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

Every time we hit recession or there’s some kind of political crisis people start predicting a property crash. But we’ve just sold a property in SE without any discount and had plenty of (virtual) viewings. 30% down?! Lol.

@ayvian
But OP the market has already changed.
People have already said they have had reduced valuations compared to pre Covid.Yes 30 percent immediately it is not,but certainly already down.It is very early days,the full financial costs to the country have not been totted up.Even if people hold onto their jobs there will not be the appetite for the government to prop up artificially the housing market like in the past,there will be many other calls on government money.

I do get it, @ChrissieKeller61: yours is the line that's always trotted out whenever the spectre of a crash comes up. Do you get that prices permanently stuck in the stratosphere are equally bad if not worse? How do you suggest we fix this problem, other than honest values (no props/emergency interest rates which go on forever) and true price discovery?

But what I do think is even if the prices drop a lot of people still wont afford to buy their first home because at the moment banks are not willing to lend as easily. (That’s @Solina)

I’m not suggesting it would suddenly be a golden age, but it would be a good start – especially the not lending so easily. Cheap & easy money is what got us here in the first place, but even with all the taps turned on, eventually people still don't have enough. As it is, FTBs need all kinds of government intervention or the bank of mum and dad. That isn’t healthy or sustainable at all.

@somenerve I don't see stratospheric prices, I'm sorry I just don't everywhere i've considered buying from Edinburgh to Brighton I could buy a house with 10% deposit, on £27,000 a year, earning less than that you probably aren't ready.

I do think wages are a disaster, that does need rectifying. I was earning £30,000 in 2000 and now the same job pays £25,000

Live in the SE and the value of my home has gone down by 5% since February! And I live in a well sought after location... It is not the time to sell (unless you have to)

@letmethinkablutitfornow unless you sell at asking price...

If prices drop 30% that makes purchasing far more doable to first time buyers still in work.

It also means that anyone wanting a more expensive house also wins because the 30% theirs drops is less than they will save on the 30% lower price on their next house. And so on.

I appreciate that it is unlikely to be 30% across the board but the ones that are really going to be hit are those having to downsize.

Those that want to downsize can probably hang for a year or two or may have to accept that the lump sum they end up with is lower but those that have to will probably have problems.

The people that 'downsized' into the one I sold ended up with £180k in their pocket - a 30% reduction in that may have been a bitter pill but on better than average pensions even £120k in your pocket isn't to be sneezed at.

We now have two flats we have acquired in two deprived towns in Cornwall, it doesn't look like too much is for sale at the moment as imagine a lot of people can't afford the drop in equity.

@chrissiekeller61

However it's not about the house prices for me, I'm in a strange situation where I can't lose. Why are you stuck on an interest only mortgage then?

@GoatyGoatyMingeMinge not everyone is fully housed

The more divorces happen the more houses are needed, this has a big pressure on the housing market especially at the mid sized house sector

Maybe it’s just my area but houses are snapped up if they are a 2-4 bed and things are selling again now.

@eggypants ... it's not my mortgage :-) I'm paying it for as long as it suits me. The day it doesn't i'll stop.

If you say so

I'm keeping an eye on the market. Quite a number of properties have come on in SW London since Wednesday where I'm looking and the prices aren't any lower. There have been some reductions on homes that have sat on the market a while, but that's because they were a bit overpriced to begin with.

30% drops around here would mean a drop from average house price of £375 to £260.

Maybe 30% drops will
Be seen again in the north where houses are cheap already and therefore drops are far smaller

Rightmove released their figures today to say no noticeable drop show yet

@eggpants - I do say so, if your so inclined to read my life story, a little more searching would bring up the whole story for you to read in-depth.

Ok Pinocchio!

@eggypants - er right ok love

People need to be realistic - there isn’t going to be significant movement anywhere commutable to Edinburgh, Glasgow, Aberdeen, London, Birmingham, or Manchester

I don't see stratospheric prices

We could quibble about “stratospheric”, but I’ll stand by it. Perhaps we’re living on different planes of existence. I see a market moribund well before Covid, crying out for prop after prop, suggesting prices are generally far too high. I see the age of FTBs rising (which usually means their needs in a house are greater than younger FTBs - yet they're still derided if they dare to want more than a tiny rabbit hutch). Lately I see renewed bleating by the middlemen who stand to make the most from high prices that stamp duty should be abolished, as if that’s what’s been holding everything up. I see increasing anger from the priced out, and no moral justification for maintaining the status quo.

@chrissiekeller61 you should name change more

@eggypants I don't know what your problem is but i've never named changed. I've been quite open about the issues surrounding my house sale etc.

Your trying to sell one house &/or paying off someone else's mortgage so you have a vested interest when accusing others of wetting their pants. Looks like yours are soaked 😜

@eggypants, just because you don't understand something doesn't make me a liar or in desperate need of selling at a high price.

Now i'm off to get very wet knickers in the more pleasurable way i'll leave you to your trolling

I read an interesting article in the Guardian about lots of recent interest from city buyers looking at making the move to other parts of the country.

I think a drop that big will be more determined by the economy in the next 3 years, post furlough etc

House prices are also political. It isn't a free market. I doubt a conservative government would let them drop that low.