AIBU to want house prices to fall

[Viviennemary]

I thought a house price fall was on the cards but it doesn't seem to be happening. It would have been a good chance for first time buyers to buy their first house and get out of rented accommodation. And a chance for people to move to a bigger house for more space.

Yes, yes. Because house prices fall in vacuum. It certainly doesn't go together with job losses and stuff like that...

And how would people move to a bigger house if they lost their equity in the smaller house?

And buy to let landlords definitely wouldn't take advantage to expand their portfolio.

I've nothing against landlords but the profitability of buy to lets have driven house prices up and the tax regulations have been too favourable for landlords keeping buyers locked into high rentals. I think a house price fall of around 15% to 20% should be in general a good thing. Not saying they should slump by half.

I'd wait a while yet
My neighbours have put their house on the market for more than it was on last christmas. Give it 6 months and we will see then

I think the stamp duty cut will keep prices high for now.

Why would it be a good thing? People in negative equity perhaps unable to pay the mortgage. Whilst I think affordability needs to change eg if you can evidence you have paid rent of 1000 for years you should be able to get a mortgage for lower than that. A house price crash isn’t going to help the economy.

House prices never really fall.

A 20% reduction would see a lot of people in negative equity and that stalls the market they can’t afford to sell.

@Viviennemary

I've nothing against landlords but the profitability of buy to lets have driven house prices up and the tax regulations have been too favourable for landlords keeping buyers locked into high rentals. I think a house price fall of around 15% to 20% should be in general a good thing. Not saying they should slump by half.

An increase of 15%-20% would be good for me thanks

I wanted them to fall when I was renting. Now that I own (mortgaged), obviously I don't. Although I wouldn't want to see it go too insane in either direction.

No thanks.

Again. House prices do not fall in vacuum.

Next time anyone wishes for economic crush, especially where houses prices fall as they did in 2008, think about the fact that that crises caused 25% rise in homelessness in the uk and extra 10000 suicides in US and Europe.

Oh and, you know. Banks not lending, so yeah🤷🏻

Schrodingers got it in one, imo. Though extending the current SDLT cut to landlords is utterly bonkers, I'd say, and I'm speaking as a landlord. It's very clearly "keep the market afloat at all costs".

@SchrodingersImmigrant

I guess if houses dropped by 10% the amount you would loose on your smaller house would be less than the amount you would save on the bigger house?!

@SchrodingersImmigrant

And how would people move to a bigger house if they lost their equity in the smaller house?

Schrodinger is correct. It wouldn’t allow people to move to a bigger hose. A house is worth a house. If the next biggest size up has a price drop, so does yours - and broadly the difference in price between them remains the same.

I gather that the variety of mortgage products available post-lockdown is much lower than before and that many of the products that have been pulled are those aimed at getting people on the ladder - e.g. those requiring a lower deposit.

I still think house prices are high compared to earnings. And interest rates might not stay low for ever. They be gone up and up and up and people are priced out of the market.

[quote OverTheRainbow88]@SchrodingersImmigrant

I guess if houses dropped by 10% the amount you would loose on your smaller house would be less than the amount you would save on the bigger house?![/quote]
Well yeah, but.
For most people it's a deposit.
If you have 100k house and you have 20% equity, you have 20k. If it drops 10% you have 10k.
House you want is 190k. So you need 19k deposit. Pre crash? You got it. Post crash? The house drops to 171k. So you need 17k deposit. You don't have it now.

And that doesn't account for banks not lending and allowing only higher deposit mortgages AND if you managed to keep your job through recession.

@Viviennemary

I still think house prices are high compared to earnings. And interest rates might not stay low for ever. They be gone up and up and up and people are priced out of the market.

House prices are high compared to your earnings, not mine. Get a better job?

"Dad is desperate to sell,
But now our homes worth even less
Than a pension from Maxwell,
Our living room's a mess,
Full of magistrates and bailiffs
Trying to repossess..."

When you’re selling will you be praying for a crash? No? So don’t wish that on others.

To be harsh. There will ALWAYS be people priced out. You are very lucky in UK (except right now) to have 5% deposit mortgages...

No, we need to build more and help first time buyers more. Like others have said, house prices would only fall a lot with serious job losses, so a few winners but more losers.

I was thinking of young people not myself. And that house prices in general have risen more than earnings.

You think being negative 15 to 20 percent in a mortgage is a good thing? That will not help.anythimg. People will not be able be sell