To worry about falling house prices

[Ll81]

They say prices in central London have been falling for a while and this is rippling out to the rest of the country. Also lots of talk about raising interest rates and they could also be another downward pressure on prices along with lots of EU nationals leaving.

Anyone else worried that falling prices may mean many that have bought in the last few years maybe stuck in ne?

A gentle decline would help most people.

A dramatic crash would cause a lot of problems and would potentially make getting on the ladder harder for first time buyers.

Difficult situation.

there are substantial tax disadvatnages to buying for investment now, higher stamp duty (+3% from memory) and can't claim mortgage interest back at anything excpet 20% regardless of whether you are a higher rate tax payer.

HongKong yes they crashed but look at the increase now.

It's the same as ever. It will go up and it will go down. Then up again and crash again.

It's timing for buyers and sellers. No one wants to buy at the top but it's not always easy to call the top.

It varies so much, where I am prices have barely changed in ten years. I think the problem is London and SE not the whole country.

When we moved away, from the south, house prices were low. Now, the estate we lived on some houses are now up to £400,000, whereas we sold ours for £160, 000. Absolutely sickening.
We wouldn't be able to move back; unless prices go down again. We definitely lost out.

If you buy as an investment, or expecting you'll want to move into a bigger place later …

All investments can lose value, even most of their value
This is one of the risks you take when you choose to buy rather than rent
Especially if you chose btl

However, unless the economy crashes and stays crashed for several years, which imo is very unlikely, prices should regain pre-referendum levels within at most 10 years.
So inheritances should recover too, longterm.

Whilst they are dropping and people are going into negative equity, people are going to be wary about buying until they are certain they are not going to drop further. people in NE will just stay put.
A steadying of prices will be gentler all round.

And yes mortgage lending is a different world to what it was ten or twenty years back. I just remortgaged after separation and it was a gruelling process even though I earn more than I did and was wanting to borrow a comparatively modest amount. They couldn't fling enough at me in 2003 and I was on peanuts.

Yep myself & some of my friends were looking at moving. Lending is so much stricter. Some of us borrowed 6 x our salaries with interest only mortgages & low deposits when earning 25k. I believe now you can’t even get a interest only mortgage unless you earn 100k as an individual.

I think prices do need to drop. We couldn't afford our own house now, and we've only been here 5 years!

Bought for £400k and now going for £700k. Crazy pricing.

Not in London but in an area with masses of building going on. A 2 bed here is over £300k and are meant to be part of the affordable housing scheme...

I give zero fucks if house prices fall
Because I can’t afford to own one. So I don’t really care if you’re stuck in your nice home that you own yourself for a few more years than you might want to.

Negative equity shouldn't be such a problem as in 1990 because people who bought at the peak in the second half of the 80s were buying on a 100% mortgage. The 10% deposit being asked now gives a bit of a buffer before ne kicks in.

My house 'sold' last May. We were exchanging when the people we were buying from pulled out and the chain collapsed. We had accepted the offer in February.

3 weeks later the estate agent said we should put it on at 11% less. So basically in 6 months there had been a huge drop.

We are in Surrey.

house prices are important for the UK economy, so matter to everyone even if you are not directly impacted. A sudden crash would not be positive, gentle long term stagnation would probably be the best way of the current mess. When it becomes clearer what Brexit is actually going to look like hopefully we will know what the impact on the economy will be.

I keep seeing posters mention NE. Do you mean North East England, Wales, Northern Ireland or Scotland?

NE actually does mean the North East to a large proportion of the country. Just realised you all mean negative equity.

Everyone should give some fucks if house prices fall a lot - not out of solidarity with the over stretched, but because it’ll lead to a more general downturn as people cut back on spending and that will affect more than just homeowners.

I always find it strange that people think houses could crash without there being any negative implications for the wider economy that they’d somehow escape.

xpost snow, totally agree.

Prices are still rising where I am.

Objectively I can see that they need to drop.
Selfishly, as a home owner, I don't want them too.

I would prefer it if our economy didn't run on the basis that house prices are rising faster than anything else. I will take the hit on my house, but not planning on moving anyway.

Botanist I agree. When house prices crashed in the late 80's the economy tanked. I remember lots of boarded up shops and many businesses going bust. I can see it starting to happen around me nearby in an affluent part of London. Several estate agents have closed down. Brexit will compound the problem. I think we're in for a bumpy ride soon economically.

The crash in the late 80s was only significant in the SE though.

I bought my first property in 1982, the late 80s didn't really impact the my property value.

It'll lead to more accidental landlords. I was one. I bought a flat in 2005 for £65k, it was finally out of negative equity in 2014 when I finally sold it. There won't be more houses on the market for new buyers as owners won't be able to sell.

Otoh, the early 90s recession that resulted from the crash in house prices, my parents lost everything. Fun times.

I agree regardless anybody that doesn’t see tough times ahead is dr pangloss! I’m not sure it last to be relished.

You might win from a house price crash if you can hold onto your jobs...