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.

@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.

So... Shall it be a selective drop then? You know. Only if your equity is x?

Seriously OP, you are not even having a discussion here like others do. Just leave it...

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

^^ This. Home ownership by foreign investors who don't even live in the UK is also a serious problem imo.

I've obviously touched a nerve. I thought a lot of people on MN are paying high rents and would welcome a drop in prices so they could get on the housing ladder. I'm wrong.

YANBU

You’re a dingbat. You want house prices to fall so you can afford to buy but you’re thinking of yourself in isolation. If there’s a property crash, do you not realise the effect that will have and the awful things that will occur alongside it?!

@Viviennemary

I've obviously touched a nerve. I thought a lot of people on MN are paying high rents and would welcome a drop in prices so they could get on the housing ladder. I'm wrong.

Lots of people understand what comes with that drop🤷🏻

For heaven sake winterwoolies have you not even read this thread. I have got a house.

@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.

You should hope for house prices to stagnate and wages to rise so people can get together a deposit.

A house price crash would lead to mass homelessness, people trapped in abusive situations at the worst and nobody being able to move because they are in negative equity at best.

The people who have lots of equity will often be using it for their care home fees.

If you are happy to lose 20% of your equity then remortgage and give 20% of your equity to someone else to buy a home.

YANBU - house prices need to fall. Not through any crash but through much more supply.

At present only 8% of the UK is built on (the rest is farmed/wild/unusable). We should expand that to 10-12%. Lots more houses with gardens (gardens are more environmentally diverse than fields) and lots of parks.

Prices will fall when NIMBYs realise what an immoral disservice they are doing - and so many more people can have a home. Rented or owned, there needs to be more houses.

You don't understand OP - a crash would affect homeowners and renters. Prices staying the same while wages rise means more people being able to get a deposit together.

@Viviennemary

I've obviously touched a nerve. I thought a lot of people on MN are paying high rents and would welcome a drop in prices so they could get on the housing ladder. I'm wrong.

It's not that you've "touched a nerve", it's that you don't understand how house price falls work, what brings them about and what they cause to happen. You seem to think it's like Tesco doing an offer on the asparagus that doesn't affect anything else at all.

I really do understand the feeling of wanting prices to drop; I've been there. But at the time, I also had a shit job (and was lucky to have it) and there was no attainable mortgage product available nor any houses on the market because, well, that's what a crash means!

I don't know of any b2l LL buying new houses right now. There is the threat of capital gains tax atm and this tax year LL can no longer claim any mortgage interest off as expense against tax, many LL I know are actually trying to sell their b2l homes. LL used to have many perks but now really none so many are selling up their portfolios before Sunak imposes CGT. The result will be less private rental properties in circulation so prices of ones still left will be driven higher.

I thought a lot of people on MN are paying high rents and would welcome a drop in prices so they could get on the housing ladder. I'm wrong

You so are.

But house prices are not unaffordable everywhere in the uk. A house in Darlington is not the same price as zone one. Maybe with remote working more people will be able to buy in less expensive areas.

Have the people from the House Price Crash forum been over to tell us what silly women we all are yet?
They love doing that.

I've obviously touched a nerve. I thought a lot of people on MN are paying high rents and would welcome a drop in prices so they could get on the housing ladder. I'm wrong

Yes because if house prices drop, the interest rates will rise. You pay more back.

You wouldn’t be better off.

@Viviennemary

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

And where exactly do you imagine all these young people/first time buyers are suddenly going to be able to come up with the deposit required to buy all these newly 'cheap' houses?

Particularly as there's talk of the possibility of a really nasty recession on the horizon and possibly as many as 4 million unemployed.

Yeah, clearly they all going be queuing up in droves.

Prices crashing won't help many people. As it lending criteria is pretty tight at the moment and there are few products that allow people to have 10 percent deposit. If the market crashes there will be less supply available (as people who can will stay put) and also higher interest rates. Combine this with stricter lending criteria and it really won't help first time buyers. It's very tough to get on the ladder and I definitely agree that more needs to be done to make housing affordable (for clarity I am a first time buyer this year).

House prices are high compared to your earnings, not mine. Get a better job?
@MoistMolly
House prices are high compared to earnings full stop. House prices in the UK are currently more than 8x average earnings. That's twice the ratio from 1990.

The thing is the inflation has not been equal across the country but a house price slump would impact the areas outside of London and its commuter belt whilst likely hardly impacting London at all, just like after 2008, London recovered and has increased whilst most other places have stagnated and possibly not recovered from the last fall.

@anon444877

I wonder if more commercial property may get redeveloped - of course that means commercial landlords will lose out, but of office space demand does permanently fall that is possible.

That's what I'm hoping. The work from home drive will free up quite a lot of centrally-located commercial property, hopefully much of which can be converted to housing, in the very parts of the country which need it most.

@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.

Or you have people like me and DP who bought a tiny 1 bed flat for £105,000 - which was an average, if not lower than average price at the time. We just about scraped the deposit and other fee's together.

It was only mean to be a 3 or 4 year start flat and yet here we are, 8 years later with £82,000 remaining on the mortgage and a current property value of £54,000.

I honestly think we will be stuck in this flat with no room or space or a garden or spare rooms for children until we die at this rate. Another drop and we would have to pay someone to take it.

My house is a typical first time buyer property. It was our first buy.

We were about to put it on the market just before lockdown as we now have a child and need a bigger family home.
If you get your longed for 15-20% drop in value I will lose enough equity in my home to prevent me from moving, and if this happens to enough people in my position then the properties simply won't come on the market and you'll be no better off than you are now - prices will be lower but those of us who have lost equity just won't sell them!