Housing price crash

[Eucalyptusbee]

It's happening!

AIBU to be excited

People aren’t ‘celebrating’ a rise in prices, just pointing out that a crash doesn’t lead to the utopia for FTB’s that people seem to think it does.
Personally I would benefit from a crash on paper… we are looking to upsize but the huge increase in prices means we’ve basically been priced out. I don’t want the economic disaster that usually comes with a crash, though. Far better a period of stagnation while wages catch up.

Imagine there were posters who had read the whole thread, and realised that the OP was not truthful and gave different stories on different posts.

Imagine if someone said they were happy about something which, historically, only happens during a recession and/or a period of cripplingly high interest rates, and had previously gone hand in hand with much higher rates of poverty, unemployment and homelessness...

I'm on another thread in legal and someone's pointed out that as house prices rise but threshold of inhertiance tax stays the same - more and more people are going to find their house may incur inheriance tax.

Even when you have mangaged to buy rising prices aren't always a good thing.

I don't know that we will see a crash in prices.

The last recession in 2008, saw many areas losing value and people went into negative equity, but 'crash' might be pushing it as a term.

There was a sharp dip in prices, but it wasn't huge, and prices then stagnated in many areas.

The problem is the lack of supply of houses, which will keep prices relatively high. I have noticed a marked reduction of housing coming on to the market in my area this year, which is why I am fairly sure we will see a shock to the market of some description. Normally its peak season here. There are 75 to 80 houses unsold to pick from. This year its under 30 at the moment. Thats the lowest its been in about 5 years regardless of the time of year. This is keeping prices higher than they should be.

However since rents are extremely high and it doesn't serve the banks to let people default, what I think will happen is that if people get into financial difficulties there will be much more remortagaging going on.

It also isn't going to help many ftb, if the interest rates go up significantly. It means that when they do an affordibility check they aren't necessarily going to get lent as much. So in relative terms they still will have a similar problem.

I think where it will hit the market hardest is for renters. BTL landlords are most likely to struggle if they have over borrowed. They will merely try and pass that cost on. Except renters won't be able to afford.

We are therefore most likely to see renters becoming homeless, and a consolidating in the BTL market, with the big cash rich landlords buying out individuals who have invested 'for their retirement' fund. It means there will be less competition in the market so rents can be maintained high, with the taxpayer and government being expected to sort out the mess with emergency accomodation (which the surviving landlords who will do very nicely out of). We are likely to see things like old shopping centres owned by councils, repurposed on the cheap and quick, with dubious suitability to cope with the problem.

No one wins in this, except the richest landlords and banks.

Demand will keep prices from crashing. A dip and stagnation yes. Better affordability no. There is this paradox of worsing, more unstable financial climates meaning that affordability doesn't improve because banks are less willing to lend / interest rates mean you have to repay more to the bank over the duration of your mortgage.

The market is completely unbalanced and stuffed. We need a reckoning with the NIMBYs and planning criteria needs an overhaul. Which people have been saying for the last 20 years. FWIW this doesn't mean losing more land as such. We need to use the urban land we've got better and we need to rethink the very british adversion to flats which doesn't exist in other parts of Europe to the same extent. (Making them bigger and with outside space / shared facilities inside would be a smart idea)

In fact I don't know anyone who think the current level of house prices is a good thing long term - even few who may benefit with upsizing often have younger relatives that they can see being harmed.

Yes it’s vile to be excited. We’ve just bought after years of savings and sacrifices - the idea we might be stuck in this house for years to avoid debt is deeply upsetting. We could only afford a new build and won’t be able to add much value. It’s big enough for two, not for a family and we’d planned on selling next year to try for a baby. Glad you’re happy though…!

We need to use the urban land we've got better and we need to rethink the very british adversion to flats which doesn't exist in other parts of Europe to the same extent. (Making them bigger and with outside space / shared facilities inside would be a smart idea)

The British aversion to flats is due to the feudal leasehold system.

The cladding crisis with flats - people facing huge bills or can't sell on - hasn't helped make flats look more attractive.

And it was tried in the 60s and 70s. The flats were a dismal failure, for all sorts of reasons, starting iwth decimation of communities, concrete fatigue and the way councils used the housing to place all of their bad pennies... we just don't have the history of such living.

It could be done, would be a great use of town and city centres - push the supermarkets and big business out to ring roads, have quiet city centre cafe life in the middle. But we do it the other way round still. Though it is changing...

