To hope there is a house price crash this year

[blondieblonde]

I really hope there is, so we can buy somewhere. What are the chances?

I bought a shit house in a shit area that's what most first time buyers have to do to get on the housing ladder I live in a lovely house now that was also a pretty crappy area when I bought it if you wait for lovely house/flat in lovely area you will be renting for a long time.

Well that was a house , different to buying a small shit flat. Just because your area improved doesn't mean all will.

There is no ladder.

Everyone unless you have kind well off parents or a large inheritance goes through the crappy flat stage.

Depends where you are - it is one possible compromise.

My parents bought the house the are currently in in the 1970's - no inheritance or family help for them. The didn't get the area they wanted but just outside in commutable distance to work and facilities. It's now a ridiculous "price".

We didn't get an inheritance or buy a flat - we bought a house big enough that we could raise the DC we already had and have space for the extra one we knew we wanted. We spent a decade saving for that and were lucky to be in area house prices were high but not ridiculous. We have turned opportunities with work for some locations as we knew we couldn't afford to live there.

Our IL who had traded up were really put out with the house we bought. It was too big and too good - we planned to be there till DC had left home - we ended up having to move for work but we could have stayed.

IL thought we should have bought at most a two bed - as we were in our 30's we'd already started on children and knew how many we wanted - the houses they wanted us to buy were already too small.

We compromised on location but found a spot with good primary and ok secondary and longer commute than we really wanted. We've done the same again.

I think all the talk of trading up and down people forget many of us are buying homes not just property.

If we'd done what my IL did trading up though DH childhood by time we'd have a big enough home the DC would have left home. Plus moving costs money - 5 K last time for selling/buying you don't really get to enjoy paying out the money - there nothing tangible.

My concern with buying flats in crappy areas is that they do lose price first and take longer to come back up - depending on where you are of course- I'd be worried we'd have got stuck somewhere way to small with possibly very crappy schools. In which case renting a better property could be a much better long term option.

3% does sound like it was pulled-out of the air, particularly considering 37% of inner London's population is foreign born. Even if all of them lived in rented accommodation, this would still have a significant inflationary pressure on property prices, as there is only a finite housing stock, and supply is not increasing at anywhere near the rate of demand.

International markets are wobbling, oil prices are trhough the floor and China's economy is stagnating. One of two things will happen to the London housing market; either it will boom even more, as foreign capital sees it as a safe-haven, or the inevitable correction will come.

We are living through a property bubble (all modern markets are cyclical), and correction is a question of when and not if. Twas ever thus.

www.bbc.co.uk/news/business-23234033

This shows where you could afford to live in UK - for us there is way up north or the two locations we've actually bought in and not much else to get a three bed house.

Totally agree Babycham1979, I'm 70% 30 on a crash happening. Lots of wealth has been distroyed with the current collapses, prime London has been shakey for a year or so and the stamp duty changes make expensive property far less attractive to invest in.

30 years ago friends laughed at our first flat and said they would never do what we did to buy our first flat.
30 years later 2 still live in their rented rooms in shared houses waiting for prices to crash, despite 2 crashes they have never gone down enough for them to buy. 1 friend has a council house and has paid more rent each month than we have ever paid on a mortgage. 1 is still in private rented and is struggling with rent and doesn't think she will be able to retire and lives in dread of her losing her job as she has never saved anything despite having a very well paid job. The others ended up buying a similar flat a few years later with a bigger price tag.

You wouldn't expect to get a Managing Directors job of a large company as a first job so why would you expect to be able to get a nice house in a good location straight away. Like everything you have to work your way up the ladder.

You sound like a boomer. There is no ladder these days. The playing field has totally changed.

Eg if mark and Suzzie both 35 earning 80k between them buy a one bed flat in Newham for 350k. How will they ever move else where seeing as they are probably at their peak earning and wages have stagnated.

Totally agree Oliver. I read house price crash forum from time to time - it's so sad, people rubbing their hands with glee every time there's a negative piece of press; for 13 years! 13 years they've been sitting and waiting for something to happen, whilst the rest of us have been getting on with our lives, and paying down mortgages.

