To think the housing market is about to collapse

[sandrabedminster]

We seem to be getting almost daily story's about it on the edge, no surprise really given the ridiculous prices.

Now standard life have suspended their commercial property fund.

Is it about to go back to 2008 all again?

Bengal - Say you have a £220k mortgage on a home that is now worth £200k. You get a job on the other side of the country or get married to someone who also has their own place. So you need to sell.

But if you do, you will owe your lender £20k more than you're going to get for your property. So you can't sell, unless you happen to have £20k you don't need.

If you can possibly afford to keep paying the mortgage, it makes sense not to sell while prices are low. Most people rent out under these circumstances.

That's why conventional wisdom says rents go down when house prices fall - there's suddenly loads of nice rentals needing tenants! It remains to be seen whether it's still true: a lot has changed since the last deflation.

If the value is less, and all other houses are less? I don't understand how people get stuck? (as others are saying up-thread)

The loss is crystallised on a sale.

What does collapse mean in terms of a housing market? Does it mean they just don't sell?

Negative equity is only a problem if you want to sell. It recovers when the cycle turns up again, but then so do houses you might want to buy!

I've heard that written before its only partially true what about if the market is so inflated it will never reach those price again.As someone who is coming up to eight years after being burnt in a housing crash the remaining property has still not recovered the price I paid. To be perfectly honest I will never recover the money I lost its never going to happen the only upside is I am on very low trackers........if you buy and its long term as in 20 years ups and downs won't bother you, if you buy at the top of the cycle it could take you 10 plus years to recover depending on equity levels and how far prices go down while you could be in a variable interest rate going one way only.

Collapse means, no-one is buying as prices are dropping and no-one lends it starts the market spiraling,when you have those conditions the only buyers are large funds. Think Blackstone who own half the rental market in the US and a fair slice of Ireland and a good chunk of Spain all bought at the bottom of the market as they're only people with cash to buy.

I'm not talking down the market everything I have read from anyone with some insight into property suggests the UK is in a bubble its by no means alone. Australia, Hong Kong too name a few are in the same place.

We couldn't afford Wimbledon this time 16 years ago, we shifted our search further down the A3, the house has gone up 168%.

I sat down one rainy Sunday afternoon, and tracked our house on a particular website, after the crash in 2008 the market failed to rise in one particular quarter but that aside property is still a good investment.

Standard life temporarily suspending their commercial property fund doesn't have a massive amount to do with a house price crash really...

They have done it to stop people trying to panic and pull a load of money out. Commercial property funds like that don't carry a lot of cash as, obviously, the money is tied up in property. If you get a run on the fund and too many people wanting to withdraw, you need to stick a load of properties on the market pretty sharpish to create liquidity and pay them out. Seemingly standard life don't want to do this (In any case sales take a couple of weeks at least) and would rather hold on to their property. They have said they don't want to sell too cheaply just for quick liquidity, as this would be to the detriment of their investors who are remaining invested in the medium and long term I.e. The fund thinks the property will continue to be a good investment and there is no need for a fire sale.

That said, standard life and some of the other funds have been devalued about 5% on the back of brexit. That's a huge loss £££ when you consider the assets they're holding. Hopefully will bounce back.

As for Bristol resi - there is a big supply and demand problem in the area so I don't see prices dropping any time soon.

Brexit the gift that keeps on giving
^this

Over the last 5 years we have been looking overseas for a 'holiday home/retirement' place. Initially we could have got a great bargain as the places we were looking at - Cyprus, Spain, Canaries were all in economic downturn and there were 100s of hugely reduced properties on the market.

In the last year they have all been rising steadily and there aren't as many repossessions etc out there.

I'm wondering if the UK is going to go through this now. In some places houses dropped by 50% - both in tourist areas and traditional 'local' areas. That would be a disaster.

Part of the reason we never bought was both of us felt as if we were 'dancing on people's graves' when it was a luxury purchase on our part IYSWIM. But I doubt most people would feel the same if it were a necessity.

I feel nervous and the business analyst on Newsnight last night did little to allay my concerns.

Our house is on the market and there is little interest. We wanted to move by October to get into catchment for senior. The area is pricey and we have been waiting to move into that area for 10 years, when we could scrape in. I'm worried we wont sell and wont get into catchment in time.

Watching the market carefully......

ExltEvedallas , Spain is in an entirely different situation from the UK!

There has been a massive recession for years (50% of under-25s unemployed now).

Not helped by being in the Eurozone.

Totally different. The 2008 "crash" here was merely a blip compared to poor Spain.

