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

madness that investments increase in value?

A basic necessity, by that much, yes, madness. I expect this debate is divided between those of us who see that and those who are just fine with it.

People sold in 2003 to rent. If they had of bought a 100k house then it would now be worth 400k and they'd of paid way less in mortage and be close to paying off the mortgage by now!

Not where I live or in other parts of the country, £100k rise more likely.

So still missed out on £100k value and they had the pleasure of paying off someone else’s mortgage for all those years too

Not where I live or in other parts of the country, £100k rise more likely.

Same here. London =/= everywhere.

So still missed out on £100k value and they had the pleasure of paying off someone else’s mortgage for all those years too

You either pay a landlord, or you pay the bank to rent money (not so much these days of ultra-low interest rates, I know). Plus all the other costs of homeownership which conveniently get overlooked.

“Value”-led thinking is why this country is so fucked, housing-wise: homeowners are forever compelled to ramp up the market.

If you pay the bank you own it at the end though

What a silly notion that renting is the same

I didn’t say it was the same. I said one way or the other, you’re paying to live somewhere, and that cost should also be taken into account. What’s silly is ignoring that cost. Worse, living in fear as so many do that interest rates should rise to something approaching normal – as they must, one day, unless you want the entire financial system subservient to maintaining housing “value”.

So many of you are presuming that interest rates will stay the same. They can only go one way and if inflation goes up, the BOE will put up interest rates.
There will be increased supply from deaths, dept and increased divorce rate. The international sales have planked. The economy will be fucked with massive government dept. The government will not have the capacity to save the housing market as per 2008. So this is going to be like the late 80’s but worse where the south east saw drops of 30% It won’t happen overnight, it will slowly shrivel up.

There will be people with cash hoping for a 30% drop and to them it is good news

@Singlewhiteguineapig

Or going negative like what is being reported

So many of you are presuming that interest rates will stay the same. They can only go one way and if inflation goes up, the BOE will put up interest rates.

What I heard on Today this morning was that interest rates are likely to go down, in some cases becoming negative. The highest priority is to stimulate economic activity to avoid a severe and prolonged recession.

No way will interest rates rise, people have been saying that for years and they remain at near zero. which is good news. They wont rise as they want people to be able to service their debts. The minority are savers and their savings will be eroded away.

Sorry haven't RTFT, but I have been wondering what covid etc will mean for relative property values across different areas.

I think for example that prices in London and some other big cities might not be as different to other areas as they are now. In London for example many people rent or own because they have to work in London but if more of them are working from home at least three days a week they will be happier to live much further out, especially if that gives them more indoor space and a garden. Some retired people I know stay in London to be close to friends, theatre, restaurants etc but if those are less of an option in the medium to long term that is another feature of the city gone that pushes up prices for everyone. Reduction in ease of travel to the UK may affect some foreign buyers, and those buying to let will be affected by decreased demand.

I could be wrong, it depends on how fast city life recovers and how much the working from home trend stays around. I just think people are not going to pay inflated prices for smaller accomodation if they don't benefit from being closer to work or to the social and cultural life of the city.

Clearly everyone on here saying interest rates won’t rise don’t remember Black Friday

I mean black Wednesday 😂 auto correct

Here’s an overview of what happened in the run up to Black wednesday- my parents nearly lost their house & many people I know did

I have thought of another incentive to leave London! I think this whole episode has made many people feel less ease with living in London and being far from relatives, especially elderly ones, elsewhere in the UK.

I remember Black Wednesday, but that was over 30 years ago. We didn't have an economy dependent on a heavily indebted service sector, that had been propped up by historically low interest rates for a decade then.

If they raised interest rates by even a tiny amount, it would fuck the economy even more than it currently is right now. The government is massively in debt. The retail and restaurant sectors are massively in debt and currently losing a lot of their income. Many individuals are also in debt with uncertain incomes. They've just dropped the base rate to almost zero and there's talk of reducing further, not raising them.

But if a no deal brexit happens (and it’s looking extremely likely) and the pound collapses, they will need to take drastic action and that could involve raising interest rates

@BarbaraofSeville your post also proves how unlikely a housing bail out is given the general state of the economy after all of this

I'm a mortgage adviser, buyers are making cheeky arse offer and they're being accepted, 10-15% off an already decent asking price. We're in the midlands. There's definitely a fall in the market coming but I think it'll be 10-12%

The government have very few options - printing money is likely to be one of those options - negative interest rates are a terrible idea for a whole host of reasons - paying people to borrow money 🤷🏻‍♀️

Yeah black Wednesday was triggered by major - as Chancellor - entering the ERM at the wrong rate and the wrong time. How that guy ever got to be PM I'll never know.

There were only about a quarter of a million repossessions though which given the historically high rate of home ownership (never been as high before or since) wasn't too bad especially given that a lot of people didn't end up owing anyway - you could get banks to write it off if you had dependents etc, it really wasn't the national catastrophe that people present it as.

No way will interest rates rise, people have been saying that for years and they remain at near zero. which is good news. They wont rise as they want people to be able to service their debts. The minority are savers and their savings will be eroded away.

I hope all the financial wizards who are in the Homeowners Club will be happy to trade your overpriced assets amongst yourselves. Unfortunately, the not-so-fortunate will have to face the horror of dealing with a FTB who has been struggling to save a deposit in an environment where savers are despised. As we're already seeing, banks are withdrawing high LTV mortgages so if you need to sell your property which would normally appeal to a FTB, best of luck.