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 don't live near my parents, I can't afford to. I don't expect the standard of house they have. They had three house moves to get where they are, (I've had to have 5 rental house moves due to landlords selling etc)
But as their health ails as they get older I do wonder who will care for them?
I wonder where I will live when I am old and can't work anymore? no hope of retirement I can't afford a pension big enough to cover rent. That tax payer social housing bill will be huge.

Cat,
I'm sorry about your circumstances and I'm not saying you don't exist. I'm refuting the earlier poster who said there are 'millions' of people like you.
And with all due respect, if you have a shortfall of £300k between what you can borrow and what houses cost, a crash wouldn't help you either...

Having holidays and a phone is just part of modern life. Why shouldn't people take advantage of modern advances

I must be really old fashioned because when we were saving for our first flat we didn't go out, didn't go on holiday, and worked several jobs, working on Sundays from 12mid day to 5pm Monday and didn't even own a house phone.

Was it worth the sacrifice? Yes,

We started out in a teeny tiny studio flat, there was no way we could afford a 1 bedder but the 2 problems now are

1. banks on the whole do not lend on teeny tiny studios which for years was the starting point of many many FTBs

and

2. The FTBs now don't want the teeny tiny studio or even a 1 bedder they are looking for somewhere they can raise a family or stay put for a number of years. Never have FTBs been able to afford to do that unless they had very wealthy parents or an inheritance.

I think for some a bit of realism is needed.

wasabi - I don't think there has, historically, ever been a gentle slowdown. Minor corrections stabilise prices or bring them down very slightly but generally only last a few months before the market gets turbo-charged again.

I do think the 2007/8 crash was a crash - around me in London, houses lost about 20-25% from previous asking prices. The reason that I suspect your house only lost £5000 was that you bought in 2004 so had had 3-4 years of rocketing prices before came to sell - if you had bought in early 2008, I believe you would have lost considerably more.

Id say YABU to wish that on people! NBU to want to own your own home....but don't you already have a house that you're extending and doing works on? You're on the other thread with me right???

If it crashes this year that's our renovation work made pointless... So I sincerely hope it doesn't!!!

Sorry OP the app opened the wrong thread initially - it's not you on the other thread with me.

Still... You're Unreasonable to want a crash! I stand by that!

It's all very well saying that FTB should not be wanting family/large home like their parents.

Some FTBs have a young family already & it's disheartening to realise you can't even afford the 2 bed flats which are going for £400k and upwards here in SE London.

We could try for the starter home studio but having a small child & husband that would not be big enough.

I think all that's wanted is a bit of realism to house prices. They have shot up way beyond any salary increases.

House prices and rents need to come down. I can't believe how much some people pay now for a very ordinary terraced house outside of London.

House prices are not going to have "realism" or whatever, because they are based on supply and demand. There will be 10 million people in London by the middle of the next decade, not enough housing is there to meet the demand now there certainly won't be enough built to meet this.

a crash would mean that people with money can buy up bankrupt stock cheaply and then re inflate the bubble and sell at the top of it.

the price of housing is heavily contingent upon the availability of credit, it's much more complex than just supply and demand

no one knows how many people will be in London in 10 years time, we can say what is likely based on current trends but we cannot say how likely it is that current trends will continue

Of course it is, but pulled down to very basic levels, the reason that the crash of 2008 didn't harm the London market for very long is S and D.

Oh and we also don't know what effect a house price crash would actually have, maybe it would be fine for everyone, but based on past experience all we can do is speculate. However it is VERY likely that London will have 10 million people in it by 2025.

A crash will favour those with cash, who are able to 'buy to let' through limited liability companies (they are exempt from the new tax on buyers of BTLs and second homes - this loophole is only available to 100% cash buyers).

You will get your wish for a crash if:

• Chinese money starts being pulled out of London as the Chinese economy slows down; and

• the uk votes to leave the EU.

Be careful what you wish for though. We have an economy that is built on personal debt and driven by the view held by homeowners (who are still, just about, in the adult majority of households) that they are wealthy, by virtue of the value of their houses (generalising horribly, but broadly accepted).

If you take that belief in personal 'wealth' away, the whole thing collapses like a stack of cards.

People will quickly find that they are unable to pay down their debt or relocate for jobs or cheaper housing because the sale market will freeze up.

Rentals will remain high.

"Chinese money starts being pulled out of London as the Chinese economy slows down"

There is quite likely to be more of an influx here if this happens, the cash rich in China will invest here as its a safer option than the stock market. Foreign investors only account of 3.3% of annual sales anyway, their role is overplayed by the media.

I heard danny dorling lecturing about the position in London last year and he made the point that the British property market, especially in the south east, is driven by incoming foreign money, attracted by a stable regime with a transparent and predictable rule of law, a relaxed and hands off attitude to corporate taxation and internationally respected public schools and universities.

His view was that as long as there is instability in the world, the property market will keep on rising, as none of these factors are likely to change.

But there are significant big unknowns eg the EU referendum and the collapse in oil prices, as well as the Chinese slowdown. No wonder George Osborne is worried and starting to get his excuses in early.

When house prices crashed 24/23 years ago, repossessions soared. House prices fell, rents fell.

A crash will favour those with cash, who are able to 'buy to let' through limited liability companies (they are exempt from the new tax on buyers of BTLs and second homes - this loophole is only available to 100% cash buyers).

Nope, this loophole is available to people needing mortgages too - specialist lenders like Aldermore do a roaring trade in it. The obvious downside is the higher interest rate.

Last time, the crash also favoured first time buyers. I know, I was one of them who could not have afforded to buy before the crash.

The crash only favoured ftb when the government stepped in. There was a period they werent lending unless you had 40/50% deposits and impeccable credit history in 2010/2011. The house we tried to buy we rented it was 225k now it's worth over 400k. Wages haven't increased that much!

There are some properties in London fed by foreign money. That is not the case for most houses in the M25 the vast majority of which are utterly uninfluenced by Russians or Chinese buying new build flats or huge mansions. London is mostly £200k to £500k flats and up to £1m houses and that is relatively normal people in that market, not foreigners.

Also- I welcome with open arms the change in Stamp Duty which is coming in April.

3% surcharge on but to let & second homes.

I'm hoping this will have some effect on demand in London, and go some way to prevent BTL investors hoovering up any new/available properties.

I am not talking about 2010/11, I am talking about the much worse crash 23/24 years ago. And the Government did not step in. It did mean that you could no longer get crazy multiples of your joint salary in mortgage, and 100% mortgages vanished overnight. But houses suddenly became affordable.

Pre 2001 I can't remember anyone talking about house values as they had hardly moved for years. Surely a house is a home rather than an investment. If it is an investment, it was a fortunate one!

Cleaty, I think the government stepping in prevented the adjustment that should have taken place. We are on a false bubble now. Yes there was and would have been negative equity, yes they stopped lending, yes it was shit.
But riding it out on the other side it would have been ok.
Now we've this false floor

toystory in 2001 the self cert mortgage became common place. That's where the loan to wages values started getting skewed