Interesting to hear of the situation in Spain.
We only hear about the UK and Germany. I know Ireland has lost many of it's brightest to USA/ Australia.

If the Government had let the house prices fall as they should have in 2008 this would have all been over by now. Instead they kept propping them up with ridiculous schemes. Disgusting what the Government has done to housing in the UK.

It was bound to end in tears for those who overextended themselves.

house prices are insane - particularly in London and the South East
young people who don't inherit from parents/grandparents cannot afford to buy - even with the lowest mortgage rates for years.
So many piling into buy to let and 'being good landlords (in their estimation)' has just exacerbated the chasm between the haves and have-nots.
Something has to give and I hope the housing market returns to reality so those towards the bottom of the heap can afford their own house to live in.

I'm worried about this. We bought a house quite recently and am scared we could end up in negative equity. I'm a SAHP, so if anything happened to DH's job we would be pretty fucked basically.

House prices outside London and HC's have barely risen after 2008.

I'd be interested to know where all those complaining of the Ref vote live - I suspect London and the HC's!

I've heard that written before its only partially true what about if the market is so inflated it will never reach those price again.As someone who is coming up to eight years after being burnt in a housing crash the remaining property has still not recovered the price I paid. To be perfectly honest I will never recover the money I lost its never going to happen the only upside is I am on very low trackers.....*

It's still a little irrelevant once you're out of negative equity, which happens as you repay your mortgage as well as with a change in prices.

I bought at the top of the market. I sold for less that we paid.

I still got back more cash than I put in initially as I had 8 years of making mortgage payments.

So yeah, in theory I 'lost' £xk - but I got to live in the house I really wanted, in the perfect area and wasn't paying rent for hide 8 years.

It's not as black and white as "house worth less than I paid for it so I'm fucked"

House prices outside London and HC's have barely risen after 2008
They have risen, but agreed not to the peak 2008 prices.

No, we're only fucked if DH loses his job for some reason, (which could happen as there have been redundancies in his company), as we have only been making mortgage payments for a short time and I don't work. So if we end up in negative equity and are unable to pay the mortgage, I suspect we are a little bit fucked. But then, none of that might actually happen, so it's all hypothetical atm. We haven't overextended ourselves with our mortgage and can pay it easily, but obviously we couldn't it if DH lost his job. Negative equity would be pretty disastrous for us in those circumstances.

House prices outside London and HC's have barely risen after 2008.

I don't think that's quite true. We bought in 2008 just before the crash and we've recovered to back to what we bought at. We won't "make any money" on the sale of our house but we have a large about if equity from not having to pay rent to someone else.

Actually I'm quoting a woman on BBC breakfast. Prices here fell by 30K and have risen 10k - mainly in the last year or so.

I think you only have to look at the map of the UK to see where the majority of Leave voters where - OUTSIDE the Capital and HC's!

My question to every thread and post about the referendum, and to the majority of Remain posters practically verbally abusing the Leave side is "yes, but where so you live????"

Basically, it's fine to kick off if

• you can afford to live in London
• you can afford a home and are now in a position to be thinking of a second home - 'forever' home
• you are a sahp and can afford a partner working

But do not dare complain if:

• you couldn't afford a home in the first place as they soared above and beyond ordinary people
• you would never get a mortgage due to increase in zero hours contracts
• you rent in unstable conditions

Selfish bastards, those brexiters.

call I don't understand your post. The EU didn't cause the house price increases or zero hours contracts or unstable rental market in the UK - it just didn't. Brexit will also not solve them especially zero hours contracts.

Well I was made redundant so that's why I haven't gone back to work; it wasn't necessarily my first choice, but yes we can afford for me not to work. Where we live (Home Counties), the cost of daycare would cancel out a huge portion of anything I could earn at my level in work. We live here because of my DH's job so we have no family or friends here yet, there is nobody to take my DD for me while I go to job interviews or anything like that.

In my dream scenario we would move back to NI (where the majority of people also voted remain btw). We would have my family nearby and could afford a huge property for the same price as my teeny house.

I don't want to live here. I tell my DH this every day. I hate the Home Counties (sorry) and I hate the fact I don't have a job and have never had a decent one because we have had to follow DH's job around. But, this is where his job is, a job which he spent a long time training for.

I hope you realise before you bang on about that lot in the SE that we are human beings who have our own problems and probably aren't that dissimilar to you. Given the choice I wouldn't be here.

Good point, whois.

Not around here. There are very very very few one bed flats around heres for sale. My son is in the middle of buying at present. He has not cut his offer price due to Brexit. We looked at what else was for sale and if prices had dropped and they haven't for that kind of small first property.