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?

House prices and rents are continuing to rise at a rate that causes misery to many.

The point about btl is that they were borrowing to invest
(Hmrc considers landlords to be investors)

I get what they were doing and why it's bad for the price of houses - though how bad does seem to be a very debated point.

However they still added to the rental property pool - smaller pool means higher rents. Higher rents mean people can save less towards buying.

Ideally cash buyers will sweep in and buy up their properties and rent them out - but if property prices crash surely less people will want to invested in rental properties at all?

I don't know as I was only really aware of house prices going relentlessly up prior to us buying. It was staggering how much more we paid by going to university and few years work than people we lived next too who bought nearly straight out of school - those extra years made a huge difference.

The amount we lost was in price decreases on our first property was no where near as much we'd have saved if we'd been in a position to buy 5 to 6 years earlier or even 10 years to when we actually could buy.

While we have bought - and do pay a mortgage - I do think prices are crazy. I look at my DC and wonder what they will end up doing. We bought a good decade later than our parents managed - 30's they did 20s - without a long term price correction it could mean it become the norm not to own before 40's and more never owing - which would be okay if there was a stable rental alternative.

However they still added to the rental property pool - smaller pool means higher rents. Higher rents mean people can save less towards buying

Only by taking properties out of the owner occupier pool
And inflating prices out of the reach of owner occupiers

Landlords don't magic houses into existance
They purloin them and prevent 'hard working families' from owning them

house price crash clearly benefited no one except those with cash to buy, that is all that will benefit from an oncoming crash.

It will benefit many for house prices Togo back to reasonable levels. Like the millions of under 40s who haven't a chance of getting a mortgage.

This speculation on houses doesn't benefit the economy long term, its taking investment away from productive industries and ever inflating the housing bubble.

Landlords don't magic houses into existance
They purloin them and prevent 'hard working families' from owning them

Some btl landlords really do think they are almost charity workers. If you didn't btl the house doesn't magically disappear. Anyone still into btl is either not aware of the changes coming or has a very limited understanding of economics.

Purloin them!

That all leads back to the question about where people who don't want to own will live. All threads like this come back to that. If you don't want to buy right now, where do you live if btls don't exist?

Landlords don't magic houses into existance, They purloin them and prevent 'hard working families' from owning them

People need to live somewhere before they are in a position to buy. Very few people have luxury/option of staying with families till they buy a property.

It took me 10 year of working to save a big enough deposit - I had to rent in the meantime. I needed rents I could afford so I could also save - I think that is pretty standard situation. We also had to have jobs paying enough before a bank would lend us the money.

There are many people who are never going to be in a position where they can buy a property.

DH whole sector is really bad for permanent jobs till mid 30's - it's all long term year to 2 or three year contracts so being able to pick up and move without having to sell a house make senses.

There are a lots of hard working families needing affordable rents.

Ideally there would be a social housing rental sector but in most areas I have lived that is really hard to impossible to come by so people are force to into private rental sector. There are problems with the private rental sector - lack of security - short term lets are a major problem as is IME can standard of said housing.

I seriously doubt you could every achieve 100% home-ownership anyway. They need to build more houses and sort out the rental sector as well.

Btl ers are only a subset of landlords
Of course I'm not suggesting there should be no rental market

Council houses brought rents and house prices down. The sale of council houses has put prices up. BTL has had some of the same impact. There needs to be affordable rents, then house prices will also fall.

Idk. A crash would cause huge misery. Surely the knock on effects would mean job losses, stagnant or falling wages, etc? I can't buy a house and I would like to be able to, but I don't really want to see a crash. I'd be happy if prices never rose again though. Maybe then savings for a deposit wouldn't be outstripped by price rises. Maybe people would go back to seeing houses as homes rather than investments.

where do you live if btls don't exist?

I think some big companies in London are starting to build and rent flats for their workers and/or be landlords - seen some news reports like that anyway.

Accidental landlords - people who can't sell but have to move on - often sell when they can so not great for long term.

People renting out to pay for care home costs of elderly house owners.

People having bought property - then moved in with someone else but keeping it in case thing don't work out long term. Probably want to sell eventually.

I don't think blt landlords are the only landlords out there but I wonder how much of a % they are - and how if they suddenly leave the market it will affect rents in areas where they were in high numbers.

So who are the others? In effect they have all bought a house and now want to let it...

Councils... not enough money
HAs... not enough money
Private companies... oh! They'd have bought with the intention of letting
Private individuals who choose to let because their circumstances change.., effectively they have bought, to end up letting.

No one ends up as a LL by accident. All LLs make a financial decision and choose to let.

Who do you want to be LLs? As other have said, deliberate LLs at least know it is a business proposition!

Btl ers are only a subset of landlords
Of course I'm not suggesting there should be no rental market

I'm sorry your post did come across as all landlord are evil people denying hard working families houses of their own.

No one ends up as a LL by accident.

Its a term of phrase not to be taken literally. Many do just move can't sell so decide to let it out. Its actually pretty common for people when they move to think let's just let out the old place. This can't be right.

"It will benefit many for house prices Togo back to reasonable levels. Like the millions of under 40s who haven't a chance of getting a mortgage."

It won't benefit them because if prices crash banks will be forced to write off billions on their mortgage books. This leads to a tightening on conditions of lending, so bigger deposits needed with smaller multiples.

