Does anybody think property prices will actually go down?

[skyofdiamonds]

I feel so miserable about getting onto the ladder and just think prices are ridiculous at the moment (in my area). I live in South England, 60 minute commute to London.

Does anyone think property prices will drop in the near future?

I am jealous of all the people the age of my parents, who bought houses so very cheap, that are now worth so much more. This will never happen again, will it?

They are going down and interest rates are at an all time low which is great for my son aged 35. He has spent the last 15 years saving every penny for a deposit on a 2 bed flat in an expensive part of Surrey and is finally about to own his own home instead of living in shitty HMO's to save money. I'm so pleased for him.
He could have lived here and saved but if you don't work in the NHS there are no jobs here.

Have you looked at help to buy? I'm just about to buy a flat through this scheme and our deposit isn't huge for the south east. Our commute will be about an hour & our deposit is £15k which is nothing compared to the £60k we would have needed in addition if we didn't use help to buy.

There are schemes available and it's worth looking around. I felt like you did, was worried sick but we're finally getting our own place.

It's a buyers market in some areas in London at the moment a year ago you would have got the asking price

So yes I think it is likely

If prices drop then the market is ripe for investment and you will be up against speculative buyers.

You have my sympathy. The housing situation is absolutely dreadful. And the cost of going to uni is awful. Being classed as financially dependent on your parents till 25 thereby being denied benefits; awful.

If it's any consolation the older generation had some things more difficult: we didn't tend to have daily showers, there was less 'stuff' generally, some things were more expensive eg clothes and foreign holidays, adults were less 'tolerant' of young people and there was less child protection.

I think there is likely to be a recession post brexit and that an inevitable result of that drop in consumer confidence will be a stagnant property market which then leads to prices dropping slightly (because some people will always be in a situation where they have to sell whatever the price) despite the fact that interest rates would probably be kept deliberately low.

However a crash of the kind you're hoping for OP - no.

In London and the SE: no.

When interest rates go up, you'll get a flooded market. All of those first-time buyers who've bought new builds/off the plan developments and who were approved for massive mortgages without a significant deposit will find that they can no longer meet the repayments.

When there's an oversupply that's not being met by demand, prices will decrease.

This is what will likely happen.

What won't happen is the housing marking crash of 2008 which occurred for entirely different reasons.

I sold our family home in SE London 11 months ago. Looking at Zoopla now I see the exact same properties are about 3% lower now. Not much change, but post Brexit vote, and prior to the realities of Brexit arriving, I think people are certainly less positive now. Throw in the inevitable rise in mortgage rates & I think , in London at least, thinks have topped out for now.

Properties are expensive anywhere there's employment and services are reasonable. They are cheap in some rural areas, but that's because there's no work available. So unless, like Cornwall, there are lots of people who want to move into the area, the level of wages locally dictates prices. Economics 101.

superbeagle I'm not sure you are quite correct.
Reality is as house prices start to dip, fewer people put their houses up for sale, which means the market is much smaller, and consequently house prices at present seem to just level off rather than dropping dramatically.

Reality is as house prices start to dip, fewer people put their houses up for sale, which means the market is much smaller, and consequently house prices at present seem to just level off rather than dropping dramatically.

Of course, but as the interest rate rises, those with massive mortgages who've been approved during this low period will find that they cannot make the repayments. This will necessarily lead to people putting their properties up for sale.

This refers only to those with large mortgages. Not those who have been in the housing market for years.

My DP reckons that house prices will drop back massively as many of the buy-to-let landlords sell as a result of the new tax changes. This opens up the bottom of the market, pushing prices down.

(He is generally right about such things but may have made this up to stop me pestering about moving house.)

It's a bubble. All bubbles eventually pop.

It's a bubble. All bubbles eventually pop.

it's not a bubble in some senses. Interest rates are really low and driving asset bubbles (property, stock market) because you can't get a decent return on money by putting it in the bank. there are so many more players in the property market than home owners.

But yields are really low right now. If interest rates went up to 5%, like many think they should, all of the sudden your yield on property gives you less than a bank account.

I think property prices won't drop until interest rates go back to normal.