People talking about houses dropping 30%

[ayvian]

AIBU to think they should shut up.

Banks are still lending, furlough has saved millions of jobs and no one is going to sell their biggest asset at a 30% loss. It just won't happen all it will create is a mexican standoff that will freeze the market until buyers get a sense of reality. We want to move, but not that desperate to accept a loss of what something was worth a few weeks ago. We'll hold on. It's wishful thinking that anyone can get a bargain right now

@OneandTwenty you are just perpetuating the myth that renters are feckless losers who made bad decisions. It’s utter rubbish and shows a total lack of understanding of reality. What about people who can never buy because the housing market is too expensive regardless of full time income and no kids - that is the current situation for many many people

You are missing my point. We should agree to disagree.

There will not be a 30% drop, prices are likely to stagnate. The only way a 30% drop will happen is if house building goes into overdrive and there is a massive oversupply (won’t happen).

The big re-set at the end of the year, which eventually leads to house 3.5x average and interest rates at 5% will equal out society

There will be a lot of people rubbing their hands with glee at this.

A lot of people are mortgage free
A lot of people have cash in the bank.
Not everyone is reliant on someone else paying them a salary.

Saw something on a different forum the other day where someone asked who has £1.9million (or something like that) in cash to buy a place in Central London

My reply would have been, quite a few people.

If you got rid of all rental properties does that include council housing as a lot of council properties are actually owned by btl landlords who lease their properties to the council.

What would happen in my circumstances where we are selling and going into rented for a few months because if we buy the place we have our eye on we can’t move in till it has been rewired, replastered, replumbed and it has a new kitchen and bathroom

Where would we go?

A tent in the back garden?

What about if you move to a new area or are saving up to buy. Where do you live?

Those exiting the care home system, would they end up on the streets if there were no rental properties?

What if I don’t like staying in hotels and like the freedom of a 4 bedroom house with private swimming pool for holidays in the UK.

Are you saying that there would be no more holiday let’s?

Prices are already dropping significantly on Rightmove.

I think 30% is a conservative estimate,it is likely to be more than that.

I remember several house price crashes,this is going to be be far worse.

Fingers in ears......

Indeed and even if some areas do see that it’ll be in small pockets of the country that are reliant on trades worst effected like tourism

Unfortunately for Cornwall telling everyone to stay away this year means they could be worst hit

An area where unemployment won’t be massively affected has no reason for prices to fall

Talk of worse than 30% has no basis on anything

No economists, banks or surveyors are predicting that

The same people predicting bad drops are still predicting a recovery next year

Of all the doom and gloom it’s only going to affect those who have no choice But move
Anyone else can wait a year or two and will ride it out

littleblackdress04

and you are perpetuating the myth that home owners are rich and part of the top level of our society, or that people were born wealthy and are privileged if they were offered a mortgage.

I never said BAD DECISION, I said choice. You are making a bad one, not me, I am not judging. Why would I, it makes no difference to me.

It's also incredibly naive to imagine that a property crash and recession are a positive thing.

Are you saying that there would be no more holiday let’s?

It's pretty safe to say that inland tourism is going to increase massively for at least a year or so, and the holiday lets will fly off the shelves as soon as restrictions are lifted a bit more...

Holiday lets - also at the expense of housing for local communities. Rich city dwellers should not be allowed to buy housing in areas like Cornwall & some Cornish towns have taken steps to ban this too.

When you have to pay £1200 to a landlord every month, how can you even start to save for a deposit? And it’s the renters fault for spending too

In short Yes

We need to be commutable to London and have 4 bedrooms and we are only looking at £1000 per month.
If we can squeeze into 3 bedrooms or even 2 then it becomes cheaper.

Friend of dds is in a really nice shared house with all bills paid (with a cleaner once per week) and she pays £550 per month because she has just come to London and it is her first place.
She is the only single person in the household

Do you need to be ''commutable to London'' now though?

Maybe you do, but the vast numbers of londoners who will right now be realising that no, they no longer need to be ''commutable to London'' might actually create some new stock.

I don't think people will all be working 5 days a week from home but polls were showing that most people would choose 2 days a week at work, 3 days at work at home, and now, more employees than ever before are set up for that.

