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.

You could apply that just as appropriately to people who want house prices to remain high to protect their own investment or profit as to those who want them to fall because they desperately want to get on the housing ladder. It is entirely justifiable to prefer events to work out to suit your own personal circumstances. Anyone who denies this is a saint (unlikely!) or a hypocrite.

Yup

I specifically stated you could apply it to anything. It didn’t matter what it was, it was selfish. Actually Cringing for you.

@Bluntness100

As I am for you. Personally, I don't think it is selfish, because I don't think it 'lacks consideration' for others to want a secure home for your family. The fact is that house prices in this country are scandalously high compared to salaries. As a result, many people live in inadequate, crowded accommodation with no hope of better. There's only one direction in which house prices should sensibly be going and it's not up. Is it selfish to want one's family to be decently housed? No, not anymore than it is to refuse to share your home with a homeless family. Do you do that? If not, you're acting for your own benefit in a way which makes someone else's life worse.

Yes, pragmatically, it is unwise to wish for a house price crash because that is likely to be accompanied by an economic downturn and job losses. But I don't think it's selfish. It's not as if you're wishing for anyone to lose their homes or be unable to move (even if these might be the unfortunate consequences of this), all you want is a home of your own.

I speak as a homeowner. But I understand and empathise with the frustrations of those who are not as lucky as me. I don't expect them to prioritise my family ahead of their own in what they wish for. Why should they?

How will wages catch up?
Wages went up about 1% per year in the late 19th century as a result of the industrial revolution. We manufactured products more cheaply than other countries and shipped them around the world. Obviously we lost that advantage once other countries caught up and built their own manufacturing facilities. To replicate that now I suppose we’d need something to sell that we could do better than any other country, so they would import from us. It’s not impossible - for example Japan rebuilt its economy after WW2 by becoming a world leading technology specialist.

@UsernameN0Tavailable
Do you realise how much of a drop 20% is? Round here an average 3 bed is around £350k, so that would be a drop of £70k. There are a lot of people who wouldn't have that amount of equity in their house. But as long as you're alright, that's OK isnt it OP?

And? You chose to buy that house and you chose the mortgage product.

A fall in house prices will help people get on to the ladder, and if current owners lose some equity then big deal they still get to own a house. I am speaking as a home owner by the way.

I moved up the ladder in a "downturn" & I will be ok to lose 30% value if what I'm buying has dropped by the same percentage. Much less stamp duty too.

And as I said, I was a FTB in the last crash. But just because something happened means it is the norm. The circumstances that allowed you and I to succeed - I had a large enough deposit and a highly motivated seller who had no option but to sell; you got one of the boys

But both those conditions are much less likely in a downturn. We know from previous price crashes (and particularly from the Ireland experience) that those who can sit tight, will sit tight until the chronic housing undersupply increases prices again.

I’ve got 60% equity in my current home. It’ll do me fuck all good if hardly anyone is selling at the next rung up.

A house price crash now would not be any more of a permanent correction than the 2008 one was. For that, you need to fix the supply and structural issues.

pragmatically, it is unwise to wish for a house price crash

I respectfully disagree. Also pragmatically, no government is willing to properly address high house prices, and the Bank of England has been the opposite of helpful. Only a crash is likely to fix what’s broken. It would be wise for it to be fixed. It would doubtless be painful for many, but it’s far too easy to ignore the pain already built into the system.

To paraphrase a post I read about sexism, on the feminism chat board, people who don’t see a problem are like fish who have no idea what water is: too many are swimming in debt and now need it to breath. To quote myself from another thread about housing, unless something big happens to shake things up, the future looks to be even more debt servitude, and at best, owning a small slice of a house because we mustn’t ever let them come down in price.

The economy was already fucked well before Covid came along. If it isn’t for you personally (not you, MessAllOver), great; but it is for a lot of people, simply because it isn’t working very well to provide decent options for shelter and stability.

I never tire of linking to this piece, by a homeowner who at least accepts that he's part of the problem. (Paywall, sorry; I can't ready it anymore, either.)

@SchrodingersImmigrant

This is how a decrease impacts, those whom are mortgage holders, with a fall of 20%. Comparing a 100k and 200k house.

100k house.
20% equity.

They are now trapped, as they have no equity and further falls places them into negtive equity, they dont have a deposit for a 200k house.

100k house
50% equity.

Now, they have 30k spare equity.

200k house is now, 160k, so mortgage is now 130k. They have a deposit but there, monthly payments will increase.

5 years later, houses recovered and then gained 50%.

100k house now 150k (70k equity + paydown)
200k house now 300k (170k equity + paydown).

The person who moved up to 200k house now can buy the 150k house outright, plus change.

I think that the fact some people cannot afford to get on the housing ladder will come back to bite us on the arse later down the line. As a society I mean. We have an ever increasing number of people who are forced to rent at a rate that is generally more expensive than a mortgage on the same house. I fear that in 20 or 30 years we are going to have a load of people who have no financial security to fall back on in their retirement. And who will end up paying for it.......

[quote TheGuruishere]@SchrodingersImmigrant

This is how a decrease impacts, those whom are mortgage holders, with a fall of 20%. Comparing a 100k and 200k house.

100k house.
20% equity.

They are now trapped, as they have no equity and further falls places them into negtive equity, they dont have a deposit for a 200k house.

100k house
50% equity.

Now, they have 30k spare equity.

200k house is now, 160k, so mortgage is now 130k. They have a deposit but there, monthly payments will increase.

5 years later, houses recovered and then gained 50%.

100k house now 150k (70k equity + paydown)
200k house now 300k (170k equity + paydown).

