To worry about the predicted 30% fall in London house prices

[feellikeahugefailure]

This would have huge knock on affects if they let this happen to everyone in the country.

It wouldn't help people that cant afford a home, it would probably make them worse off as banks won't lend. The poor will be hit the hardest by any downturn.

Mr Carney does need to do something imo, was surprised that the rate wasn't dropped. But it will have to be in August.

There needs to be a price correction on london properties - and its environs, and I speak as someone who would lose out. it makes no sense to have so many properties out of reach to teachers and nurses and doctors and other key workers. My area is hardly beautiful and prices are terrible.

I think worry about recession and job losses first, house prices second.

Of course, its going to be really shitty for those people who lose their jobs and then can't afford their morgage and have negative equity ... there are going to be many such victims of brexit, I fear, and they won't be the overpaid bankers.

House price predictions are always wrong.

Having said that, if my London flat lost 30% of its value it would still be worth slightly more than when I bought it five years ago, so not a big deal except for people who bought very recently.

I am not a supporter of anyone being in negative equity. it happened to me with my third London flat when the value went about 15% below what I had paid for it and it was pretty tough to be honest.

but, there will be a lot of people who bought their houses a few years ago, prices have gone up and even if they go down 30% that will still put them at a value that is more than they paid for it.

The problem is that people see the price or valuation at any given time as money in the bank and it isn't. a house can only be sold for what someone is willing to pay for it. London is artificially high because people from outside London with money to invest have been willing to pay stupid amounts. the areas I feel most sorry for are those like in Cornwall where the average wage is around £19K a year yet prices are 10 times+ that.

we cant on the one hand moan that people cant get on the housing ladder because of the prices but on the other hand expect only our property to keep going up and up. personally, I would take a hit again if it meant the whole thing started being a bit more reasonable and accessible to first time buyers.

House prices have dropped before. I sold my first house for less than I bought it.
There needs to be a correction in house prices.

negative equity only affects those that want to sell and the price they are being offered is below what they paid. Or those downsizing or not buying after selling

For those that remain in their homes NE is a non issue.

Even if there was a significant house price drop many young people would still struggle to buy. Cost of living is likely to rise with the falling pound. There will be static wages and threats of redundancies of the predicted recession occurs. Finally the fall in house price may well not see any sort of change in sky high rental prices as landlords will still have their mortgages to pay and won't sell houses in negative equity.

That said London house prices are insane - said from the perspective of someone living in Doncaster where our 3 bed semi wouldn't buy you a Wendy house in London

Equity definitely has a big effect on investment and renovations in housing though. My street has town houses selling for about 25% higher than 3 years ago, already a lot of people have started investigating side/rear extensions and loft conversions (ours have unusually large gardens for town centre town houses). The extra equity means that the banks will lend them the costs for the improvement without taking on the risk that the improvement is worth less than the cost which stimulates a lot of extra work for tradesmen.

So while i can see how high house prices is bad for first time buyers it is also good in the sense that it encourages people to improve their properties which stimulates the economy by keeping tradesmen and suppliers busy.

Other examples are friends who have released equity in their home to start up a manufacturing business (CNC Machining business), they now employ 2-3 staff to help run the business.

OP it will help those who have a deposit saved but still can't buy because prices are so over inflated.

I just hope May puts some more restrictions on BTLers and foreign investors. Then there's a chance that people who have been waiting ages will actually be able to buy. I say this as someone who is fortunate enough to have bought already.

If London suffers a correction of -30% I'm fairly confident that it would have absolutely no impact on the market in my part of the world, while house prices in the SE have soared, ours have remained fairly static. The London situation is a bubble driven by foreign investors, bubbles always burst eventually.

If there was a big drop in London I would be very surprised if there was no knock-on effect in the rest of the country.
Firstly some of the higher prices realised elsewhere are driven by the flow outwards from London, secondly the market is partly dependent on confidence and it would make people worry.
But it's London that's overpriced so the rest would probably fall by a lot less and the gap would narrow again.

If Londom house prices dropped by 30%, it would mean the arse end is falling out of the UK economy.

Unemployment would be widespread, which would mean that there would be even higher unemployment in the rest of the country. Mortgages to buy these newly cheap houses would be out of reach of all but those with hefty deposits, so it won't help first home buyers at all.

You do not want house prices to fall by 30% - it cannot happen in isolation.

If you want to move and yours falls so will the price of the one you want
to buy so it is mainly a problem for those who bought recently or someone who wants to release capital for some reason.
The interest rates will go up if Sterling continues to fall.
In particular Sterling against the US Dollar is a good indicator
as so many things eg oil are traded in dollars

Did it concern you at all when some houses were going for a tenner up North, no, thought not.

I'm sure the many who have been completely priced out and find it difficult to save a reasonable deposit because of high rents, would be very pleased to see a hefty drop.

But I really don't think prices are going to plummet. I think they'll come down gradually to something that would still seem overpriced by traditional standards, but less than the current craziness.

Lately I have noticed several new build blocks of flats offering reductions (Outer SW Lomdon and Putney in particular) but then they were stupidly overpriced in the first place - £650k for a small one bed, FGS. A lot of them were largely marketed initially to Far East investors, who are losing interest, and now the developers are wondering why ordinary Londoners aren't willing to pay daft prices.

Might mean people just buy a house to live in rather than to make money. Good news for young people.
My house has not increased in value in at least 10 years. Doesn't matter to me.

I think a house price drop is long overdue. What is the point of prices being so high that nobody can afford to buy. Or pay ridiculous sums for not very great houses. Prices in a lot of areas outside London haven't gone up that much. That's if there actually is an area outside London. I wonder sometimes.

Houses were going for a tenner up north because no one wanted to live in those particular suburbs, and the cost of restoring the derelict properties was approaching their sales value.

The same doesn't apply in London.

Bluntly, we have been building a shortfall of housing in places where people do want to live for about 20 years now. The house builders are going to stop building shortly so it will only get worse.

Home owners act a bit differently if they don't have to sell (ie can still afford their mortgages). People tend to rent their place out rather than sell at a loss. If house prices do go back at a rapid rate of knots, it means that there is mass unemployment.

House price falls will not help first home buyers as the banks will tighten lending criteria because they want to protect themselves against negative equity. It will only get harder for first home buyers. Anyone self employed or lacking a 20% deposit will not get a mortgage. Just like 2008-09.

The only way out of this mess is to build more housing and quickly. This realistically means government intervention - they need to build more housing of every tenure.

Ruby, building more housing won't help as long as investors use them as deposits. And re 20% deposit, a lot of people will have that if prices went down as much as 30%. Sadly I don't think they will go down that much.

The only way out of this mess is to build more housing

On all the spare land London has, presumably.

Alternatively, move the Home Office to Rotherham, the DTI to Sunderland and the Treasury to Port Talbot.

Indeed. Or try and improve things for business in the north by dividing the infrastructure spend more equitably so the north's per capita investment is more than 5% of London's.
Subsidise the southeast disproportionately to the extent that has been done in the last few years and it's no surprise that people end up choosing to live there and the housing crisis escalates!

It's happened before and it will happen again when you buy property there is always a risk prices will fall people need to stop thinking about it as a secure investment it's not

Property prices spiral out of control more people are pushed out and then it crashes but everytime the prices rise higher the next time around

A couple on an average wage would struggle to buy in London now but this time it has hit the middle class shock horror they now are priced out of London (or the nicer parts)

Prices have to drop I don't want to see London continuing this social cleansing people from all wage brackets should be able to afford to live here in decent homes

Enthusiasm, a couple? I always think of how it is for one person. In which case, yes please to a fall even more!