Housing price crash

[Eucalyptusbee]

It's happening!

AIBU to be excited

*80% LTV whoops

Many people lost their homes in the last house price crash. Personally it woukd be fine fir me.

Basically when it’s boom and bust there are always winners and losers.

Things are definitely sitting on Rightmove for longer around here (rural Gloucestershire), and quite a few in our price bracket have been reduced fairly promptly............. I look every day thanks to our arsehole NDN's.

Yes we'll get more at the moment for selling ours, but then we pay more for what we buy and risk having negative equity. I think people are being a lot more cautious, and am quite glad tbh.

Prices are going up alarmingly in my area of London. I see no signs of a crash.

It would be great if they could just stagnate now and inflation could do the work on improving affordability.

There is a tool on the Nationwide website and you put in your year and quarter of purchase your location and also the price you paid, you can then if you are bored enough track your house value quarter by quarter.

We bought in 2000 for £250,000, one wet cold Sunday afternoon in about 2015 I tracked every single quarter since then. ( DS was monopolising the TV, he was too young for a tv in his room and I was bored)

In short, in the quarter following 2008 the market stagnated for a whole three months, ever since it has increased quarter on quarter, some quarters slower than others but still climbed.

Our house has increased in value by 215% in 22 years so I am unsure of where your DH gets his confidence from.

I would love the market to stagnate, then DS might be able to buy around here, as it is, he lives in a three bedroom detached house bought for £250,000 and now he would love to be able to afford a one bedroom maisonette for the same price.

Your gleefulness is distasteful TBQH

I'm in the process of selling my house right now so I would hope not...

I'm not sure why you think your DH having a degree in economics gives him a greater insight into the property market than any of us.

Anyway, I agree with what PPs have said, a housing crash would have a lot of negative consequences which aren't immediately obvious. Older homeowners will be less likely to downsize because they won't end up with as much cash to fund their life choices so larger family homes will still be in short supply. Older people going into care won't get as much money to self fund and the cost of care will fall back on the local council ( i.e. taxpayers like you and me). Just 2 consequences. Plus if some houseowners lose their homes they'll need rented accommodation and the competition will put rental prices up.

I agree with the pp who said we need wages to catch up with house prices. So I think stagnation is ok but a crash would be a disaster.

If everyone who currently owns gets plunged into negative equity or looses what they have paid in they won’t move will they?

So even less homes for people not on the ladder to buy along with bigger deposits needed to avoid the next round of buyers ending up in the same position and tighter lending…sounds great 🤔

I have scrimped and saved for years to buy. Nice to know people are hoping that people like us will loose it all.

The original post is typical of the ‘I’m OK, sod the rest’ attitude that has become much more prevalent in the last two years. Nothing subsequently posted by OP leads me to think otherwise, or that she has any understanding at all.

Guess what happens to mortgage interest rates when the housing market crashes? A downturn in the general economy normally means less disposable income, fewer jobs, less borrowing which all drive interest rates up.

Let's say prices drop by 40%. You have a deposit saved of £30k and presently the house you are buying is £260k so you need a £230k mortgage. A £230k mortgage over 25 years at 3% is £1,091.

The price drops 40% to £156,000 but demand for the property is now high because people can't afford to move if they are in negative equity and housing stock is low. Interest rates are rising... You get lucky and get the house but still need a mortgage of £126,000. A £126k mortgage over 25 years at 10% is £1,145.

Who wins OP?

P.S no economics or law degree- just Google.

Not happening here. A house 2 doors down has gone on the market for 100k more than what we bought ours for 14 months ago. They are the same layout\spec inside. Ridiculous.

Some of us have sufferd under it before. In the 1980s we locked in one interest rate of 13% for ten years as that cheaper than our mortgage interest rate! Then we sold two buy to let flats in London and ou rhouse for much less than we bought them, about 50% less for the flats, to buy our house in 1997. I haev neve rmade capital gains I could use to set the losses on the flats against never mind the then called "DVI" losses on the rentals either. So for some of us housing has not been a one way street. I intend to die in my current house so if prices fall that is no issue for me and if they rise no benefit.