The person who moved up to 200k house now can buy the 150k house outright, plus change.[/quote]
I am aware how this works, however, as the point there was that someone said it would help people to get up on the property ladder, logical assumption then was that they wouldn't have the deposit, as they do in your example, otherwise they would buy crash or no crash. Hence why I was working with example of just the exact deposit and drop of 10%, not high equity.

A price reduction eill only affect people who need to sell. If they don't have to sell then there isn't a loss. So they sit tight and wait for prices to recover. People in their forties who want to buy but can't because of insane prices and greedy people.

[quote SkinnyChicky]@UsernameN0Tavailable
Do you realise how much of a drop 20% is? Round here an average 3 bed is around £350k, so that would be a drop of £70k. There are a lot of people who wouldn't have that amount of equity in their house. But as long as you're alright, that's OK isnt it OP?

And? You chose to buy that house and you chose the mortgage product.

A fall in house prices will help people get on to the ladder, and if current owners lose some equity then big deal they still get to own a house. I am speaking as a home owner by the way.[/quote]
@SkinnyChicky your post doesn't make any sense, I never mentioned mortgage products. How do you even know I'm a homeowner? You're just making stuff up to make a point.

But you conveniently chose to ignore the rest of my post saying that if house prices drop then first time buyers wouldnt be able to buy anyway. A 20% drop in house prices would be as a result of a horrific drop in the economy and GDP, and like in 2008 the banks would stop lending and people would lose their jobs.

Yes you are BU given that this would put a lot of people in a lot of trouble with negative equity etc. There is a huge group of people (DH and I included) that would be hugely affected by this, we would lose a significant amount of money.

@Viviennemary
A price reduction eill only affect people who need to sell. If they don't have to sell then there isn't a loss. So they sit tight and wait for prices to recover. People in their forties who want to buy but can't because of insane prices and greedy people.

Strictly speaking this isnt competely accurate. When remortgaging you will get better rates when you have a lower loan to value ratio. Therefore it is better for homeowners to see their house price increase, or at least not fall. Notwithstanding that I still think we need to see houseprices fall.

@UsernameN0Tavailable
Its pretty obvious you are a homeowner by the tone of your post. Dont need to be Mystic Meg to work that out. And you are wrong when you say banks will stop lending. If banks dont lend they dont make any money. Its in their very intest to loan, no pun intended. They will just need to reassess who they loan to and how much. Something that is long overdue whichever way you cut it.

YANBU to want be able to buy a house.

YABU to want a price crash so you can afford it, as that's basically saying you want to profit from others' misery and not address/or understand the underlying reason house prices are high- in some areas. I'm quite sure you'd be happy to profit from a gain in the future but right now sounds a lot like what suits you today is what's right.

Yes you are. Lots of people, including recent first time buyers, will be screwed.

@Viviennemary

A price reduction eill only affect people who need to sell. If they don't have to sell then there isn't a loss. So they sit tight and wait for prices to recover. People in their forties who want to buy but can't because of insane prices and greedy people.

I've just used that handy new feature to read all of your posts on this thread, and not one of them addresses the points that have been made to you repeatedly: namely, that house prices aren't formed in a vacuum, and a significant drop will be accompanied by a recession, restriction of mortgage lending, shortage of available homes as people obviously won't sell unless they have no choice and even banks would rather repossess and sit tight, job losses and all the rest of it. You are a bit nearer the mark in saying there's too much of a gap between prices and salaries, but you don't seem to understand that house prices have a holistic relationship with the economy in general.

Instead you have a bizarre belief that the issue is being caused by ordinary owner occupiers (not even investors) who are "rubbing their hands in glee" and somehow sending prices upwards by the power of their will alone. This is despite posters on here whose houses have crashed telling you their stories of being stuck in completely unsuitable homes.

The situation is just a little bit more complicated than you are determined to think it is, and it's hard to believe an actual homeowner wouldn't realise it.

I note the OP has several times made assertions that the only ones affected are those needing to sell.

A) that might be a lot of people now who've lost their jobs and
B) massively highlights OP assumes prices should and will continue to rise thus profiting herself.

But that's ok as it suits you now and screw the next wave.

@KeepWashingThoseHands

I note the OP has several times made assertions that the only ones affected are those needing to sell.

A) that might be a lot of people now who've lost their jobs and
B) massively highlights OP assumes prices should and will continue to rise thus profiting herself.

But that's ok as it suits you now and screw the next wave.

Yeah. Yay reposessions. That was clear from the begining. I mean, how many times do people have to explain that it would affect more the less well off🤷🏻

I long suspected that OP is not stupid and not understanding this (who wouldn't), but is trying for some bunfight or something because.

I honestly think some people do think that a house crash could happen without the rest of the economy crashing as well or that somehow they would escape any impact and buy a mansion for pennies.

Regardless, what this country needs more than anything is a regulated rental marketing, private and social, where tenants are allowed to have homes for as long as want, not having to move every year or living in fear of notice.
Places where they can put down roots and paint walls and feel secure.
What I hated about renting was not feeling I ever had a home. If I’d found that on the rental market, I don’t think I would have been as pushed to buy.

OP is looking for bunfight. SHOCKING!

Unlike you @SchrodingersImmigrant with unnecessary passive aggressive posts.

Whatever.

OP is looking for bunfight. SHOCKING!

Unlike you @SchrodingersImmigrant with unnecessary passive aggressive posts.

Whatever.

What? @SchrodingersImmigrant is one of the best posters on this thread, if not the best.

It's not even passive aggressive. I believe that op isn't stupid, but keeps repeating things, such as what you pointed out, on purpose to cause a reaction.
There is no way that someone would not understand who would crash affect the most, especially after many here explained it. It is essentially saying "yay reposessions".

@ShebaShimmyShake oh wow. Thank you. Really. I think that was misunderstanding. I do sometimes get syntax mixed up so it can be taken wrongly🙈