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?

What a selfish OP wishing misery on those who have saved and brought their own home. YABVVVU.

If there is a crash, which i very much doubt in terms of the ever growing demand, house prices will be the least of your problems, having a job in order to buy the house might be an issue!

YABU a crash is not the answer to the housing crisis

I agree with madbengalmum, what a selfish point of view. Don't you have any empathy for all those who have worked extremely hard to buy a property, who would then be in negative equity? What goes around comes around, if there is a crash and you take advantage, there will be another one in the future or unemployment will prevail and you won't be able to afford the mortgage payments

Hoping for a price crash is really silly IMO.

The effect of a house price crash would be that banks would become very risk averse and lending levels would fall so they would have tighter requirements placed on those who would get mortgages. They would go back to requiring 25% deposits, and lend lower multiples of salaries. Meaning that if you can't get on then housing ladder now, it is unlikely that you would in the result of a crash. The problem with hoping for a crash is that you hope everything else changes but your position, but it will have a major detrimental effect on your ability to buy.

Secondly, a house price crash would result in a massive drop in consumer confidence and mean that consumers would have an increased propensity to save, this means that shops receive less revenue, business optimism falls and they stop investing. This leads to redundancies being made, and eventually a big recession.

Finally, with house prices being lower construction firms stop building, meaning that the supply side of things doesn't change, and eventually the prices will rise again.

So essentially, a house price crash leads to less lending and tighter controls, a recession which threatens jobs, increased business insolvencies and essentially only benefits cash buyers.

YABU

Shit! If it were simply a matter of negative equity I'd be with OP. Prices could crash and no one would lose bricks and mortar, they'd simply be paying over the odds, all would be manageable.

But it wouldn't happen in isolation. Jobs would go. Interest rates would soar, employers would crumble, financial security would just disappear, debts would be called in, all sorts of people would suddenly find they could not afford their lifestyle or the debt they had accrued.

It is a really complex financial issue and no one sat typing "Oh I wish the housing market would crash so I could buy a house" is likely to be in a position to survive such a crash with their finances intact.

how are house prices 'unaffordable?' - they aren't - not nationally - just in the London/SE bubble

I am a lone parent on a modest income and I own my own home - I had a good deposit - I can afford the mortgage

House prices here (Midlands are fine - nothing OTT) - my mum has a 4 bed house she got for under £100k - because she's in the North West

A bit of perspective is needed - it's perfectly possible to get on the housing ladder in most bits of the UK

No chance this year OP, there is way too much demand. The south anyway, and some pockets of the North.

Oh and if you are complaining about London and the south east, any House price crash and the subsequent fall out would lead to a fall in prices across the country, because its relative. Secondly, the economic impact of this would be that more people re locate to where the jobs are, increasing demand and pulling prices up even quicker.

OP, I'd also like to know what you are doing to help yourself buy a home.

Because while there are some people who are tied to one (expensive) location and unable to save much, there is also an awful lot of "well I can never save enough so I may as well have that nice holiday/new iPhone/whatever" - I see it plenty in my peer group (London, late 20s). So, again, what are you doing to help yourself, other than publicly hoping that prices tumble?

They would go back to requiring 25% deposits, and lend lower multiples of salaries.

And that would be a bad thing?

Heaven forbit banks lend sensibly. The correction will have to come as the market is out of touch with reality.

"well I can never save enough so I may as well have that nice holiday/new iPhone/whatever"

Yes because a 20 pound a month phone is the reason people can't afford houses 12 times more than their income.

Can't ever see a crash happening. Population is growing & few houses are being built. Simple as peas.

Yes because a 20 pound a month phone is the reason people can't afford houses 12 times more than their income.

Dyslexic - that £20 a month, added to that £3 a day Pret coffee habit, added to the copious Friday drinking session, added to the 2x per year holiday and those expensive work outfits, and the "need" to rent in a nice part of town, do add up.

The mindset is, oh, I just can't, may as well treat myself.

Dyslexic - that £20 a month, added to that £3 a day Pret coffee habit, added to the copious Friday drinking session, added to the 2x per year holiday and those expensive work outfits, and the "need" to rent in a nice part of town, do add up.

People like that are in a tiny minority IMO. Having holidays and a phone is just part of modern life. Why shouldn't people take advantage of modern advances?

All the figures show that young people go out and drink far far less than pervious generations.

www.theguardian.com/society/2015/feb/13/teetotallers-on-rise-in-uk-one-in-five-dont-drink

I have a 1930's book on keeping your home. In that is a budget guide, it says you should put 18% a week towards rent/mortgage and rates.

Where did it go wrong?!? I'd LOVE to pay 18%. Not 76% to a private land lord

It all went wrong with GB raiding pensions, people then speculated on property pushing up prices yearly so people saw property speculation as a one way bet.

....if 1 in 5 people don't drink, that means 4 in 5 do! Dyslexic

"Heaven forbit banks lend sensibly. The correction will have to come as the market is out of touch with reality."

The market is not out of touch with reality, in London and the South East the chronic lack of supply is keeping it bouyant.

So lets take DS who has just bought in Enfield, 3 bed, 2 bathroom new build flat for £300,000 k.

They had 40K deposit and enough to pay the stamp duty thanks to saving up and his DW being good with money, as well as a little help due to inheritance from both sets of Grandparents ( but not huge). They got a mortgage with a multiple of their income to be able to afford it too.

Now a 20% drop in prices would take the value of their flat down to £240,000 and leave them in negative equity. But someone new coming into the market would need £60,000 deposit and a joint income of £72,000 to afford it if 25 % deposits were brought back and 2.5 multiples of income.

But then again, a 20% crash would be a massive disaster.

To all the people saying its achievable and that people are just not saving hard enough or whatever, even to get on a government scheme where we would only need a 5% deposit to buy a house in the London borough we grew up in, DH and I would need to save circa £30k. We are both professionals on decent money but also both have huge student loans and can't live with either sets of parents (lack of space) so are paying more than a grand a month on private rent. It's catch 22. In the current climate we will never be able to buy here, the only possible way will be if and when we inherit some money from grandparents/parents.

The point was the amount of 18-25 year olds drinking is going down. Despite what the media would like people to think.

I'm in the south west. Its out of touch with reality. I'm sure people up north have said the same, houses maybe cheap but there is no jobs. But I can only speak for the south west.

Dyslexic - whether it applies to the OP, we don't know, but what I described above is endemic among my work colleagues and peers and news of the decline of alcohol hasn't reached the City : single people on good salaries who just can't afford anything, and can't seem to see the link between their spending habits and their inability to save. Drives me bananas.

And yes, I bought on a low for London salary two years ago after saving like a madwoman for years. As did many others. There is a real housing crisis, but there's also plenty of... other stuff. The sort of person who comes onto a public forum to will a house price crash into being - well, I have my doubts.

But someone new coming into the market would need £60,000 deposit and a joint income of £72,000 to afford it if 25 % deposits were brought back and 2.5 multiples of income.

That's pretty much average london wages.

Dyslexic I'm in south west too, I don't need my house price to fall at all, we bought just before the crash and my negative equity still remains. Also agree re jobs, there's nothing, I apply and apply and get nowhere.

It's the simplicity of the op that bothers me. Very easy to say I want house prices to crash, but the wider consequences of that are huge. The lead up to such a catastrophe would be mass redundancies, young people not able to find a job, older people out of the workplace and diffcult to get back in at 50+ affecting their pension etc, economic hardship for many, many people, and it could last for years. If house prices crashes, it would be nigh on impossible for most people to get a mortgage anyway as lending criteria tightens to a new level of squeakyness.