Maybe you do, but the vast numbers of londoners who will right now be realising that no, they no longer need to be ''commutable to London'' might actually create some new stock.

technically it's more the companies who have now put systems in place and will realise things work - mainly - just as well when workers WFH.
Most commuters only do it because they get more for their money away from their place of work, not because they remotely enjoy it!

The point is though, most people take on a mortgage for the best house they can afford against the commute they can tolerate.

A commute that had to be undertaken five days a week might have been completely intolerable but really quite bearable if it is 2 days a week.

I don't see why companies won't allow most of their employees to continue to work from home a few days a week. It will save them money too.

I am not in London! And I do need to go to work.

So I'm out of this new work from home revolution, but it is a game changer.

I don't see why companies won't allow most of their employees to continue to work from home a few days a week. It will save them money too.

I honestly don't know why most didn't in the first place! Sadly, there are already people wanting to come back to the office because they miss the "social aspect"

wfh more is a game changer for us, and many of our friends (law, finance, tech sectors). Amongst us we already have the flexibility of 1-2 days a week at home but DHs law firm are saying it will be more like 1 day a wk in the office!

The idea of a long commute has always put us off so we've prioritised been on a tube line & close to the tube. We have a healthy budget 1.1-1.2m so prices dropping would help us buy bigger but realistically anything in that bracket is still relatively small with not much outdoor space. We just want more for our money.

DuchessOfSofa

Being commutable is only a temporary thing.
I don’t want to leave London even though technically I could live anywhere and have lived in multiple towns and cities across the country in the past.
I am already getting panic attacks about living outside the M25 even for 6 months

Dd, Ds and Dp though have to be commutable to London for work

For dc the things they do are London based. They get lots and lots of jobs. They could go to a few other towns but the choice of jobs would be too restrictive

Dp again needs to be in London because of what he does

@Oliversmumsarmy do you actually live in London? I remember you from other threads saying you were quite far out & didn't particularly like your home. Think I asked you a few questions before, did you used to develop houses?

Perhaps people like "us" leaving London will help ftbs (who do struggle to get on the ladder during drops) in lesser paid industries that can't remote work such as hospitality help them on the ladder.

I think it’s impossible to say what will happen. I suspect if there is big economic contraction, then house prices will probably stagnate (possible London and SE England May escape this, or anywhere where supply outstrips demand), and may possibly drop. I doubt a 30% drop, but who knows? If we do have a depression greater than that of the 1920’s- as is commonly predicted- then I think all bets are off.

What seems likely is that there are going to be job losses and quite possibly tax increases which are both going to limit spending power. I imagine public sector pay will be frozen (or increases below rise in living costs/inflation)- which is going to be a kick in the teeth to the many people who have kept this country going during this crisis- but the money will have to be recouped somehow.

If people lose their jobs they may not have a choice as to whether they sell- it may be that or repossession, if they can’t afford the mortgage payments.

It also depends on what the economy does and how banks respond to that in terms of lending- it is certainly possible there will be a period of retrenchment if the economy tanks and there are lots of defaults/repossessions etc.

@Oliversmumsarmy I hear you, there are reasons to live in London that don't include being near to your job, of course.

What I'm trying to explain though is that there will be a TREND towards working fewer days in the office. Which will mean that there is a trend towards tolerating a longer commute.

''I am already getting panic attacks about living outside the M25 even for 6 months''

That passes. I feel like an idiot that I used to buy in to that now.

I don't see why companies won't allow most of their employees to continue to work from home a few days a week. It will save them money too.

Again, only if you hotdesk (you don't save money by having empty desks three days out of five) and I'm not sure whether hotdesking will look like a good idea for quite some time.

I think and hope there will be more flexibility for many people after this, but I don't think it'll be the revolution people are hoping for - I think most companies will slowly drift back to old ways of working, whatever they currently think - and I certainly wouldn't buy a house on the assumption of an imagined future where every company lets you work from home as you like.

''I am already getting panic attacks about living outside the M25 even for 6 months''

What does this even mean?

Caterham, Banstead, chessington, Debden, Feltham, Upminster are all in the M25 aren't they?

There not the places you think of when talking about living in London imo.
Absolutely nothing wrong with those places but they are not anything like Battersea, Brixton, Camden, Dalston, Kilburn etc.