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If the price of your house fell by 35% would you be screwed

(48 Posts)
Twiglett Tue 18-Sep-07 18:11:48

10% chance of a house price crash like the 1990s I don't believe this is going to happen though

But I think we forget that it happened in the early 1990s ... "In the last housing market crash, average prices fell by 35%, adjusted for inflation, from their peak in 1989."

so would you still have equity if your house price crashed that much?

UCM Tue 18-Sep-07 18:13:24

If my house fell by 50% I wouldn't be screwed thank god.

However, if your house should fall in price, you need to think about it this way. You need it, it's your home, in 10 years it will be back up there.

It's only on paper after all.

CountessDracula Tue 18-Sep-07 18:13:50

yes

In fact it would still be worth more than we paid for it 4 years ago and we thought it was blardy expensive then

Twiglett Tue 18-Sep-07 18:15:10

we're also in a very fortunate position (through luck really) and you're quite right UCM

Isababel Tue 18-Sep-07 18:15:54

Yes, but as I have no plans to sell it, even if the prices crashed it wouldn't affect me.

tissy Tue 18-Sep-07 18:16:41

no, am not planning to move again, except to my old folks home when I'm demented and dh is dead grin. Not a problem, unless you either can't pay mortgage, or need to sell and move.

Sobernow Tue 18-Sep-07 18:16:47

Message withdrawn at poster's request.

Boco Tue 18-Sep-07 18:18:36

I read things like this with my fingers in my ears, singing loudly and concentrating hard on something fluffy and safe, like happy little rabbits in a field.

<<la la la la la laaaaaaaaaaaaaaah>>

TellusMater Tue 18-Sep-07 18:19:41

We would. Our loan to value ratio was the only good thing on the mortgage papers when we bought our house hmm

PrettyCandles Tue 18-Sep-07 18:19:53

Unless you're planning to sell in the near future, the value of your house doesn't matter too much. What makes more difference to people is if the interest rates rise to a level where they can no longer afford to pay their mortgage.

funnypeculiar Tue 18-Sep-07 18:20:27

Perhaps a little buggered grin
We're London 'burbs, and will probably move futher out at some stage - to somewhere likely to fall less, I presume.

TellusMater Tue 18-Sep-07 18:20:28

That is true...

Wisteria Tue 18-Sep-07 18:21:12

No, not screwed but very pissed off as I put all my savings in and they would effectively be wiped out (well, I'd be left with £5k), don't forget it's all swings and roundabouts though, as when/if you sold, the house you would be buying would also have dropped IYSWIM.

Negative equity is only a massive problem if you have to sell, sit tight and wait if you can, as things generally right themselves within 10 years.

We will be struggling from November though as our fixed rate motgage ends and the interest rates have hiked so bread and butter to eat and no wine for a bit methinks sad

PandaG Tue 18-Sep-07 18:21:29

no - we also have no plans to move, and have been here 8 years, so even if ther was a 35% drop the house woiuld still be worth significantly more than we paid for it.

DaphneHarvey Tue 18-Sep-07 18:22:09

Not screwed - just irrationally a bit wistful about the money we'd "lost" even though we never really "had" it in the first place iyswim.

Tutter Tue 18-Sep-07 18:22:19

<currently renting>

[smug]

chocolateteapot Tue 18-Sep-07 18:23:42

We would be fine but I do know people who would be somewhat up the creek eg. my friend's neighbours who want to sell up, buy a small flat in the UK then go and live in a caravan in France living off what they hope to be their equity. And my friend who has just bought a house, is planning to extend it, sell it and with what is left.

pooka Tue 18-Sep-07 18:25:13

No - wouldn't be srewed. IN fact, would be in a pretty good position WRT to moving to a bigger house.

MintyDixCharrington Tue 18-Sep-07 18:38:17

if it fell by 35% my house would still be worth about £300k more than I paid for it 5 years ago
so no

Roskva Tue 18-Sep-07 18:40:43

We're lucky - we wouldn't be screwed. Though dh would be mightily peed off about 'losing' money, like DaphneHarvey.

expatinscotland Tue 18-Sep-07 18:42:53

No because we rent the house we'll be in.

He bought it for peanuts back in the mid-80s and has no mortgage.

norkmaiden Tue 18-Sep-07 18:43:02

ditto Pooka. A fall would help us quite a bit wrt to moving to a better house.

Pruners Tue 18-Sep-07 18:44:08

Message withdrawn

UCM Tue 18-Sep-07 18:44:25

Minty, <can I call you that>, what about the subsidence problems dahling grin

SlightlyMadSweden Tue 18-Sep-07 18:45:15

If my house fell by 35% it wouls still be worth double what we paid for it and more than double (just about) the outstanding mortgage.

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