To think saying house prices could crash if we brexit will be a plus for many

[feellikeahugefailure]

The BoE and other banks say this as if it is universally bad news. If it stops the vast amount of foreign speculation on UK property then many will see it as a good thing.

Even if you own your own home, its paper gains unless you sell it. So even homeowners might want prices to fall as otherwise their children may never own a home.

I am fairly sure it was under Labour that house prices got out of control.

Yes it was.

I'd also like to be able to move house at some point so YABU.

Yes red it is one of my subjects, along with JSA and shit employers. Thanks for debunking another pro eu myth.

I'm at all the people saying i'm "wishing a crash", I said no such thing.

If someone had bought a house like ours in 2006 for £120k with a £150k mortgage, the house will now be worth £130k at most and I CBA to work out what their outstanding mortgage would be, but it will probably be about £110/120k.

So they would of spent almost about the same as someone who had to rent all that time if they sold now? and thats only for people that bought at the peak. I fail to see the big issue.

Buying a house for years has been seen as an investment, it can go up and can go down. Surely thats something people consider when they buy?

I am fairly sure it was under Labour that house prices got out of control.

It was but the cons have added coal to the fire.

I also seem to remember the OP starting threads on this before.

Ah. Cross post.

In what way, feellike?

There's not going to be a price crash.

The banks own the houses if you're mortgaged, you think they'll let their assets devalue that much?.

All this is wishful thinking by people who remember when you could buy a 3 bed semi for £70k.

I remember crisps being 7p a bag, times change. Prices go up.

PPs are right. Many of those with little equity in their homes are those who are right at the bottom rung of the ladder and who desperately saved to be able to buy. They have little equity in their homes and are the ones who will be in negative equity and who will therefore be completely stuck. Those trying to get onto the ladder will find there is nothing to buy.

The winners in a crash are those at the top with lots of savings buying their forever houses (but even then it becomes difficult due to chains) and those who can swoop in to buy second homes when houses are repossessed.

If prices crashed I wouldn't be able to sell, my flat is worth slightly less than I paid for it in 2006 anyway but a crash would wipe out the £30k weve cleared off the mortgage so we'd be stuck here indefinitely.

Clearly you have never found yourself in the position of losing your home. The despair, the disbelief, the horror, everything you have ever worked for gone. a debt that you will paying off forever.

I would love it if house prices nosedived - and they probably will. Perhaps then my generation would finally be able to move out of rented accom and become home owners.

It would also be amazing if landlords would stop buying everything up, and if some more baby boomers croaked. But I guess that's just my resentment talking.

*There's not going to be a price crash.

The banks own the houses if you're mortgaged, you think they'll let their assets devalue that much?.*

Houses prices go up and down, they have crashed before they will crash again at some point.

Banks are living on hooving up the re-arangement fees and deposit amounts have increased. They are very happy to have them fall so people loose their deposit and lock people into a high rate that cant move. They are businesses not charities.

The effect on employment is more likely to be through economic uncertainty and resulting recession.

In terms of employment protection there are pieces of legislation that emanate from the EU e.g. the working time regulations and the transfer of undertakings regulations (TUPE) but these have actually been adapted to the UK anyway (in fact the UK gives greater holiday entitlement than it is obliged to under the working time directive). I can't see any reason why they would change significantly if we were not part of the EU. TUPE might but it is unlikely.

In any event, governments change and whilst a conservative government might favour employers being able to run businesses effectively, labour governments favour employee protections. Changes in employment legislation are typically more about that than europe. Plus the likelihood of everything changing overnight in terms of the law is zero. The law might adapt and evolve over many years if not constrained by european legislation but it is not going to suddenly change.

Also it is not true that if you borrow £200k to buy a house and sell it for £250k that that is equal to 50k profit.

Equally stupid to think that if you borrow £200k and sell the house at a loss for , say, £150K that that is equal to what you would have paid in rent anyway.

Interest alone is probably more than rent -not to mention maintenance costs, (the roof, the boiler, the broken washing machine, the windows), and the legal costs, and the stamp duty....

It is not simple at all.

Amazing if people died KeyboardMum,?, aren't you a delight.

As far as I remember, in 2008 house prices didn't fall that much, (not enough to be a problem to anyone who had owned their house for a few years and built up some equity) but it became harder to borrow as banks became more risk averse, and then house prices continued to rise.

I don't think house prices will go on and on rising forever - it is a bubble. However I don't think Brexit would have much of an effect.

I'm simply gobsmacked by people who don't see that house prices are linked to the greater economy.

A house price crash does not happen in isolation. If they crash it means the economy is in the shitter, jobs will be lost and banks will not lend on fast deflating mortgages. Nobody should be wishing for an economic crash of any sort, it is all interlinked.

Feel you seem to fundamentally misunderstand how things work. The banks don't benefit from the deposits, they don't get to keep them. If a house is bought for £200k with a £20k deposit and £180k in mortgage loan the bank doesn't get the £20k when the price falls. Either the homeowner is locked in and unable to move and therefore simply sits out the crash (as long as they can continue to afford the mortgage loan repayments), or the house is repossessed and is sold to someone else. On repossession the house might be sold for £180k in which case the bank gets its original loan money back but has lost the 25 years of interest payments (the way the bank makes its money) and so it has lost the opportunity to make profit. Or (more likely) the house doesn't even realise the £180k in which case the bank has lost money and has also lost the chance to make money and the homeowner is out on the street.

Higher interest rates (if they come) are far more likely to affect new buyers rather than existing homeowners (who are more likely to have taken out fixes). Plus if higher interest rates become a factor then that scuppers those wanting to get on the ladder anyway.

Out of interest feel, why didn't you jump in during the last fall in 2007/2009?

Trouble with the level of house price correction which is needed, is that it will strangle the housing marketas people won't be able to pay off the outstanding debt and generate a deposit.
Our house is still worth less than we paid for it (but thankfully more than the mortgage). Stagnant house prices, well below wage increases, for several years decades may help the most.
And yes, you can buy a three bed end terrace for under 70k in parts if the UK. They are the parts that governmental policy of not helping manufacturing industries, and focusing on London centric banking and services, have turned into places noone wants to live.

The last "crash" was region dependent. I am in the Midlands. We moved house at that time and bought our current house at a 25 percent reduction.

Shit! I have said this a fair few times here: the late 80s/90s crash was not in any way a leveller of house prices. It was fucking horrendous. Only those with new mortgages, low to middle incomes suffred - handing their keys back in and living with the debt of negative equity.

Those with larger incomes, older mortgages, felt less of the effect - unless they were ludicrously overstretched. Then, for them too, it was Holy Shit... wave your life goodbye.

A price crash will have all sorts of kock on effects that directly impact working families the most! To believe that it is simply a paper deficit is trite and uber-simplistic.

Feel you seem to fundamentally misunderstand how things work. The banks don't benefit from the deposits, they don't get to keep them. If a house is bought for £200k with a £20k deposit and £180k in mortgage loan the bank doesn't get the £20k when the price falls.

Oh no I do understand,. The 20k is the debitors money, so the first 20k the debitors loose if there is a forced sale and not the bank.

I didn't buy in 2007/09 as I felt the were still too high and my job was not secure. So I wasn't going to sign up for a lifetime of debt.

What I didn't know is that they would lower interest rates to the lowest they have ever been, print money, and prop up the market with help to buy and all that. The housing market now in the UK is very manipulated. With the BTL changes it's looking very rocky indeed for the future.

you can buy a three bed end terrace for under 70k in parts if the UK

..in somewhere dire with high unemployment?