House price crash?

[piglet1234]

Are house prices dropping due to MMR etc?

Agree with everything noddy has said.
I have a mortgage, but I would welcome an interest rate rise.

Anyone with any sense wouldn't want booming house prices though. It makes climbing the ladder harder. It means first time buyers can't get on the ladder. It means local people who will occupy homes and create a community get priced out by overseas investors buying and leaving properties empty to sell and profit later.

I don't have kids, but I don't want other people's children to be priced out of home ownership when their time comes (or my own if I ever have kids). This situation isn't good for society as a whole, so I'm all for house price drops.

I think this is the first time ever that a drop in prices wouldn't be an election loser according to a phone in I listened to.

It is a tough one though. When DH and I moved out of the South East in 1989 the prices were tumbling and we felt lucky to have got out when we did. That fall in prices did not last and, since then, the prices have boomed again and again.

DH and I have always tried to view houses as homes rather than investments as we'd have been paying rent rather than mortgage anyway but it's easy to say once you are on the ladder.

DS has just bought his first place near London and I don't think it was a bad idea. I think as long as we have so much wealth and business concentrated in that area the prices will not fall too far.

My friend who is good with money always points out that a drop benefits everyone - even if your own property's value goes down, the next step up on the ladder goes down too so you get to move house whilst owing the bank less on your mortgage.

We are still in the house we bought 10 years ago as a couple - now there are 4 of us in it (cramped) and we are struggling to be able to afford house number 2 - if prices came down it would make that step easier for us.

It would seem odd to me for property prices to keep going up when most people's wages are not going up and even if they are earning a little more, the price of food etc means most people are worse off really.

That's a great site Chunderella. I'll be entertained for hours. Fascinating.

Hi OP. We had our London house valued by two estate agents last week. They both said the market is calmer than it was - buyers are not falling over themselves to make offers over. A house that sold for £622k in april by one of the agents they said they would now market for £600k. The process might take a bit longer, mortgages take longer etc.

However. They both valued our house at over 40% more than we paid last year. It is a particularly popular area at the moment and obviously that's not going to be the same across all of London, but still.

The worrying thing for me would be mortgage affordability checks. We can now borrow way way less than we could. The taking into account of our childcarefees of £500 a month and a credit card bill of £3k reduces what we can borrow by not far off half. And compared to what we could have borrowed a year ago it is way less than half. In fact although we would have 50% equity in our house we may not be able to remortgage when our fixed rate ends next year. That is certain to have some sort of impact on prices?

Yes you are right Chunderella - I forgot about negative equity. Also the fact that it is probably harder to get a mortgage now too.

We've just had our flat valued and the agent said that they're seeing a lot of cases where the offer has been made but the house has been devalued by the mortgage company's valuers. He also said that it's mostly buy to let's which are selling here (barking and dagenham). We've been in negative equity for 5 years and only now can we afford to sell.

We bought 2.5 years ago.
We would not get that mortgage now. It was 3 x Dhs salary so not OTT borrowing.
It's odd really as the house is now "worth" £30k more than when we bought it according to zoopla.

We were very lucky to have bought in June last year. We are in Surrey (on the edges of Zone 6) and everything went mad. Our neighbour has just sold his house which is slightly smaller than ours for £30k more than we paid (identical house but ours has a conservatory which we are about to replace with an extension).

I don't agree that price rises don't help home owners. I will get a much better rate on my remortgage next year as our LTV will go down a fair chunk if the house is worth £30k more!

But if I hadn't managed to buy in time I would be up shit creek as we would only be able to afford something much smaller (we were FTBs) or end up renting. So I feel bad for lots of people including some of my friends who are being priced out right now.

Someone is going to lose whether it goes up or down tbh.