Property Crash

[Etiquetteworry]

I'm is there likely to be a huge crash in the property market? Looking at the news last night it seems we're heading for a recession. Am I mad to be looking for a more expensive house at present?

[Rightmovenewbie]

If you can afford it then go for it. There’s lots on rightmove and (I think this has been done already) but you might he able to get a good deal atm ?

[AGreatUsername]

A property crash only matters if you’re planning on selling again in the next few years. Also, I don’t think they’re predicting this to be as bad as the 2008 crash, it’s likely to be short and sharp if anything at all.

If you’re planning to move to a long term home it’ll make not much difference to you, even with only 10% equity that needs a 10% fall in prices to mean negative equity, which is quite a drop.

[Burgundy1844]

Agreed if it’s affordable and a longer term home then I’d go for it!

[pilates]

If you are going to be there long term I think you’ll be fine.

[Cluckycluck]

We are also going to be buying a more expensive house and after speaking to various advisors they are expecting there to be some crash but not by the standards that have been seen previously.

If you want to move and find a house you love go for it, I don't think you should wait and pass up a property you love especially if plan on staying there for a while.

[ThroughThickAndThin01]

We need that crystal ball. Personally I don’t think there will be a crash, the froth might disappear from the prices. If you are in it for the long term and have job security, I’d go for it.

[Burgundy1844]

We bought our house in ‘08 just into the financial crash and had the same worries as you. We’re still here and glad we did.

[notheragain4]

I'm moving, I need to upsize so I'm cracking on. The property market seems pretty busy from where I'm looking, we sold (and had a further offer) the day viewings were allowed to happen. We've reserved off site and the estate we are looking at has sold a further 4 houses this fortnight. I'm not worried about my own personal circumstances as we are both in very secure jobs.

[billysboy]

I cant see how there cannot be a downward trend with a huge worldwide recession looming, job insecurity etc etc
There will always be a forced sale around but lets see where we are in 6 months for this to really feed in

[Glendaruel]

Think you have to look at location. We're currently looking at getting a larger property but we know in this area there is a major employer who isn't going to be impacted by recession and previously it's been in a bubble. You can also look at how much house prices have jumped, and take that into consideration

[Pipandmum]

Don't see it. Houses coming on and properties that were on are selling at similiar prices according to a real estate agent friend. The headlines of 'biggest drop in 11 years' refers to 1.7% over a month when hardly anything was selling and that's not a big figure anyway. Though it will take a few months to see the real picture, with interest rates still so low it won't hit the property market like recessions have previously.

[AJPTaylor]

If it's like previous recessions it will only be a buyers market in theory. Most house sales are people wanting to move, not having to. All those that don't have to move, won't. Which means that it will be difficult to find a house you actually want to buy. Older people planning on downsizing will simply stat put and wait for the market to recover and this stops the "upward chain".

[rabbitcarrot]

Hold on this moment, wait till November, December, once furlough is finished, mortgage holiday is over, Brexit transnational period ends, see how badly impact on the job market & economy, house market will reflect that high unemployed rate, tough economy climate, loads business closed etc..

Be patient, March & April 2021 we can see the true picture of all these effects. Recovery economic will take time, it's not like some people predicted bounce back like "V", under global recession climate, if no confidence in UK economy & no efficient government policy to stimulate economy, it will takes years to slowly gradually recovery.

[GreyGardens88]

I don't think it will be as bad as most of us feared, properties still moving quickly on Rightmove in my area

[paastumho]

I am dubious about the current activity and wonder how much of the interest translates to sales. Buying now is foolish as the impacts on the economy won't play out for another 6 months to a year. Repossessions can t get going until borrowers are in forbearance for a year.

[HappyDinosaur]

We know an EA and they have said that the amount of sales they've been having is crazy, people are thinking about what they want and going for it. Granted, only one example but houses are always something people want and need, so any small drop is likely to be short lived imo. I think there'll be some room for negotiation at the moment, but not a great amount.

[Jeremyironsnothing]

Not a great time to be selling a flat though.

[HforHotel]

I think it will depend on the type of property you’re looking for and normal supply levels.

We thought we were in a great position being chain-free, but there’s actually wasn’t much suitable to buy and that was a couple of years ago. The properties seemed to be for sale due to death, divorce or downsizing. None of this situations make an ideal vendor, due to slow, convoluted decision making and the properties all being over priced!

I think in the current situation people will sell only if the have to and many people in the houses we were looking at didn’t need to sell. We had our first 2 offers on houses rejected (not high enough apparently) and in both cases, the EAs came back to us to accept our “low” offer after another 4/6 weeks. It’s worth being patient and doing your research on what a house is worth to you.

I don’t think the property market will crash, but I think it will stall for a while.

[serenada]

@rabbit - so for ftb (sorry to butt in) when would you recommend? 2022/2023 for the dust to settle and see where we are?

[rillette]

Surely if you can afford it and are ready to go, that makes it time to try and get on the ladder, not second guess when you'll be able to maximise your return or scoop a 'bargain'. It's all well and good waiting a couple of years, but then presumably that's another couple of years wasted on rent payments.

[serenada]

@rilette

No, I'm trying to work out how long I have to save the deposit.

I don't think it quite works that way either in London - it' about whether I could actually get on the ladder in a few years as opposed to giving up. If the levels come down a bit, it might allow ftbs to get on (although higher LTV kick in too).

[Talulahoopla]

DP and I both own our flats but have decided to sell and buy a house together. Both flats are in areas where demand far exceeds supply. In both areas properties tend to go on the market, closing dates set within a week and sell for far in excess of home report value. In Scotland we're still waiting for restrictions to lift and the property market to reopen but EAs have told us they've actually sold properties during lockdown which is surprising when people can't view, as well as loads waiting to view and properties ready to come on the market when restrictions are eased so there's definitely an appetite to get going again. We're also being told banks aren't asking for pre-lockdown valuations to be revised and reduced at the moment so that's positive.

That said, EA and mortgage advisor did say that banks are withdrawing products with LTV above 85% or are offering with only short validity periods so they're being cautious (understandably) to protect against a crash but they are still willing to lend and rates are low. Whilst the LTV point might be an issue for some, if you can afford it and are comfortable that income is secure then it might be perfect time for some.

There are so many mixed opinions about what's going to happen and nobody knows for sure. We're cracking on - we want our forever house so even if there is a dip in value (which we wouldn't expect to be massive) we wouldn't intend to sell it any time soon and don't want to put our life on hold to wait and see.

[HappyDinosaur]

It's also worth remembering that interest rates are very low at the moment so if you can get a mortgage and fix it for a good term then it's a good time to do so. The two banks we checked are both still offering 90% mortgages too, if there is a drop in future this may not be the case and may stop you getting into the ladder. However you'd need to be confident you could continue to pay when interest rates rise which they are bound to eventually.

[WowLucky]

ATM estate agents are reporting that they're busier than they've ever been but I suspect that will be short lived and is a result of people dreaming about what might have been during lockdown, rather than people who will really end up moving.

There's a house a few doors down from here that went on the market at £700k in Feb and has just dropped to £650k. Now, in my view it was always over priced but that's a significant drop.

[billysboy]

the sales of hair gel and grey shiny suits favoured by the agents will plummet