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.

If the answer is no, then maybe you can't buy a house.

Well, yes, that's what I'm saying...

**when did that stop some patronising smart arse on MN labouring a point?

Wow
Reading the thread there's a pretty aggressive tone running though 3 posters in defence of the housing market.

Great how am I "defending" the housing market? What is there to defend? It's not a person. I think that's a really weird thing to say

Prices may dip for a bit, they often do before an election, but ultimately they only go in one direction - upwards. Land is a scarce commodity - they aren't building any more of it!

I sold our last house in London at a loss in the 90s recession. It does happen.

i don't mind prices are dropping in London as I hope to stay in this house until I die in at least 30 years time and if prices drop it will make things easie for my children one of whom is buying and I think (if it goes ahead) got 2% off the asking price. She tried for a lot more off and didn't get it but who knows what the "right" price ever is.

Zoopla says my house is 2% down in 6 months but 0.1% up last 3 months (bit weird that one), and 2% up over the last 12 months. (outer London borough).

In very non-prime London, where I was looking at flats with a dd some years ago, a very ordinary 2 bed that would have sold for £250k-275k in 2010-11, depending on condition, is now routinely on the market for £500k-550k.
Such rises are simply not sustainable - these are first time buyer properties, but how many FTBs can now possibly afford them?

For the sake of everybody's children, and young families crammed into too-small accommodation who can't afford to move, or who are at the mercy of often greedy and unscrupulous landlords, I would like to see prices fall to more affordable levels.

Media property 'experts' - so often people with vested interests in prices rising, have traditionally talked of prices 'improving' - aka going up. Their prime interest has so often been the value of their own portfolio, and sod anyone who couldn't afford even one modest property.

At least many estate agents, for so long drivers of rising prices, are now encouraging sellers to price 'realistically', because they need to sell to make any money, and at the moment, many - at least in London and the SE - are struggling to sell much at all.

The last recession (from 2007) had little effect on house prices as the expected fall in interest rates offset wage freezes, making housing affordable. There will be a structural fall in house prices if UK inflation and interest rates rise too rapidly. Brexit will probably result in higher inflation but if the BOE manage interest rates carefully the fall may turn out to be a house price freeze rather than a drop. Political intervention is the wild card.

I'm struggling to understand the poster who says she won't be able to afford to have children before her ovaries pack up because of the cost of housing in London. If having children is important then surely you would look for work outside of London in areas where housing is cheap. It might mean taking much lower paid work in a different field but it might be the case that even with much lower pay you can afford to have children. I wouldn't sacrifice having children for the sake of working I a specific field for a specific salary which isn't actually affording me much in terms of the lifestyle I desire to have.
When you take into account the savings you can make on rent and general living costs (plus lower taxes and student loan repayments) you might be much better off in lower paid work outside of London. Even the cost of childcare is much much lower outside of London.
I prefer to work to live and not the other way around.

As a Londoner who has moved around a bit I can honestly say there are very few jobs for which you must be in London. And for those few you've just got to suck it up and move to commutersville in Herts, beds, bucks, Essex, Kent like the rest of us where you can easily pick up a reasonably priced property. Yes you have to pay up commute but as the poster above said, really? You'd let that dictate whether or not you have children?

I worked with senior people 30 years ago even who had to commute from Kent and Herts as London prices were too expensive. It's a drag but it's always been the way for those working in London.

Prices are high at present out here (outer London) but dropping a bit.

The £300k terraced house when you paid 6% interest (£18k interest a year) are now £450k interest 1.8% £8100 - it is an interesting comparison. The interest rate means you pay £10k interest less a year on a much more expensive property and my daughter has been offered 5x salary as a multiple (in my day it was 2.5 joint salaries or 3x one salary). So it is the 5% or 10% deposit which is the harder thing to get on a £450k house more than the actual cost of the mortgage even adding back in the repayment mortage type (as long as rates stay under 2% rather than up to 6% or even the 12% I used to pay.

a house price fall is never good news for the economy - bakewell had the right of it, a slow decline over many years would be useful. We've got 10% down on an enormous mortgage - given stamp duty and estate agent fees we'd quickly be into negative equity.

garden
I'm glad it's worked for you but your post still comes across as the same old 'it worked for me so...' patronising nonsense other posters have done.

I'm about to move again to a lovely house in a nice area. But the difference is I can see how I'm very fortunate to be in my position and don't think people have the same options

Eg. Family ties, support for childcare, elderly relatives, needing to be near their child's other parent after a split, issues finding secure employment, not having a 2nd income, student loans from graduate study etc.

I get really wound up when I hear people saying "uts easier than people make out" like somehow they are the fountain of all knowledge and everyone else isn't trying hard enough or is just picky. I'd not dream of coming out with some of the crap on this thread.

Yeah it wasn't easy for us and we are over mortgaged on a 30 year mortgage with 10% down (we bought last year). It's always a lingering fear at the back of my mind - our mortgage is so enormous that overpaying is like using a teacup against a bath tub.

So no, I'd rather prices plateaued over time, I don't want any kind of economic crash to happen...

pottered, yes it's very difficult.Hopefully though you will own the property out right in 30 years time (I paid a mortgage for at least 30 years and now own the house) which will give you a security the renters never have.

Also even with inflation at only 3% over time that amount will be less, over ther 30 year period.

Maisy - in your examples those are still life choices. You choose a career. You choose to have a child. You choose to stay near family. You choose to have only one income. You choose to take out a graduate loan. Etc.

If that means you also have to choose to stay in an area that you can't afford, yes it's absolutely fucking shit. But those choices are why you can't.

If I can do it on 18k in less than a year - so can all my other friends who are pissing money up the wall in London, and will be moaning in 10 years when they still cant afford to buy.

Yeah maybe, but you and your friends are not representative of the entire country. Come on, you must appreciate that. I mean, just for one, most single people on an £18k salary could not afford to save a £20k deposit in less than a year!

How could you save a deposit that is bigger than your annual salary? Didn't happen!

Garden clearly says they were both on 18k. So that's 36k!

Still bull. £18k each, and after tax they saved one whole income? Not likely. Certainly not something everyone else can do

Agreed I can only see that happening in a year or so if you both lived with parents for free and paid nothing for food, bills etc. It took my DP a very long time to save up his deposit, as I said upthread.

We saved £16k in a year, it was probably 40% of our take home pay and we were renting, it's possible if you don't run a car, have dc or any high expenses other than rent.

Still rising where our flat is. And selling pretty fast.

I think it would be good if London deflated a bit, and the rest of the country slowed whilst wages fought up. Not sure if that's possible though.

Suspect the bottom will fall out of some areas/types of build (new build, buy to sit empty type flats).

Two people on £18k in her case rather than one. Still, not something most people could do.

Running two £18k salaries through HSBC's how-much-could-you-borrow mortgage calculator gives a max mortgage of £171k. So for a £200k property you'd need a £29k deposit.

Take-home pay for £18k/yr salary, if you have no student loan and aren't making any pension contributions: £15,407. So between two that's £30,814.

£30,814 - £29,000 leaves you with £1814 for two people to live on for a year. Hats off to GardenGeek and partner if they managed that!