A 30% fall will see a flat currently worth £500,000 go down by £150,000 to £350,000. Sound affordable? Ok it isn't because you would now need a 25% deposit of £87,500 and lets say IF they will grant mortgages of up to 3 times your salary, a joint annual income of another £87,500 annually. Yes its really going to benefit lots of people currently under 40.[hmmm]

Lets take one at 300,000 which would fall to £210,000 in this scenario, a 25% deposit is £52, 500 and a joint annual income of the same (3 multiples of salary). Better, but still way off the average.

Oh and it is likely that, whatever the base rate the banks would charge higher interest rates than currently.

Also the economic impact of a 30% crash would be disastrous for the U.K economy, which really helps those under 40 and in their 20s who are struggling even to get on the career ladder.

Yeah, right.

But lighten I've already said that everywhere within 50-70 miles of us are similarly insane prices. I'm sorry but I don't think it's a "woe is me" attitude to not want to live 100+ miles from all of my friends and family in order to afford a house! Especially as we both do jobs that would be harder to find appropriate levels in outside of the south east. I haven't moved to London, I'm from London. I would happily move somewhere within an hour or twos commute from work but nowhere within an hour or twos commute is affordable. I would have to move my whole life to the midlands or up north. If it's "woe is me" to say I don't fancy that then well woe is me.

It won't benefit them because if prices crash banks will be forced to write off billions on their mortgage books. This leads to a tightening on conditions of lending, so bigger deposits needed with smaller multiples.

Well no smaller deposits in £ will be needed but a greater %/wise as house prices will be less. Banks have already priced in 30%+ drops.

Maybe a bit of short term pain, but long term will improve the economy. We currently have an unproductive zombie economy.

Germany s economy was wiped out a few decades ago and now has the strongest in Europe. Iceland also. The fundamentals of the UK economy were never fixed, just a can kicking exercise.

Sorry, but I just don't buy that there are 'millions of under 40s with no chance of ever getting a mortgage'
There might be plenty who can't afford to buy anywhere as nice as they can rent, and therefore prefer to keep renting
And plenty who can't buy anywhere with as short a commute as they have when they rent but with the exception of a pretty small group of people who have a job that only really exists in London, and have unusual working hours that means they can't rely on suburban commuter lines, most people can afford to buy somewhere. It might not be in their chosen area.

I'm not suggesting that everyone should have to buy a tiny bedsit to raise their family in, but just because you can't afford to buy in Hackney/Clapham/Chiswick doesn't mean London is out of reach of normal people in normal jobs

Dyslexic, I've done the sums for you above for a scenario on London prices. It doesn't work out, the deposits as a % and in £ are larger than they would be on similar priced properties right now.

You've also forgotten the economic effect, will people want to be buying houses if they can't be sure if they will have a job in the next year. This will be a consideration because with a massive fall in house prices home owners stop feeling as wealthy, so stop spending. It causes poor consumer confidence too so consumers stop spending with the knock on effects of a recession/depression spiral.

Your grasp of this really isn't that sound.

Youve done some sums with figures plucked out of the air yes.

I've said countless times it isn't going to be an overnight fix. But let's agree to disagree. The current path of uk housing isn't sustainable for the economy or benefiting the masses. It will fall sometime. There will be economic turmoil, we will come out of it with a more balanced economy and more opotunities (hopefully).

A crash is a far from ideal scenario but some sort of gentle slowing of prices is desirable - in London & SE at any rate. Having said that it can work for you if you're trading up.

The last crash wasn't really a crash though was it? Prices just stopped going up or dropped back slightly. We lost 5k on our 2 up 2 down when we sold it in 2009 (bought in 2004 at peak) but we'd overpaid mortgage so had plenty of equity and the 4 bed we traded up to had come down on value to within our budget - at peak we'd have had no chance.

Prices would have to drop so dramatically so that bigger % deposits would be lower than current £ value that it isn't realistic looking at.

For example 25% of £100,000 is £25,000 you'd currently get a mortgage with £10, 000 easily.

£85,000 would be £21, 250 when you would currently get a mortgage with £8,000 IYSWIM.

So I haven't just plucked figures out of the air to prove my point, at virtually every level buyers would be asked to come up with more cash than they are currently. Leaving the market open to much more speculation by cash buyers and not opening it up to first time buyers really.

Sorry Felloutofbed absolutely no personal attack intended but my dc my dn etc all live work and commute into London or around London and all live scattered throughout SE and all bought under 30 years of age with student loans and no parental gifts or living at home. It must be awful to know you can never buy in the area you grew up in and all your family have bought and live in but look further there are some amazing places to live outside London.

sparechange
Hello I'd like to introduce myself.
I'm desperate to buy, renting with children is fucking shit.
We can afford the mortgage, we already pay over what it would be in rent. We just can't get the multiples on the loan.
So In theory our deposit would have to be £300,000 whilst our mortgage the remainder £100,000.

There are millions like us, we can't buy anywhere within any commutable distance. My dh is self employed employing 10 people. Should we make them redundant to move to somewhere we can buy? It's not wanting to live somewhere nice it's about it being workable with our lives.
We are saving for a deposit, we don't have holidays, I don't buy coffees out, my car is 15 years old. I don't have a flashy phone. But with house prices increasing at the rate they are it's impossible.

Just because you don't know 1 of us doesn't mean we don't exist

Oh gosh, lots of people can't afford the area they grew up in stop acting like its some terribly inhumane thing.

Oh another thing about younger people that I've noticed (in some, not all) is that they want to live in the same kind of property as their parents, if not as big at least of similar "standard". Most of their parents have traded up over the years, or bought in areas when they were cheap and then did up their houses over years and years. Mind you these are the same ones who whinge about not being able to afford their area, lots and lots just get on with it.