In not understanding why house prices aren't plummeting?

[Hammy02]

I don't understand how house prices seem to be staying static/just dropping a few percent. With the amount of uncertainty about jobs, people having less disposable income and the end to 100% mortgages, how can people afford to get onto the housing ladder? And yes-I am one of the bitter people who wishes they'd bought 15 years ago when prices were at a sensible level!

same here, i thought they were supposed to be dropping but had a look last night and they seemed more expensive than ever!

Unless someone's job is 100% safe (of which there can't be very many), who would risk buying their first home or upgrading their present home? Makes no sense to me.

Round here ours have dropped slightly - mainly because a transport link that was planned has been sent to limbo, so people expecting to be able to sell and profit on "easy cheap links to the city centre" are out of luck. Stuff isn't selling in our street at all though - we've got two houses empty and up for sale that have been up for over a year now... which suits us as we're interested in buying one of them!

We're looking to first time buy in the next few months - have managed to get the deposit up to 10% with wedding gift money and doting parents - if you're at that point in your life when you need somewhere new to live, you'll have to take the jump - was something on the news last night round here that there are 6 sets of tenants chasing every private rented place that comes up and the rents are going through the roof. We're going to HAVE to move before this baby comes - so buying is going to be the only way ahead for us.

People don't want to sell their houses for less than that I guess.

People won't put their houses on the market so much which creates fewer properties, so the prices don't fall.

I have no vested interest in house prices rising or falling. I'm pretty sure though that in time we will find that the average house will be more affordable. Market has been propped up by extremely low interest rates and reluctance to sell by those that don't have to. Sellers don't want to sell for less than house was worth a couple of years ago so number of properties coming on market relatively low. This means that more desirable houses in nice areas still command a premium. Can't see how this can continue long term though - particularly with consumer confidence taking a battering.

I know! I'm hoping for rentals to go down again, sorry but I need house prices to drop

I think house prices dropping is actually a good thing for society as a whole. Feel desperately sorry for those who will end up in negative equity though.

surely the reason is that interest rates are being kept so low, so the fact that it is so cheap to borrow money offsets the other factors the OP mentioned.

Mine dropped 15% over 6 months and I eventually sold for slightly lower. Dh flat has just dropped just under 10% in a month. I think that's pretty fast but both were targeting first time buyers who are the ones who aren't buying

I don't think they are going to drop (sorry) but I do think they will remain static for quite a while, so wages may move more in line if the economy picks up.

there will be inflation so they will drop in real terms in some areas without people noticing as much as they would have done otherwise. Then in other areas (eg desirable bits of southeast) they won't drop at all. I reckon

But interest rates WILL rise....

This country is so overcrowded that we have a problem with supply. Unfortunately building stacks of 2 bed flats and weeny starter homes doesn't solve the problem. We need a glut of larger family homes so that people can keep moving up the chain. The people in flats and starter houses eventually need family houses and there are very few.

Dh is constantly shocked by house prices as he thinks in terms of square feet per area, he doesn't take into consideration the emotional and aesthetic side of houses.

We also need to rethink stamp duty, moving is an expensive process it stops people moving once they realise that they have to fork out an empty 50k to the government just for the pleasure of moving.

depends what you're after, if you want a new build flat then prices have dropped quite considerably but if you want a family home particularly somewhere like London where we are then they haven't dropped or have gone up because there is a lack of supply.

imo there needs to be more houses built in places people want to live before prices of houses (as opposed to new build flats) will drop much

also as lots of people with family houses will have bought years ago then they are to a certain extent protected from the economic problems because they'll have more equity etc

because interest rates are so low people can afford to stay in expensive houses.

and the government will keep them low despite the rest of us who don't have a mortgage or tons of debts getting supremely fucked by rising inflation and higher taxes/VAT and benefit freezes.

oh, no, stuff us! gotta keep that bubble going!

The people who haven't lost their jobs and are on variable rate mortgages have never had it so good in terms of affordability. At the same time, they may be staying put and not speculating wildly, because they know interest rates will go up again. So, not much activity in the market.

Interestingly our Parish Cpuncil sent us a survey about whether our little area needed affordable housing.

After scratching our heads and thinking about it we decided that we actually need some more family houses not on bloody great developments though.

We sent a letter to the council with our survey explaining that if people could buy a decent family house in this area they would jump at the chance.

With the family houses come children for the local primary school, but not the hundreds who could descend if we built a huge development of cookie cutter houses. These family houses would be paying lots more in council tax, of which the parish receives a percentage, they would probably reduce the age of the population significantly.

Because interest rates are low and so very few forced sellers. Add to this that no one wants to sell for less than they thought their house was worth at the peak of the market.

We are waiting too....

A small development (10 semi-detached houses) of shared ownership homes was proposed in a village near here. All the retirees/old people in the village voted it down.

They want a retirement community, they can have it!

Hell if I'll be the one sparing them so much as a thought when they get too infirm to manage without help out there.

Our ageing population is a major problem, maybe we should be paying theright people to have more children.

Incidentally mortgage debt is being paid down at record rates.

Not much point in saving at the moment, if you have any debt it's well worth getting rid of it.

I live in North London and house prices here have not dropped at all - quite the reverse I'd say. Also there is very little supply so anything half-way decent is going like hotcakes.

I think unless/until mortgage rates rise significantly, housing round here at least will remain strong.

A lack of supply is supporting inflated prices. There are very few decent properties on the market, and buyers are still willing to pay up for something good. Mortgages are still affordable as long as someone considers you to have decent credit.
To top this off anyone in negative equity often feels safer riding out the storm and not selling up- waiting for a price recovery on their losses- so you're not even seeing distressed sellers in the market, which you would expect if interest rates had risen

I'm not sure why, but here in the NE England, the prices do seem to be dropping a bit.

Next door 3 bed terrace was valued at £85K. There are a lot of similar properties on the market though (and it needs some cosmetic work)

Anything put on at £100K+ isn't selling at all.

A relative (same area) had theirs up for sale last Summer (and offered) for £115K, only for buyers to pull out.

Was revalued 2 months ago at £100K.