To be fair all the media has reported every house price rise as good news for the last 10 years.

I've been reading house price crash since 2005. Although lots of good information, the people there are quite dilusional and paranoid. I got banned for saying I bought a house and for not towing the site line that a house price crash is imminent. People thought I was from a government agency paid to demotivate them or an estate agent trying to "ramp" btl. I'm 70 30 leaning towards a house price crash.

YABU to wish negative equity on people. YANBU to want your own home.

how precisely then is one to afford a home without a crash?

The 3 % figure accounts for over sees buyers buying property and not living in it. Foreign buyers are difficult to account for, for example is a retired French banker who has been here 20 years a foreign buyer or a Londoner?

The shit area thing? Well 30 years ago everything outside Belgravia Kensington and Chelsea were shit. Teachers could afford to buy houses in Hampstead! Kilburn was "shit" and now is highly sought after as are Queens Park and West Hampstead. Islington was shit in the 70s/early 80s, King Cross was shit as much as 8 years ago.

The problem with a housing crash, especially in London, is because London house prices will fall the least and rise the quickest it is unlikely to have much of an effect. A crash here will not be in isolation and foreign investment will increase as it will be seen as a safe haven, secondly the economic effect of a crash will be felt much keener outside of London which will see more people coming here for the economic opportunities.

Don't just buy anything anywhere, buy something you can make a home, don't pray for a crash because the likelyhood is that it will be not as large as you need, results in less lending, and rebound quicker.

There is a crash coming, but its more likely to be in the stock market than anywhere else.

Because Susie might not be planning to be sat in the same job forever?
I'll let you into a secret... There is a thing called a promotion, and they often come with another thing called a payrise...
And even if they didn't want to earn more, after 10 years, they will have paid down their mortgage enough to have a good pot of equity, which will enable them to use that as a deposit to buy somewhere bigger, assuming house prices don't increase
5 years if they do...

Now compare their situation after 5 years of continuous renting...

YABVVU We can't afford to buy, we can barely afford to rent anymore yet are 40% tax payers... But that is the price of living in London so we just have to put up and shut up

The problem with a housing crash, especially in London, is because London house prices will fall the least and rise the quickest it is unlikely to have much of an effect. A crash here will not be in isolation and foreign investment will increase as it will be seen as a safe haven, secondly the economic effect of a crash will be felt much keener outside of London which will see more people coming here for the economic opportunities.

Do you have a crystal ball telling you all that?

We can't afford to buy, we can barely afford to rent anymore yet are 40% tax payers... But that is the price of living in London so we just have to put up and shut up

that's the price of 20 years of inept government not meeting building targets year after year. that's the price of ridiculously restrictive planning permissions.

London wasn't always like this.

Well based on the last international crash, which is all we can base it on.

Think about it though, this isn't going to be just a British crash, we do not exist in isolation, the crash that is coming will be caused by what is going on in other economies at the minute. So if it is a big crash, the Eurozone will most likely be decimated, the very wealthy from across the world will be looking for relatively safe places to put their cash, so London housing will be an option.

When it does come, it is likely that there will be a wave of redundancies across firms, which means people will relocate for work, not just in the UK but across the eurozone, and again as the biggest city in Europe it is likely that London will be a destination for many people, pushing up demand..

There is a thing called a promotion, and they often come with another thing called a payrise

Seeing as payrises haven't even kept up with the cooked inflation figure over the last decade that's a moot point. There is no ladder for people these days. There was for boomers.

That's a bit better, you've added likelys!

That is one option, however I don't think much can be based on the last crash as the next one might be very different. The last crash didn't reset anything or solve fundamentals, just kicked the can down the road. We are in an unsustainable situation now that can't continue.

YANBU, and i say that as someone who lives in Scotland (where properties are much cheaper than London) and own my own home. I dont understand how negative equity affects people living in their homes, it doesnt affect their mortgage payment, all it means is that they dont have £x available in their property. But if they stay in their homes and pay their mortgage eventually they will come out of negative equity. My concern is not for those who think they are 'losing' money on their home (boo fucking hoo) but for the likes of my dc (who are school age). I want them to be able to afford a home when they are old enough.

