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Original poster

If the price of your house fell by 35% would you be screwed

47 replies

Twiglett · 18/09/2007 18:11

10% chance of a house price crash like the 1990s I don't believe this is going to happen though

But I think we forget that it happened in the early 1990s ... "In the last housing market crash, average prices fell by 35%, adjusted for inflation, from their peak in 1989."

so would you still have equity if your house price crashed that much?

OP posts:

SlightlyMadSweden · 18/09/2007 18:45

Agree with Pooka...kind of hoping they fall by 35%. Overnight would be good too

Tinker · 18/09/2007 18:46

This reply has been deleted

Message withdrawn

Hulababy · 18/09/2007 18:49

As our house is new and we only moved in 2 years ago, then no - we wouldn't have any equity left in it I guess. Would b e worth less than we paid for it.

However, it would only affect us if we decided to move - and we simply wouldn't make that decision at that time.

Financially we'd be fine long term.

FrayedKnot · 18/09/2007 18:51

A big chunk of our equity would be wiped so we'd just have to sit tight, or if we HAD to move, we could, given all prices would be less.

Our mortgage is fixed until 2010 so not overly concerned.

MintyDixCharrington · 18/09/2007 18:55

subsidence? what subsidence? if this place was going to subside it probably would have done so sometime in the previous 400 years

DaphneHarvey · 18/09/2007 19:00

Yes, Chankins - it would help people to get on the housing ladder. If, in say 5 years time, house prices are 35% lower, but meanwhile salaries had gone up a bit, then houses would be more than 35% more affordable. Realistically, a very good thing for the future of our children etc.

peanutbear · 18/09/2007 19:02

I would because I am selling or trying to at the moment and I only bought it 2 years ago

peanutbear · 18/09/2007 19:03

I would because I am selling or trying to at the moment and I only bought it 2 years ago

SueW · 18/09/2007 19:07

This reply has been withdrawn

This has been withdrawn by MNHQ at OP's request.

UCM · 18/09/2007 19:08

You really are Camilla aren't you, it's Buck house, isn't it. We wont tell anyone promise

Am of anyone with 300k equity in their house even if it fell by 33 per cent

chankins · 18/09/2007 19:08

Thanks daphneharvey - not that I wish bad fortune on homeowners of course - but we live in a lovely area thats so overpriced, we both work and cannot afford a mortgage, unless we lied about our incomes, which a lot of people I know have done in the last few years in desperation to get on the ladder. As much as we hate renting, we're glad we've sat tight because if we had bought we would prob now lose

saggarmakersbottomknocker · 18/09/2007 19:12

I'm sure there are plenty of twenty-somethings out there praying for a crash.

And loads of their parents too. I'm resigning myself to never having a spare room.

Reallytired · 18/09/2007 19:57

I think it would be great if housing dropped in price, provided no one is hurt in the process.

I feel so sorry for first time buyers. Our house is a first time buy and it its now worth 200K. We can't afford to move up which means that our house is not available for first time buyers.

I just wish there was a way that house prices could drop without people having to go through the hell of reprocession.

One person's gain is another person's loss.

Lizzylou · 18/09/2007 20:00

We would have a fair bit of equity left, but would be buggered as we are trying to sell in order to move to New Zealand, so our dream house would have to be considerably smaller/cheaper than we'd planned!

Kevlarhead · 18/09/2007 20:01

"I'm sure there are plenty of twenty-somethings out there praying for a crash."

Yes we are...

rantinghousewife · 18/09/2007 20:02

If you're talking about the amount of mortgage left, then the market would have to drop by about 60% for us to fall in neg equity, but as UCM pointed out, it wouldn't matter because we would still have to live here.

ruty · 18/09/2007 20:02

we only just managed to buy a flat last year in a good school catchment area, and now would like to buy a house. If prices drop by 35% we'd be well and truly fucked.

DaphneHarvey · 18/09/2007 20:03

I experienced the negative equity trap in the early 90s. Needed to move because of DH's job but couldn't sell flat. So rented it out and rented in the new location. Wasn't ideal, but so long as you can find someone to rent your place for more than the mortgage then you should be able to keep your home until prices pick up.

Or is this unrealistic?

LaDiDaDi · 18/09/2007 20:10

We would have pretty much no equity left in our house but we bought it with the expectation that we could live there for a very long time, well I did, dh often says he will want to move in a few years as he will be bored .

So we would just sit tight until prices came up again which is what most people would do unless interest rates meant that they couldn't pay the mortgage or personal circumstances forced a move. People will always need to relocate for work, get married, get divorced, have more children and die. Then those who can't currently get on the ladder will be able to buy and aprices would start to rise again.

shreddies · 18/09/2007 20:12

It's not really an issue unless interest rates shoot up and people can't afford their mortgage payments though is it?

Personally, we'd benefit if they came down, as we have a flat I bought ten years ago with a small mortgage, but no way can afford a garden and third bedroom in the area we're in now

Kewcumber · 18/09/2007 20:12

no - as long as I can affod the mortgage which I could unless there was a substanital interest hike. I would just stay put. Coped with both a crash in prices and massive increases in interest ratesin the 80's by staying put and living on cardboard soup and water.

gegs73 · 18/09/2007 20:22

Wouldn't affect us. We can't afford to move at the minute and if the prices dropped it would probably be good for us as the difference between our house price and what we were looking to buy would be smaller.

35% crash would mean our house price would still be higher than what we paid for it 5 years ago. House prices are ridiculous at the moment!

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