Housing price crash

[Eucalyptusbee]

It's happening!

AIBU to be excited

Ha! I live in a relatively cheap area that has rocketed in price due to regeneration and it always had good London connections. A price drop here would just mean that more investors would swoop in, houses on the market don't last long. People genuinely trying to buy their first home will just face more competition if there was a crash.

And there are really unscrupulous buyers out there. My family recently sold a London based family home, and wanted it to go to a family because of the location and potential. Well, that family we thought we sold to is actually a business who have a track record of HMOs and rentals. Those types of buyers are waiting for a crash.

Ouch! Busted, OP 😂

Anyone renting have been losing their homes for years due to housing associations and councils selling because of crazy house prices.
No one has a right to make money of a home.

Ah that’s ok then, absolutely fine for homeowners to lose theirs too.

Attacking the OP?
Its because people subconciously feel guilt about benifiting from something everyone knows deep down is imorale.

Strange thread.

@ReadyToMoveIt Why will people lose their homes if house prices crash?
They are paying a mortage right? that wont change if prices change?

It will mean they wont be rich from their house but should not mean they will 'lose their house'?

I think it is inevitable. Much as I dont want a crash as I saw first hand the suffering in the 1990s the market is unsustainable. All I want is for reasonable prices to return, even pre covid prices, so that young people have a chance of getting their first home.

There are lots of reductions but that is because the prices were too high to start with. Also banks are starting to value houses lower than the offers.

As many, many people have explained above, proper house prices crashes don’t happen in a vacuum. They happen in an environment of recession/high unemployment/economic hardship. If people are in negative equity in that environment, many people will lose their homes. I presume you were an adult in 2008 when exactly that happened?
It also doesn’t lead to an environment in which FTB’s are suddenly able to get on to the housing ladder. Lenders tighten their criteria and require far higher deposits, high interest rates mean mortgages cost more…
in general, a house price crash isn’t good news for anyone.
Stagnation of the market, allowing wages to catch up with house prices, can be a positive, however.

And the only people who get ‘rich from their house’ in an increasing market are those in a position to sell and downsize.

Ynbu. People who are claiming you are awful to want over and artificially inflated prices to drop really mean they are alright so pull the ladder up.

House prices dropping is a win win for everybody but those with multiple properties. If you have a house you paid £500k for and it drops to £250k you will find you can sell it and now buy a bigger house for £300k instead of the 800k you would have had to paid before the crash. If house prices crash and you have children or grandchildren you can now have hope that they will actually be able to buy or afford rent. Your house being worth significantly more than it should be worth does not benefit.
Houses are too expensive. It is wrong. It is crushing this generation of young people and future generations. Only those who have rich families will be able to comfortably afford to live. That's a disgrace.

It is also good for people wanting to move up. If their house drops from £300k to £200k and the house they want drops from £500k to £350k they've lost £100k but saved £150k so they have definitely won. Obviously those figures are just an example it would work lower down and further up the market.

I just know as it happened to me in the 70s.

A flat in the next block down from me (same floor, and same floor plan) as nice decorative order as mine went on the market 2 weeks ago and sold after 2 days for £295k.....DH and I purchased in December for £220k. Certainly not even slowing down here, let alone crashing.

I have a bridge for sale in London he may be interested in, also some funds I can't access in Nigeria.

Exactly! No one’s partying on the street because their utilities are going up or because food is going up but house prices going up yeah let’s celebrate that grrrr.

Wow opened a can of worms here!! I suspect those going out their way to derail the thread and attack me could be the over leveraged and/ or I'm alright Jack camp

Houses are ridiculous. I just want siblings and children to actually have a chance to own one one day

@Jonny234 I. Yes 1% represents a bigger value for most mortgages now than it did in 2000 because mortgages are bigger. But it’s the bank factor that in when they make their lending decisions! In theory they only lend if there’s slack in your budget for a 1-3% increase (is my understanding). Sometimes life gets in the way which means that affordability calculator doesn’t pan out but an increase of 1% in isolation shouldn’t cause nationwide disaster

I thought the same when I saw the price of a recent mega house up for sale and then realised it was for land and an unfinished shell!!
Most we can expect is a price correction.

I think it's more likely that people think this is a nasty thread and that basing opinions on your DH's economics degree is a little painful.

So you’re not currently looking to buy a house, as per your previous threads?

There's certainly a rebound effect at play with the economy being placed into an artificial hold for nearly 2 yrs. The rebound effect is being played out across the broad economy, but it's like a coiled spring, boing, boing, boing.
Housing was hot, now it's travel, construction is hot atm an Indian summer.
I think energy companies are shoring themselves by asking for excessive increases against future wholesale markets.

We're not seeing layoffs along with the inflation, so it's not a normal economic cycle.. Price gouging is commonplace.

Personally, we're on a 5 yr fixed rate, with a high deposit, and we planned when we bought this home for the household budgets to be manageable on 1 salary. I wouldn't want to be stretched.

I'm saying 10% correction. It's just happened in NZ. They raised interest rates faster than us.

In addition to what I've already said as have other posters - a mortgage rate isn't fixed forever. It is usually fixed for 2 or 3 years, occasionally longer. Once that fixed period goes you need to find a new deal or pay the increased interest rates. If someone ends up in negative equity they stand absolutely no chance of getting a new deal as banks won't lend more than the value of the house (and in a crash the Loan to value ratio tends to go down, so will only lend 80% of the total value). Unless someone has oodles of cash in the bank to pay back the difference, they'll be stuck on the higher interest rate long term. That could mean them paying double their current mortgage charge. This may be sustainable for some, but certainly not many.

@gothereagain

So they go for interest only or extend the term.

I’m the SE and estate agent this week told us prices have risen 10% since the start of the year locally… can’t see a major crash happening. It might slow in some areas.