"More people want house prices to fall than to rise"

[southutsire]

House prices

As a wannabe first-time-buyer obviously I am pleased with the current turn in the market... but am surprised at this. Just wondered if it's really true (obviously MN is a far more scientific barometer than a survey )

Generally flats and new builds show the biggest falls first and also take the longest to recover in an upturn.Town centre developments can really crash and ex local authority property which has seen huge rises also falls fast.Traditional family homes are more resilient but eventually economics dictates and falls are country and proprty wide

Happy if they fall. Far more concerned that nothing is selling, no one we know is even getting viewings. Not one viewing yet on our house and it was valued at £280 and we put it on at £259,950 hoping to get 250k.

It's complete rubbish that if you put it on at the right price someone will buy it, everyone is literally terrified at the moment of buying anything that might fall 40%.

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Was speaking to MiL about this yesterday, they are soon going to be selling up and moving, and the 'oh, you're not going to get as much for your hosue now' conversation came up, but as she said, it's not just her house that will have the prices going down, and as she will be selling to buy a new house, what does it matter to her if all the prices are falling?

It only matters if you see your hopuse as an investment pension plan or cash point.If you have a huge mortgage or interest only then it will be a shock when prices fall but if you are in it for the long haul as a home then it is irrelevant.Although inflation has rocketed and there is every chance interest rates will rise rather than fall so we will all feel it at some point

Well for us it does matter because as has been said we live in a flat and werwe struggling before to afford a house. Now I think it will be even more difficult.

The problem with falling house prices is not that the value goes down per se (this is a good thing long term) but that the fall is is happening because demand for housing (not rented) has fallen.

One key reason that demand for houses has fallen is the increase in the costs of living and the credit crunch leading to less mortgages being available.

Thus we are going through a painful period where house prices will adjust to more accurately reflect demand. However in the process of adjustment quite a few people will be hurt financially.

What will hurt people is not the fall in house prices but the market conditions (higher inflation and interest rates) that lead to the reduced demand that created the price fall.

I'd be happy for house prices to fall by 35 - 50% tbh

Fantastic I think it shows most people have enough sense to understand that houses costing more is only good news for a tiny minority.

So can any media types explain why the newspapers and tv usually seem to talk of "gloom" when prices are going down and "good news" when they are going up?

Maybe when they say "WE" they are talking about themselves and their own greedy gambles property investments?

Personally, (and possibly egoistically, but who isnt?) I hope the house prices either stay as they are or rise, as long as the house market is actually MOVING! If I cant let my house soon, I will be forced to sell, but as it is now, I just dont know if I can manage to sell it either. Rather the price is stagnant in a moving market, than moving downwards in a stagnant market!

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If it is purely a home why does it need to rise?I have both lost and gained in property over the years but I can see it needs to come down sharply to get the market out of gridlock and to enable average earners who wish to to buy.People talk about losing the money you have made but yopu only make if you sell.If you are gambling on property rising to fund retirement or something else or as a business as I have done then it is about risk and not about a home.I decided last spring to sell as after 10 yrs i could see what was coming and all my friends and family were worried i would lose but i took a risk and completed in august but if it had gone the other way i would have had to swallow it.If you want to make money you need to risk to cash it in w2hich i would never do with a family home.

Chequers

I am guessing that you have either

1. Bought your home to live in for the forseeable future
2. Or bought your home as a first step on a property ladder.

If it is the first, just pay no attention to property prices. If yours is worth less than you paid for it doesn't matter at all. By the time you move or sell it will all be different anyway.

If you intend to upsize, then it is good that prices are coming down. You are paying off your mortgage so that is being reduced all the time. And if houses drop by an average of say, 25% you will probably benefit.

25% of £300,000 is £75,000
25% of £200,000 is £50,000

So chances are you will be able to afford a nicer place to live or more holidays!

You are still lucky. Like others on this thread, even after prices drop by 25% we still can't afford to buy the flat we are currently renting, or anywhere else we would really want to live. Around here a 3 bed semi in a very ordinary location still sells for about ten times the average income - I think it is disgraceful that there was so much glee* over house price inflation in that context.

• By glee I mean people like Rosie Millard, Anne Ashworth, Kirsty Allsop etc...

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That is going to be a problem for many this year.How long have you had the house?

Chequers - I wish you the very best of luck with getting a new deal on your mortgage.

Out of curiosity, when you took out your existing one did they explain how exposed you would be in the event of house prices coming down with such a short fixed rate?

Because IMO they should have.

There is a programme on BBC2 about this later, I'll be watching

www.bbc.co.uk/programmes/b00bf5dq

short term fixed rate, obviously

I agrre upwind.If reverting to the variable rate is going to affect people like this then the banks haven't done their job at all

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Chequers if you can afford your payments and love your home falling prices don't affest you.If you can't get a fixed deal and many people can't then you can go on to the variable rate and ride this out.Prices do eventually settle again and you can tehn look at a remortgage at a better rate.

A ten year fixed rate is less risky in that you won't be exposed to interest rate hikes if there is a period of high inflation. It also means that you are much less likely to have to face the difficulty of remortgaging with negative equity.

IMO shorter terms and variable rates are more suitabe for people with a relatively small mortgage compared to their income so interest rate rises don't affect them so much.

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Did your bank tell you that prices can go both ways and that the fixed rate would end?I am more worried that you feel you would lose your home on such a small margin.Have you spoken to them?

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wtf?patronising you couldn't be more wrong