To think it's good news about house prices falling

[brexitstolemyfuture]

The sentiment has really changed in comments sections all over the place.

It is a bubble, no way can something keep rising indefinitely. From my area in the south it's been 10% increases for years yet wages are the same. Average wage is 26k where I am, average house is over 300k.

A slow poping of them would be best for the economy and give hope to those not born when they were affordable. I speak as someone that owns.

Things like the governments help to buy scheme just help keep the prices high, if they didn't offer 20% of the price then people wouldn't be able to afford the new homes and the builders would have to reduce to prices to 20% less. The btl landlords are also a big problem, but it's something would be best sorting out by building loads more houses, especially council ones. More council homes = less demand for rented properties which means all rents would eventually go down, then the landlords would sell making the houses cheaper for first time buyers. Negative equity is a bitch and I've been there in the eighties but we can't keep allowing the property market to be propped up.

What are people supposed to do exactly if the prices go down, they go into negative equity but interest rates start climbing? They can't afford their mortgage, they have to sell but not enough to cover their debt let alone relocate. How can anyone wish that onto anybody?

The jealousy against home owners is depressing. Having a mortgage doesn't make anyone rich, and people losing everything doesn't mean all renters will buy a property (many renters do not want to buy for a start)

peachgreen.

Yep sorry I realised that when I reread your post after submitting mine. Fair play and it's what more people should be doing rather than assuming they'll make some equity in a couple of years

What are people supposed to do exactly if the prices go down, they go into negative equity but interest rates start climbing

Hopefully the interest rates will never raise that far that there's no hope of paying the mortgage, if you look at online mortgage calculators most seem to warn you how much your mortgage will cost if the interest rates go up by 3% or 5%. Mortgage rates went up to stupid figures in the 80s and all of my friends managed to get through it and keep their houses.

Mortgage rates in the 80s didn't pay for the same amounts though, you really cannot compare.

You might be warned and see figures with various increasing rates, but most people still had to go ahead and risk it. I did, many years ago, and I am glad. Someone who started recently will not have pay that much to be safe from a rate increase.

The 80's interest rates were horrendous. Most people only managed to tough it out,'pay their mortgages and keep their houses because they had not been allowed to borrow more than 3 times their income. With many people borrowing 4 or even 5 times their income nowadays and more people having additional expenses such as cars and mobile phones it will be much harder for them to weather the storm. Even utilities have risen in cost by far more than inflation. Living is expensive these days.

Not in our area. Mind you my uncle and cousin had their dif houses up for sale for some time up north and no interest despite lower prices...dependant on area

Actually, I think house prices will drop slightly (but then rise again). I only say this as there are 2 houses on for sale in my street, 1 is very overvalued for what it is (3 bed roomed 1930s house but detached because next to electricity station house thing). They've both been on the market for 2 months now, the expensive one did get an offer but they withdrew.

Further down the road when houses of a similar size were being sold for cheaper (and then getting loft extensions or side extensions etc added on) that was the time to buy a few years ago. I've seen detached houses in next street not sell too, as overvalued or too expensive. The ones I do wonder about (as I saw them being built) are the huge townhouses behind me with balcony at top and overlooks the park but they're big, they've gone up in value since being built. A house almost at the end of my road when renters moved out isn't being sold yet but a huge side extension being built.

Also I think near me there are a few bungalows, I'm sure one will be demolished and planning permission applied for for flats or bigger house.

Oh I'm SE London suburb - but it and areas around it have become very popular in past few years as people can't afford in nearby nicer areas and transport links have improved a lot. As a plus point our local "town" centre has improved a lot with nice shops and cafes etc.

I still dream of them getting rid of a pound shop and putting a Little Waitrose or M&S Simply Food there (there was a Woolworths there before) but that won't happen! sob

It's good news if it means people will finally start seeing houses as somewhere to live not an investment which will just keep increasing in value.

It will always be an investment though. As the prices drop it will come to a value when people will think it is a good value to buy again as houses are always going to be in demand, then the prices will go up again because of the increase in demand.

I don't think they will drop significantly, but they are going to flatline for a while with Brexit uncertainty.

In terms of NE, assuming I didn't need to move I would prefer that to renting and having to move at a landlord's whim. Ultimately if you keep paying you still own the place outright in 25 years whatever. Even if you do have to move it's sometimes possible to rent the place out - and the same is true, you own it at the end of the term. Plus it may be possible to overpay to get yourself out of the situation quicker.

The thing is that prices going down cause problems for some and prices going up cause problems for others. Tbh wanting them to go up so you can climb the ladder is a bit to me because you will surely just end up with a massive mortgage that you would struggle to pay anyway. Surely you'd be saving money for the deposit upfront if you can afford a much bigger mortgage?

Berkshire here. Lots of new houses being slapped everywhere for massive money, yet established houses on bigger plots are languishing cheaper and are on the market for years. It's a mystery.

Remaining Level here.