When it does come, it is likely that there will be a wave of redundancies across firms, which means people will relocate for work, not just in the UK but across the eurozone, and again as the biggest city in Europe it is likely that London will be a destination for many people, pushing up demand..

part of the problem is low interest rates. London housing is not only safe, but has until very recently been a good investment. if interest rates return anywhere close to normal, the now thin margins vanish, and 100% of the investment will be based on projected price raises.

I am not convinced that there will be a crash. But few assets have increased like property (not just London, property in general) at the rate property has recently. I hope for a correction.

IRL I have Friends who are working their way up the "ladder" .

IRL Mark and suzie wouldn't buy a flat in Newham for £350000 unless they were completely crazy or too snooty to get their hands dirty.

They have had at least 28 years of savings between them and with what they had got for their deposit it would probably get them something for cash at auction that they can add value to. No Stamp Duty, No mortgage arrangement fees.

I am just coming to the end of a 14month renovation. It has been 14 months of Hell, only because of our circumstances we will be selling and moving. Where we will be moving to (still in London) is slightly cheaper. Within 18 months we will have gone from a 2 bed 1 bath bungalow to a 5 bedroom house with 3 bathrooms and maybe a pool. If I stayed in this area we would have a 4 bed 2 bath place with a granny flat in the garden.

There is only a level playing field if everyone buys something that is ready to move into and doesn't move areas.

Throughthickandthin I have friends who are still waiting for a crash to take prices back to 1975 prices. In the meantime they have been paying £175 per month rent (been there so long they are now sitting tenants) and laughing at how little they pay for their room. They are not going to get bogged down with a mortgage. However they have paid over the years over 4 times the amount they would have paid if they had bought a 1 bed flat which had it's own bathroom back in the early 80s.

Mark and Suzzie have just snapped up this bargain.

www.rightmove.co.uk/property-for-sale/property-38975436.html

They want to start a family soon. So in two years time if they have both doubled their income they hope to move into a 2 bed flat.

Hpi in Newham is running at 20%, so their next property at 550k is getting further out of reach. Even though they are on the "ladder".

This Government (possibly even more than the New Labour shower) are artificially inflating house prices. Even if they wanted to build houses to meet demand, they wouldn't, as this would depress prices.

This is due to a combination of factors, that include self-interest (the high proportion of BTLers and multiple home-owners in Parliament; the greed of baby-boomers and the associated levels of expected inheritance; and the sources of funding of the main political parties).

Osborne has succeeded in making it appear the UK economy is growing rapidly thanks to three factors; immigration (unorganic population growth), unsecured borrowing and property inflation. All these contribute to growing total GDP figures, without actually resulting in any more 'real' money per person.

The truly frightening thing is that this recipe for GDP growth is demonstrably and unarguably destined for failure. Not only is it unsustainable, but it is increasingly precarious.

As much as Osborne et al like to use the word 'investment' to describe foreign buyers snapping up prime London property to keep it empty, it is anything but. Much like the obssession with selling the family silver to foreign companies (Cadbury's, anyone?), the initial purchase appears on the books as 'investment', but any subsequent profits are rapidly sent offshore, usually to tax havens.

The current house-price scam is a bubble by every historical measure, and we will have to face a painful correction. It's a symptom of our imbalanced and unsustainable economy, and will fall along with the rest of the house of cards.

I say this as someone who owns a property in a leafy inner London suburb, so it's not from a position of blinkered self-interest.

Also desperate to buy, pay a lot more in rent than would in mortgage (and can't get deposit together for this reason, especially as each time we feel we are a couple of years away the prices soar up and out of reach again.)

In the last year, 5 good friends who have bought (with help of parents, late 20s and in the SE, is there any other way?) have seen their house values go up by 50k in a year. How are you meant to save at that rate?

And PPs lamenting that FTB don't want to raise families in 1 bed studios... err of course they bloody don't. And neither would you.