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.

Variable rates are a gamble. (Long term fixed is the answer that nobody in this country wants to hear.)

I agree with that. My family was surprised when they found out I can't just fix for 20 years like them.

@SchrodingersImmigrant but that's the point, 400k won't get much in London now & you need to be earning 100k for that. Wages have stagnated, it's a legacy of the 08 recession & will likely be a legacy of Covid.

If you go back on a thread you will see that many of us agreed that price stagnation while wages catch up would be great option as no one gets done that way.

How will wages catch up? what does this look like in real life?

You are not JUST stuck though. You end up stuck and on high interest and fucked
The key point is that it fucks the economy too, because when mortgage payments increase, people spend all their money on their mortgage and have no disposable income left. So the hospitality sector, the leisure sector, etc all go down the toilet.

The key point is that it fucks the economy too, because when mortgage payments increase, people spend all their money on their mortgage and have no disposable income left. So the hospitality sector, the leisure sector, etc all go down the toilet.

This isn't happening already?

Well I don't want them to fall, but agree they aren't in line with average salaries.

We purchased our house as first time buyers about six years ago, we hope to move in a few years BUT we need house prices to keep steady or ideally increase to boost our equity to enable us to move to a bigger house. If prices drop, we will simply stay put until they recover - which I am sure many people would do - so it wouldn't free up houses for first time buyers anyway!

Also, you need to remember if there is a crash, lenders stop lending or increase required deposits / reduce LTV (bit like how the 95% mortgages have all but vanished) so first time buyers still won't be able to buy a house!

I am leaving this now, because it's really just me repeating what was already written on a thread and that's bit of a waste of time tbh.

@RiverFlowers but when you move are you moving to a different area? If your house increases by 20% so will what you are buying.20% of. more expensive house is more than 20% of a cheaper house.

This isn't happening already?
It is, but not because people don’t have money to spend. It’s because businesses have to remain closed due to coronavirus. The unspent money is still in people’s pockets, either in savings or being spent in other sectors. This is why the banks have reduced interest rates, to encourage people to spend their saved money. As soon as the closed businesses reopen, people will resume spending. So it’s a completely different situation.

@SchrodingersImmigrant good debating!

@Raimona where do you live? Plenty of FTBs & renters have been servicing huge chunks of their disposable income on mortgages & rent before Covid.

Ever increasing house prices makes this worse because in the real
world not everyone can aim to be on 100k or more.

It's not as simple as cheaper houses and not that good for first time buyers. Banks are already expecting a minimim deposit of 15% instead of 10% and they will be less willing to lend money at all if the market is uncertain. Current owners may end up in negative equity - unless you're a cash buyer, you probably won't feel any benefit.

"I've nothing against landlords but"
I hate these comments. Landlords provide a home for people who for whatever reason don't want to buy a property or commit to a certain area. In our properties we have had tenants for example who move regularly for work, mature students, recently separated/divorced people waiting for the finances, testing an area for suitability.

Prices aren't going to drop imo.
We need to stop all this whining and indoctrinising youngsters telling them they'll never be able to afford a house and enable/educate them financially instead.
All our dc are homeowners and one has a rental too. That isn't meant to be smug before anyone sends me a medal.
Many who want to buy will do so with the right determination and support.

Gosh, where are you that your property has dropped fifty percent in eight years?

NE Scotland - House prices had peaked and were bound to fall anyway (nit that we knew as niave 21 year old) plus the decline of the oil industry and here we are. To be fair the actual value is more like £65,000 in isolation but add on the fact there market is saturated with one bedroomed flats and that takes it down even more.

If I think about it too much I get really upset!!

Landlords provide a home for people who for whatever reason don't want to buy a property or commit to a certain area.

I've rented & still enjoy the use of a holiday home & air bnb but landlords do it for money, something would take their place if they didn't exist. Plus it's harder to become a landlord & make money from it today.

We need to stop all this whining and indoctrinising youngsters telling them they'll never be able to afford a house and enable/educate them financially instead.

What does this even mean?

There are some good posts here outlining my argument a lot better than I did. The ratio of average earnings to house prices is the concern I have. So I am still convinced house prices are too high in most areas.

@User50000999788887876655

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

This !

price stagnation while wages catch up

I’ve already indicated why I don’t think this is an answer, but in any case, what’s the likelihood? (Rhetorical, I guess, if you’ve left the thread. Which I should probably do, as discussions like these are a black hole for time.)

“Many who want to buy will do so with the right determination and support.”

Chiefly that last one. Relying on the bank of mum & dad, for example, isn’t a good way to run things, as over generations it widens the divide between haves and have-nots. Eventually even the haves won’t find the resulting society all that comfortable to live in.

House prices dropping make it significantly easier for 2nd steppers &/or those with good equity to move up the ladder. Lots of my friends feel stuck because that next step is just too expensive despite having good equity & incomes.

There's some very dodgy economics on here, and a few posts with grandiose perceptions of (unearned) "wealth".

Makes total sense as a result why the Tories were able to get an 80 seat majority last December. [hmm[

even

Relying on the bank of mum & dad, for example, isn’t a good way to run things, as over generations it widens the divide between haves and have-nots.

I have a problem with this because soon it won't be get a good job & you can afford a house. Your income will be irrelevant & whether your parents can help or not will be more important. Although I suppose tax changes may impact that.

@GinDaddyRedux MNs tends to be quite left wing but on landlords & high house prices defo Tory.

I don't get it, I have a house but I'm worried about my dc & their generation.

I recently bought a house, but agree that house prices need to fall.

High house prices are nothing new. At present house prices are approx 8x wages. But back in the 1800s house prices were 13x wages and more than 75% of people rented. Then salaries slowly increased and more houses were built, which resulted in a slow decline of house prices by 0.4% per year. By the end of the 20th century 70% of people owned their homes. It’s unlikely we could repeat that process now because there are so many owner-occupiers who are heavily mortgaged. Our best hope is rising wages and building more houses coupled with house price stagnation.

@Raimona how do you increase wages though?