I typed a huge reply which didn't post. We purchased our home with shock horror a mix of endowment and repayment mortgage. Dh originally had an endowment mortgage which were heavily sold at that time. All was fine for a while. Than we started a family. Again it was still OK. Than we started getting the mortgage shortfall letters. So we had to convert to full repayment and continue to pay into retirement policies.
They were difficult times. When the boiler went we had to borrow money to replace it as you know owning a home has certain responsibilities.
We certainly had no spare money to save.
So no I don't want a decline in house prices. Happy for them to remain stable.

Endowment not retirement.

I agree it's a SE thing. In my area house prices are very buoyant. .
The house I bought 3 years has increased in value by 20% in that time, We bought it as a permanent family home, but we knew there would be massive price increases here.
Any house going on the market in my estate is sold within a week for way over the asking price.
Not that we intend to move.

Definitely slowing down here (South West, 8 miles from Bath). Our townhouse has gone up by 42k since we bought it in 2013 but according to zoopla it's increased by only 4k in the last year. Doesn't bother me as I have no intention of moving but a crash would be catastrophic and as others said the lending availability to FTB would drop.

There is no sign of house prices dropping where I live nor in Woking where my son is buying his first home.

Falling HP's aren't particularly a good or bad thing per se - house price changes (up or down) can only make one group better off at the expense of another, they can't create or destroy wealth.

House prices have plateaued the last few quarters and very marginally dipped. I get the ONS quarterly report emailed at work. We're not talking about amounts that will make houses more affordable en mass, we're talking less than 1%. The conversation about falling prices is premature

I totally agree insta, they aren't really falling yet but the rate of growth month on month has gone negative but year on year its still posative for most places. This is just an early indicator. The same happened in 2008 time but they slashed interest rates, introduced all these help to buy schemes and printed money to then prop it up. These tools are near exhaustion so they can't do the same again. Will be interesting to see what happens this time.

There still aren't enough houses, and there are far less than there were 10 years ago. It's hard to see how prices could reduce.

Well it's not just me who thinks that corrupt money has enflated London prices. Just saw in the FT an article written by someone who explains WHY we are all being asked to pay between 30 -10 times the average salary for out houses. BIG CAPITAL by Anna Minton
"For Minton, this is the top of the champagne pyramid. She describes high prices trickling down through London: billionaires displace multimillionaires, who in turn displace the millionaires who displace the rest of us. And at the bottom of the deck, people living in housing estates find themselves evicted. When their homes are knocked down and replaced with luxury apartments, the process starts again."

It's a fact there is a corrupt money in high value London property and a fact that this country does very little to stop it. However there is no point over estimating the effects- it's a tiny number of units we're talking about

YANBU.

I sincerely hope that house prices do fall. Why? Because those of us in our twenties and often thirties were sold a lie by the generations above us.

Go to school, get good grades. Work hard. Go to university. Get a good job. Work hard. Then you'll be able to afford at least a reasonable standard of living.

I did all of that - mid 20s, good degree from a Russell Group university, professional job, earnings above national average. DP is the same. We have to live in London, as that's where work is, and the same opportunities in our sectors simply don't exist outside of London. We looked at moving further out and commuting in, but quickly realised that with two of us commuting into central London, any savings on rent would immediately be eaten up by the extra cost of commuting, so we're financially no worse off living in inner London (it's not an especially glamorous area, for the record - very socially mixed). We have no family in the region (that is, none within 100 miles of London) that we could live with while we save up.

We live in a very small one bedroom flat. Yet, this flat is (Zoopla tells me) "worth" £350k, and rising. Mortgage calculators tell me that to get a mortgage where we could afford the repayments, we'd have to come up with a £150k deposit. Fat fucking chance.

My desire to own a home has nothing to do with getting rich off the back of it, or watching my investment grow. It's about security. At the moment, our landlord (a baby boomer) could evict us on a whim at 2 months notice - we need not have done anything wrong. I would like to be able to paint the walls in a colour I like, not the landlord's bland magnolia. And I would even like to be able to have a pet without having to ask the landlord. These are basic things that my parents take for granted. And are they really unreasonable?

I could not possibly bring a child into a situation where we do not have a reasonable level of security in our living arrangements. Quite apart from that, we couldn't afford a second bedroom for the child, let alone childcare, the extra food, the clothes and so on because so much of our money goes on rent. I very much doubt that we will be able to afford this at any point before my ovaries pack up, unless my parents die young and I inherit prematurely. There's a large number of people in my situation - not a single person in the office I work in (>30 people) has children, and we're all graduates in good jobs. There's going to be a whole generation of us born in the 80s and 90s who will simply never be able to have children - and then who will pay for our pensions when we get old?

So no, OP, you're thoroughly reasonable for hoping that house prices will fall, because while some may find themselves in negative equity and will not be able to move so easily, at least people of my generation will have half a hope of having some security and the basic standard of living that our parents experienced.

And yes, I'm voting Labour, because I do not see any hope for me or my generation in the Conservative manifesto.