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.

@SchrodingersImmigrant it's the valuation of the 100k house where the maths went wrong I think. They'd have 18,000 deposit. If the house value drops by 10%. It would be worth 90,000 and 20% equity in it.

[quote Chesneyhawkes1]@SchrodingersImmigrant it's the valuation of the 100k house where the maths went wrong I think. They'd have 18,000 deposit. If the house value drops by 10%. It would be worth 90,000 and 20% equity in it. [/quote]
Thank you, but if you have 100k house with 20% equity, then it goes
House 100k
You 20k
Bank 80k

If it drops 10% it should be
House 90k
You 10k
Bank 80k

Because banks don't just say never mind about it we will share the loss.

I’m totally lost in the math 🤣

If your house is at first worth £100k and your outstanding mortgage is £80k, but you sell for £90k instead, you only get £10k as you still have to pay off the outstanding ding mortgage of £80k.

To want house prices to drop, so that people face financial hardship so that you can bag a "bargain" is just nasty.

To want your wage to increase, so that you can afford the property that you want is a better mindset.

Plenty of ways to make your wage increase - extra hours/second job/working harder or smarter to get a promotion/extra training/change of career or industry/start up on your own/expand own business etc etc. Much better and kinder to focus on that.

@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.

They haven't dropped around here at all and I didn't think they would. Looking online at some that have come on the market, they are going on for more than at the beginning of the year and selling too.

It’ll never happen in a vacuum. 🤷🏻‍♀️

Tbh - house prices are going up. A friend just bought in Surrey - the price went up from last year.

I’m sorry I can’t agree that this would be a good thing. It would be accompanied by tremendous hardship for a lot of hardworking people.

Whilst it might seem good in theory, the idea that houses are more affordable, in reality the people who you think will benefit won’t - it’ll only be people who can buy in cash without a mortgage who will largely benefit.

YABU

obviously

I am a young person, 22, and we own a home as do several of our friends (in Essex). Those young people who say how unfair it is mostly spend a lot of time and money on themselves and then get upset they can't save. When we saved for our deposit we had a boring time, yes. But now having our own room and the money to do what we want has been worth 2 years of boring and our friends all feel the same.

I don't for a minute believe you and your friends haven't had a massive leg-up in order to be homeowners at 22, whether you realise it or not.

It's never a good idea to wish ill on others just so you can better your own
I completely agree with this. I cannot take pleasure in the misfortune of others.

The only way house prices can truly fall is if there are suddenly a lot of people who cannot make payments and are forced sellers. Otherwise people simply dont sell if prices fall,often due to negative equity, and the reduction in sellers vs demand stabilises prices again

@TheHobbitMum. I would welcome a fall in house prices, it's the only way I could afford to buy. It would be shit for the economy and everything that goes with that but for my family it would be a good thing

YANBU or particularly selfish. Arguably, all those people who own who are sitting there saying, "You're so selfish. Why do you want us home owners to suffer?" are themselves selfish because they don't want a market change which, although bad for them financially, might help others get a secure home. The truth is that no one is selfish but we're all self-interested - we want things to work out for our own benefit. And there's nothing wrong with that, it's purely a matter of perspective. If you can't afford a home of your own, naturally you want house prices to fall. Totally reasonable (I say this as a home owner).

Economics prize goes to happinessischocolate for this
The only good way house prices could go down is if there was massive increase in social housing which allowed all the people claiming housing benefit to move out of private rented accommodation, and thereby saving the councils millions of £s

Many landlords would then have to sell up causing a natural correction in the market, but that never going to happen with a Tory government.

Sell up to who though if everyone is in social housing? If people have secure rentals, why would they want to buy and spend money on repairs etc and risk taht they themselves will have to sell up if houses fall🤷🏻

First time buyers didn’t win in the last crash and they’re not likely to win if there’s one now.

If prices are falling/volatile, banks will want to protect themselves and that means larger deposits.

Buy to let landlords are much more likely to be able to raise a larger deposit quickly from equity.

Meanwhile, sellers on tight mortgages themselves will be forced to sit tight due to negative equity. Those further up the chain with more equity are likely to sit tight rather than selling unless they’re absolutely forced to.

I agree with you that house prices got out of control relative to earnings. But a crash won’t help anyone.

Yes a lot of people need a better understanding of who crashes punish - the poorest, mostly. Higher deposits, more job losses amongst the younger and lower paid and those in insecure employment.

How about fighting for solutions where nobody is punished like earnings growth and house building?

I would like house prices to stop going up but a crash is awful for most people. The 80s crash meant my in laws (who divorced around that time) never owned again & left my parents trapped in negative equity in a terrible endowment mortgage with spiralling interest rates.

In a crash, I wouldn't sell my house - I'd rent out rooms to help afford, or rent the whole thing out if I needed to relocate.

Yeah. Stahnation would be fine. I don't see people losing their homes over it. Obviously there would still be profit to be made for those who wish to by refurbishing doer uppers etc.

Op lots of people who can’t afford to buy dream of house prices dropping and them being suddenly able to buy. It just doesn’t work that way as others have tried to explain. But you’re not alone as it’s the only way some folks think they could ever afford to buy, sadly they don’t look at the wider impacts that would cause such a crash and the impact on them.

What they really hope for is a substantial drop, with no interest rate rises, affordable mortgage and no impact on them personally from the associated recession other than they can suddenly buy a house.

I think it is slowly starting here. I started house hunting in October and have noticed in the past week, several houses that were stc shortly after lockdown, are now back on the market and over the past few days, a fair few houses in our town (and there are not a lot of houses in our town on the market) have had price reductions

Lots of people have huge equity in their house and are just plain greedy wanting ever higher prices rubbing their hands in glee without a thought for anybody else trying to buy. If our house dropped 20% we'd still have a lot of equity because we bought years ago when houses were more affordable.

@Viviennemary

Lots of people have huge equity in their house and are just plain greedy wanting ever higher prices rubbing their hands in glee without a thought for anybody else trying to buy. If our house dropped 20% we'd still have a lot of equity because we bought years ago when houses were more affordable.

No, this isn't how it works.