Housing price crash

[Eucalyptusbee]

It's happening!

AIBU to be excited

I thought that 😬

As a long term renter. I wish that was the case.
but I’m also old enough to know how this will go,
lenders stop lending

renters won’t stand a chance against all the cash landlords who will snap up multiple houses to rent out, due to the high rentals at the moment.

the landlords and those renters able to buy will bolster the market back up and the crash will end.

or the government will bail it out (again) creating more unobtainable market.

the crash needed to happen fully in 2008. It’s too far now and things have moved on.

i also remember the 80’s crash and the 90’s crash. I remember people losing their homes, negative equity and all that heart ache.

there’s nothing good about this housing market “game”

No, it's not happening. And it's not going to happen until the basic maths of limited supply vs huge demand changes. And that's not happening any time soon.

They have slowed a little round here (Midlands)
I can't see an actual crash happening any time soon though, maybe a very slight drop

I do really sympathise for first time buyers though it's cruel and unfair how expensive houses are compared to the average salary and something needs to be done.

Haha exactly what I thought. And one that’s been out of uni for 10 years! I’m baffled he studied economics but hasn’t pointed out how bad a crash would be.

They've been saying this for the last 20 years.

Prices continue to rise

Yes, even if prices are lower, mortgages won't necessarily be more affordable because of higher interest rates and deposits, even more so if they reduce the valuation and you have to make up the difference or not proceed, tighter lending criteria and insecure incomes.

Buying in a recession isn't a walk in the park. When we bought in the mid 90s, DP got made redundant within about a fortnight, and all that expensive income protection insurance we'd bought wasn't worth the paper it was written on.

A colleague lost 3 purchases due to various difficulties with sellers pulling out because they couldn't afford to move or the valuation was reduced and their deposit wouldn't cover the purchase price. They spent thousands on not buying a house and each time it fell through, it put them back because they had to keep saving to replace fees that they'd lost. Exciting times indeed.

Perhaps if your DH thinks he's so knowledgeable, he should talk to some older relatives who were adults in previous recessions.

And yet other people with knowledge say that it's highly unlikely prices will crash spectacularly. Consensus I've seen around and about is that they may slow, they fall a little in some areas, and we can expect some disruption in the market as interest rates creep up.

We have a house but my siblings don't

Exactly. Happened last time, lending criteria was tightened and only landlords with cash benefited.
Be careful what you wish for....

If there is a crash, aside from the reasons given by other posters above, it is likely to be horrible, since it will be unequally distributed. Rich areas will continue to see high demand which will keep prices up (in my city, mid-range priced houses, which admittedly are already ludicrously priced, get 30+ offers and go within a couple of days on the market), while the crash, if it happens, will destroy economies in poorer areas.

Yeah I wouldn't get your hopes up , might be a blip but unlikely to be a crash. House building is fairly low and demand is high . Don't need a degree to work out the rest.

YABU

1. because it’s pretty distasteful to be so gleeful about the possible misfortune of others

2. because a crash (or even a dip) in the housing market won’t magically enable people to get on the property ladder. Firstly, if house prices are dropping then lenders will almost immediately tighten lending criteria - that 10% deposit you used to need will now be more like 25% or possibly even more, so if deposit is your problem, you’d actually be in a worse position. Secondly, people won’t be moving house due to not wanting/being able to afford to lose money, this will restrict the supply of housing and start to push prices back up if demand outstrips supply.

Yes OP that would be marvellous news for FTB. They'll struggle to actually get a mortgage, there will be little coming on the market because everybody will be staying put, and every house they do offer on they will go to a cash buying landlord. Put the champagne on ice!

People who were hurt by negative equity in 90s will be less excited by this. Also, prices aren’t coming down round here yet (Kent).

OP "Husband (lawyer but studied economics and works closely in markets / property) said things looking very bleak, in 6m time we will long for today's prices / interest rates"

long for today's high prices?

The prices here are going up vertically with at least 6-10 cash buyers fighting over each one. A housing crash is NOT coming, I am sorry to ruin your day.

Demand is way outstripping supply, and that doesn't look likely to change for a very very long time. London is certainly being flooded with families from HK and China at the moment, and so many still looking to relocate to the country.

Nope, you are in for a long wait op

Why would you be excited then if you have a house @Eucalyptusbee ? Are you excited for your mortgage payments to spiral beyond what you can afford? Are you looking forward the value of your biggest asset dropping considerably? As a homeowner there is literally nothing 'exciting' about a recession and market crash.

Hopefully people will see beyond your frankly ridiculous title and read the thread to realise you don't have a clue. Nor does your husband. One has to hope you've misunderstood his comment, or it's a real worry that he thinks that.

As in things will cost even more in 6m / interest rates will be even higher.

Today's prices for goods / gas etc will seem cheap

No mortgage and not planning on moving .

Hi OP,

Sorry to burst your bubble but demand for housing is still very high in a lot of areas. The more demand = the higher prices will climb.

The market is definitely starting to slow in some areas (my area, actually!) but there is unlikely to be a crash unless there is suddenly too much housing and not enough buyers.

But you are right, it is slowing!

So things in shops will cost more and houses will cost less? Does that sound very likely?

There isn't magically more houses. There's still the same number, and the same number of people can buy one...

I think you might need an economics lesson OP.

If house prices crash, that doesn't suddenly make them affordable to people who don't own a home. If there is a big crash, the banks will simply tighten up their lending criteria, meaning you will need say a 25%+ deposit and years and years of solid employment on very high salaries.

If the market crashed by 50% (massively unlikely imho) then a £700k house now costs £350k, but you need a deposit of nearly £90k and salaries of £50k plus. Saving for that kind of deposit, whilst rents go up massively as landlords mortgage rates go up, will be basically impossible for those not already on the ladder.

Don't get me wrong, i am a house owner and hope prices do correct, but don't believe for one minute this will help anyone except the wealthiest who can scoop up an additional property or two.