letting it out on completion?

Also national builders are always willing to do you a bit of a deal on places if your cheeky enough to ask. I got 5% taken off my place, carpets, and a grand cash back on completion, if i put a small deposit on it their and then just by giving them some story about me prefering another development and thinking of spenging my money with them instead.

Jamie

 

I keep reading everywhere that their will be a rise in interest by 2009 that will effect the market, it seems like it doesn't need to go up much to effect people in a serious way, with wages remaining the same it only takes another £100-£150 per month and alot of people are then dipping into their living money.

I will soon be joining the RAF with my other half so theirs a chance we will get housing which will give us time to put a serious deposit together when we get settled in a permanent location.

 

I dont think interest rates will go up much more. I think 6% will be upper limit of what's needed to bring inflation back to target. The problem is interest rates effect everything not just house prices so it's too blunt a tool to control house prices. At the moment demand for houses is strong so prices will continue to rise i believe and only stable off in the future, not actually crash. My advice to anybody waiting a couple of years to see if prices dip is buy now. Just ride out any dip that does happen and 2 years down the line you'll be back into profit. But if you delay 2 years could end up paying another 5-10%... It is a gamble but buy now you wont really lose anything, buy later you could end up paying more