Your views on house prices

[bringmeashrubbery]

I'm sure this has been done before but I wondered what peoples' general opinions are on the future of the housing market ? Are we destined for another crash ? Will prices rise crazily until all I can afford is a shoebox in't middle of road etc etc. I suppose I am looking for some considered opinions rather than the often hysterical type views that are perpetuated by the media.

Cheers

Can't do links but on sky news the first story on the business/money section shaows that the house price and personal debt boom was deliberate to bolster a feel good factor and avoid a recession.I have bought and sold 8 houses in the last 10 yrs for work and other reasons and quite a few agents have been saying that time is running out.If interest rates have to rise to curb inflation many people who have remortgaged again and again will feel the pinch I personally hope they fall as your average family has no chance

I regret listening to my inner caution tbh and not borrowing as much as we could have done when we were in a position to do it. We'd be a lot better off now if I hadn't been so worried about the possibility of a crash. (Scarred by my mother's house being repossessed in the mid-80s recession.)

Although we are lucky compared to people who can't even buy their first house or are trying to raise a family in a one or two bed flat, obviously.

Margo, house move is going "OK" - our buyers haven't been 100% straight with us (told us they had exchanged and were going to complete last week, but haven't actually exchanged) and I think there's a chance they'll try to knock the price, but our purchase seems OK. Scared of jinxing it!

I'll keep vibing for you then Hunker

sadly i think with second home owner thing and coupled with buy to let thing there and er, there just isnt enough housing anyway...

...the prices will rise and so make it unattainable for more...they will pay high rents to landlords and so be unable to save etc...

too difficult to get to buy for normal salaried person now, kind of down to if family can help scenario..
kept on waiting for prices to fall but they didnt..there is a shortage and its a market enconomy..its strange

like going back to propertied and non propertied people

oh and good luck hunker munker...hope it goes easy on the nerves....

..our neighbors incl ds's little friend are moving soon too

@ sobernow.

Blimey, 18,500. Have you seen the prices lately?

I think it very much depends on what part of the country you're in, what kind of home you live in and the demand in that area.

You can look at different boroughs of London and see the differences on a month-by-month basis. Islington, for example, seems to have reached "saturation point" - whereby it has some of the highest prices per square foot in the capital and the middle class people who had been moving there and "gentrifying" the area are now looking at Hackney and other boroughs. Islington prices are plateauxing in response to this, but they're not "crashing".

I think the market is more cyclical than it has been in the past, thus less chance for "crashes" than in the past. Plus mistakes have been made and learned from.

The "experts" in the bank at which I work have been calling the top of the market for the three years I've worked here and we still haven't seen it...

I think it's a plateau in our area in the north-east. We bought 2 years ago for x amt, and a replica (less conservatory) house just down the street is on the market now for the same price, it's been for sale for at least 9mths now. We'll have to stay put for awhile to see any capital gains I think.

A "crash" is highly improbable, more likely is a collapse in liquidity. Prices remaining stable, but harder to buy or sell. A way to think about is to imagine that there is a "true" price for the house.
The amount actually paid is a function of how much the seller needs to shift it, how picky buyers are, and the effect of chains. Under stress the lenders will take longer to provide loans checking them more thoroughly and turning some down on seemingly random cases.

That means in the next correction the spread around the "real" price will widen a lot.

The last correction became a bit of a crash because lenders foreclose too early. By that I don't mean they were being inhumane, such an idea is alien to them but that they would have made more money by taking a longer view.
London is the centre of the world for financial innovation, so surprisingly enough a large number of techniques are ready to make money from the next downturn. Typical plans include forms of shared equity or rend/buy back etc. Again this is not charity, but when things go tits up give the homeowner more cohices than the idiot accoutancy of the retail baking sector. The converse of the success of investment banking in this country is that retail banks and building societies are run by those who lack the brains or personal integrity to do the big stuff.

The market may be flooded with buy to lets which are not covering their mortgqages(I am talking amateur landlords who have bought in the last 5 yrs)and also people who have repeatedly released equity up to their max and will have difficulty meeting payments when rates do rise.This will push prices down a bit surely?

Definitely it will push prices down.
That's not the same as a crash though of course it makes it more likely.
B2Ls often have dreadful risk management, and their lenders don't make much effort to push them in this direction. A big problem is that they cluster their properties, partly to save a bit of cost&time, but also from conversations, I get the impression that they enjoy having a piece of an area. Whatever the reason, that's poor diversification, and thus more risky.

There are people (often also B2Ls) specialising in nipping in when this goes wrong. Their net effect is to make the shock to the market smaller, though the B2Ls personally get hit hard.
However B2Ls are as much a symptom of the bubble in the market as a cause. A big driver is the fact that we have a massive housing shortage in the places people want to live.

I agree DC don't think there will be a big crash as such but I think the houses in popular areas will level out or drop slightly and those in cheaper areas (where agents have been blatantly trying their luck with prices)will fall.

I agree that we have a lot of local bubbles, which is why I fear so much for Buy2Letters who over-localise their portfolio.
One reason I've seen for these is poeple coming to London. More than once we've had conversations with people from the provinces who see a "trendy" area of London, and think they are good places to buy in. They are quite strongly resistant to us pointing out that various areas that were cool 5 years ago have reverted back.
People do not do their homework on what for most is easily the biggest investment decision of their lives.

I can't help thinking that the media don't help either.

DH is always so upset that we can't buy our own place, but there is just no way.

We're giving £700 a month to someone so we can borrow their house and they won't even let us paint the f*ckin thing without a start date, end date agreed colours and photos being taken.

We have to have a guarantor despite us having been here for nearly 3 years, never an issue with rent payments and my mum doesn't think she can do it again this year so we will have to leave the home I love

DH wants to move to Wales to be able to afford somewhere but he doesn't seem to realise that I don't think I would survive away from my family.

Its all just sh*t

I'm sorry - most of that wasn't relevant... just low and started pouring out.

Flamesparrow - I do sympathise. like I said below I really think they should change the law on tenancies. It's a pointless gesture but I'll put a petition up about it soon.

If it helps, landlords always accept either a larger deposit (say 3 months not 1) or 6 months rent in advance instead of a guarantor - we've done that in the past. I know it's easier said than done, but do you know people who could lend that much?

If all else failed I would get a loan for that much. Its going to be a long pleading job I think come September. We're good tenants, no trouble - only call if something major breaks - do they really want to go through the hassle of finding new people who could be unreliable etc??!!?!

I am sorry for that little outpouring though - was having a very very low hour and it was just the thread to send me over the edge