To think the tories want a housing crash now

[Seagullsbythesea]

All the rhetoric around interest rates has suddenly changed- lots of papers quoting Hunt saying he’ll risk a recession to get inflation under control- lots of papers saying we might see 6 percent by the end of the year.

Seems like they actually WANT a housing crash now- why now?

My friend’s mortgage has just gone up £500 a month.

The Tories do not want a house value crash; mostly because over half of them are landlords and the other half have property investments in their portfolios. It would hit their net worth.

The current interest rate rises are supposed to reduce inflation and the estimates right now is that homeowners with mortgages have lost 20% of their disposable income. Disposable income is money you have left over after paying the mortgage and for essentials like food and utilities.

So, for the vast majority of homeowners with mortgages they are actually better off than they were during Covid furlough when their total income was cut by 20%. And we know for a fact tons of the people lucky enough to be on furlough saved thousands simply by not going to restaurants, not commuting, not spending money.

Sunak is forcing frugality to get inflation down. Very few extra people will lose their home due to having taken on too big a mortgage or due to the usual bad luck of job loss, illness, divorce, death, disability.

Sellers will avoid selling and struggle on so the massive influx of supply wont necessarily happen. If it did oricedvwould fall drastically.

Sone home owners dont gave mortgages or manageable ones too.

What @Dovetail40 said. People who want house prices to crash I presume are aware that it means people sitting in negative equity will just not sell. People will stay in their starter homes for longer and not move up the ladder, meaning still few starter homes will be available. To think a crash will mean suddenly all the houses you can’t afford will stay on the market and become more affordable is a bit pie in the sky.

I live in in Manchester and I don’t know anyone who hasn’t been able to buy here. Yes the prices have gone up but there are still plenty of affordable areas.

This is moronic.

No-one wants a crash or a recession. Whichever party is in government would have to choose between inflation and cooling the economy. They need to cool it down.

Some may choose to stay in the property, but many will short sell as I believe the banks will be pressured to accept short sales similar to how they were pressured to allow mortgage holidays during the pandemic.

@MargaretThursday a crash like that would be awful for anyone who bought in the last 5/10 years. But I guess if you are over 50 it would be fine again for them

But populations aren't rising. Here the birthdate has fallen from 2.4 30 years ago to 1.7.... lots of other countries, Japan, Taiwan, South Korea, all have the same problem.

Yes, indeed.

Don’t be daft- The tories don’t want a house price crash or a recession nor does any other political party. Inflation has to be tackled though which means raising interest rates.

I think some believe this will be a replay of the 80s. Sadly it wont be necessarily.

We have a much bigger population, worldwide.

Demand will excede supply so prices may correct a small amount but not crash to low prices.

Those really strectched may need to sell or rent out whilst they rent in a cheaoer area.

Supply does not magically appear when prices fall.

The population of the uk has risen steadily over the last decades due to immigration.

Am convinced they are trying to push us into recession .The problem has been that with such high employment and a shortage of people ,ordinary workers have been able to negotiate good wage rises as companies try to retain good staff .
They want us back in the position where we are all fearful of redundancy and unemployment ,therefore grateful to have a job at all,meekly accepting that there is no prospect of a pay rise .

There are not enough houses to go around, so no there will not be a crash.

There will be pain and stagnation. But no crash.

I work in local government housing, a housing crash would also affect renters as many landlords have a buy to let mortgage and are seeing huge increases in their mortgage payments. They either pass this onto the tenants making their rent unaffordable, default on payments or sell. All options can lead to tenants at risk of homelessness and truthfully there is not enough social housing to accommodate this as demand already is not sustainable

No crash but prices will drop, they have already haven't they accounting for inflation? Long period of stagnation most likely which long term is a good thing

The majority of Tory supporters all have property and investments in property. They don’t want a crash!

but they’re doing fuck all about it

This is all very familiar to those of us old enough to own a house in 2008. There was lots of talk about this exact thing, lots of panic of people's houses tumbling into worthlessness, and of course the renters eagerly waiting to swoop in a pick up all the bargains of the families left homeless! Unsurprisingly that didn't happen. Sure, there was a drop and some people who had borrowed too much (because of course there was 110% mortgages in those days) were stuck in negative equity on variable rates which wasn't fun for them. But it soon recovered because the housing market is essentially supply and demand. As long as there are people with money needing homes they will be bought and sold.

You’re right but the mentality seems to be that “I” sell my house for a high price and “I” buy at a low price which cannot work. in addition, if borrowing is limited then price inflation will slowly come down as affordability will actually be more affordable.

Birthrate is only one half of the equation. People die later.

The problem has been that with such high employment and a shortage of people ,ordinary workers have been able to negotiate good wage rises as companies try to retain good staff .

The problem is wages have stagnated for years & an ageing population means less workers.

Birthrate is only one half of the equation. People die later.

The UK natural population has started to decline its only immigration that is propping it up. There are more over 65s than under 15s.

This is all very familiar to those of us old enough to own a house in 2008.

So when do you expect them to slash interest rates then?

Yep. They don't want a housing crash now because it's bad for them and their support. That's why they made such a bollocks of the last 13 years throwing everything but the kitchen sink out to keep prices artificially high,

Except for those who are left paying off inflated mortgages.

But for the country as a whole, yeah, you're not wrong.