And studied economics 🫣

And as the poster hinted - the fact that they tend to be tiny and noisy due to our crap building regs and zero enforcement.

I really wish that 100% mortgages could be given if renters could prove they'd paid their rent (which was higher than the mortgage repayment) for a set period of time.

LeftFootForward
On a personal level I would be happy with a crash as we have no mortgage and are looking to buy a second home, mainly with cash. However, on a countrywide level and considering others I would be happy with a cessation of the rising prices we currently have.

How incredibly selfish. Do you vote Tory, per chance?

Where did he study economics? The back of a fag packet?

A housing crash is good for NOBODY

I personally can't see a price crash happening any time soon, certainly not in rural Scotland. Prices are higher than ever and demand outstripping supply due to more and more people wanting to move here, work from home making that possible for more than ever before.

The ones that will be affected shortly will be the buy to let independent landlords. Come this Winter with energy prices being so high, if you have the choice of heat the house, feed yourself or pay the rent, we all know which one will be missed. Housing association have the resources to weather and deal with non paying renters.

From a personal viewpoint, a massive increase in house building is required & property prices do need to drop massively. Today's youngster's really do have little chance of getting on the property ladder when comparing price to wages.

I also question if having low interest rates for as long as we have, has helped or hindered our economy as a whole. I suspect we now have far more people living on credit than ever before, not through need to survive but through paying up the latest consumer gadget, tv etc.

The ones that will be affected shortly will be the buy to let independent landlords. Come this Winter with energy prices being so high, if you have the choice of heat the house, feed yourself or pay the rent, we all know which one will be missed. Housing association have the resources to weather and deal with non paying renters.

It takes ages to evict, even in private. Especially if the courts suddenly have an influx of cases.

If house price crash then rental will go up. When house price crash other things tend to be going on and repossessions go up

People will have to live somewhere.

What about the glee some people express when prices go up? I'd say that was much more unseemly. For people who just have the house they live in, or are struggling to buy one of their own, house prices going up is neutral for the first group, and at worst a disaster for the second.
We own ours, but I'd rather prices went down than up because as it is the current situation in the UK of wildly overpriced housing is horrible for people who haven't already got their own place- and for long-term renters too.

fairgame84
*I hope rental prices crash.

It used to be around £600pcm for a 3 bed on my street 2 years ago, now it's £850pcm. We need to move but are complete priced out and we don't have a deposit to buy. We both work full time, it's ridiculous.*

Where do you live? In my neck of the woods, a half decent 3 bedroom house is £1800 pcm. I wish to rent a 2 bed flat- oh no, that’s £1200 pcm for a bog standard one, today I viewed a one bedroom flat for £975 pcm and as I wish to change my job had an interview for a min wage receptionist role. So that would be a job for £9.50 per hour to rent a flat that’s £975 pcm. Madness. The whole thing.

What's your logic in saying that house prices crash rentals become more expensive? If prices go down, tenants become able to buy, demand for rented properties falls, and supply and demand suggests rents should fall. If interest rates and unemployment go up as well as prices falling, that can fuel repossessions, but that still won't drive up rents. What am I missing here that you think will happen if house prices fall?

I don't think you can say people are trying to derail what was a ill-judged bit of a flyaway opening post.
Economic instability is rarely good, and those of us that already have property are less likely to be happy to 'pull the ladder up' and more likely to be old enough to remember the incredible volatility in the 80's and 90's, 110% mortgages and 17% interest rates with real concern for those trying to get on that ladder.
At one point my previously sensibly affordable mortgage became more than my monthly salary and I couldn't sell as the house crash meant £25k of negative equity. We spent our late 30's pretty much on our knees with no disposable income, just avoiding repossession. Then came the boom which increased our wages, assets, credit ratings and ability to upsize. It is all cyclical.
Those of us who remember that time won't be excited at all about the current inflationary trends whatever pundits say about current house market adjustments. But it might explain why some sellers are happier to sell at lower prices right now to get out the market, whilst there are also pockets of high demand with 'now or never' movers.
Real progress in the volume of affordable housing investment and downward pressure on the private rental sector would both have much more positive impact for first time buyers, and could more reasonably be interpreted as a positive sign for the next generation. So, YABU.

It won't matter how long it takes to evict. If the landlord receives no rent and cannot meet his mortgage repayments he will be left with few options other than to sell or remortgage.

No mention of siblings in those threads eh?.....what a load of bollocks this thread is

It won't get any easier to buy a house until there are MORE houses built as at the moment there are far fewer houses in existence than there are people who want to buy them.