However if prices fall it will make it easier for my 5 children to move up to a bigger place more easily - all 5 own a place as I don't really mind if prices fall.

There are still some 95% mortgage out thre by the way so for a couple both working full time buying before they have babies (what we, my children and my parents all had to do - my parents put babies off for nearly 10 year in order to buy in Newcastle) for £350k your 5% deposit is £8750 for each person - 2.5% each - in the couple - which is not an impossible sum to save with 2 full time professional salaries.

YANBU. I’m so sick of headlines that treat house price rises as a thing to celebrate. They’re only good if you’re downsizing and paid your mortgage years before. I remember when houses were homes not short term profit makers. I’m not sure if it will actually happen though.

thinking exactly the same!

@Bluevelvetsofa

Yep, my dh and I scrimped and saved for our house over many years, a housing market crash right now wouldn't benefit us.
We have a 2 year old ds and are hoping to move into a more suitable family home.
Nice to know there are people who would be cheering if we lost all our money/equity just because we own a home, although I can't see any evidence of this "crash".

They didn't last time.

Last crash mortgage rates went up, meaning people could borrow less and monthly repayments were higher. Fewer houses came on the market and sellers were less willing to take reductions due to risk of negative equity.

I bought in the last crash, but I was no better off than had I bought before the last crash as the mortgage repayment was higher (7.5% interest rate) and worries that they would crash further.

Rental prices won't come down either - higher demand for rental properties as homes get repossessed coupled with higher mortgage rates for landlords = higher rents.

Crashes are bad all round. They usually mean a bad economy with lots of people losing jobs. Higher cost of living means less affordability for mortgage calculations as well.

Sigh. If you had any understanding economics you would know that a housing crash doesn't benefit first time buyers (unless they have an extremely large deposit. It benefits cash buyers (i.e. the rich)

Same in my area (Midlands)

@SamphirethePogoingStickerist excellent post but I fear wasted on our lovely OP

express

Sorry if this has been posted before, haven’t got time to read whole thread. However, this article suggests a fall but not a crash. Also, it will be harder for some people to get mortgages, as the criteria for getting them will be tightened.

Wishful thinking doesn't make it true. The cost of construction is rising massively, bricks rose 25% between Christmas and March due to CO2 shortages which has not been resolved. Just think about that and what developers might now be doing?

I can tell you what our clients are doing which is putting their sites not already started on hold. The knock on of that is supply will increase at a very slow rate until predictability returns or costs drop.

Without new builds, demand continues to outstrip supply, so unlikely prices will drop. We have just accepted an offer on our house and I would have loved the market to have dropped to reduce the gap to our next house but nope no drop in price here.

If you buy a property surely you are acknowledging/accepting that its value can go down as well as up? People who wail about negative equity and treat it as some apocalyptic scenario seem not to have considered that with any asset driven by market forces, it's always a possibility. I say this as a homeowner. I didn't buy with any expectation that I'd accrue value in it, make a profit, or be able to 'move up the ladder', because thanks to bad housing policy over the last few decades the ladder no longer exists. If it never crossed your mind that you could end up in negative equity, you're naive imo. You're still more secure than non-homeowners – just stay put.

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

And you're excited for this? And for your house price to fall? Bizarre.

Housing price crash??
For the sakes of young people, I hope so.
but in our area , they are rising still with sealed bids for even ordinary Victorian terraces.

Stagnation is the better option. House prices rising and rising whilst wages never catch up is soul destroying. It won’t be long before a bog standard two up two down will cost a million pounds - I bought one a few years back (since sold) for £124k it’s now going for £400k which is absolutely nuts, it’s literally a two up two down. When you can’t afford to re-buy your own home as little as a year or two after buying it then something is very wrong.