What month will the property crash be obvious in?

[roneik]

Not doom but a question, and I would like to hear some opinions

I reckon by july

The house next door to us just sold for 25 grand more than we paid 7 years ago.

That's something over 10% rise

But his 'predictions' were made at a time when all the polls were showing Ed was almost certain to be PM after the election.

The 'seer' certainly didn't see that one coming did he?

Oh is he/she banned? I was looking forward to coming back to this in July!

Northern lurker, 10% rise over 7 years is hardly anything to shout about.

The new government will do all it can to keep prices high. But it only takes a global event that they have no control over, lack of credit and prices will tumble.

50% of prospective buyers are now turned down for a mortgage due to sensible MMR rules, easy credit days are over.

Until recently the stamp duty threshold kept prices low in this particular area. That's fine for us as we don't intend to move for 10+ years. The thing about the recent sale is that it's the highest price locally since 2008 and over the last two years people have paid more than we did. Very few houses come up for sale so it's not that easy to know what's happening but prices definitely not crashing here.

I don't see prices crashing in 2 weeks' time either. Houses are selling well in London as long as they are correctly priced.

I'm in the West Midlands & here too there is no sign, in fact it's the opposite. We have friends who had to go into rented as nothing suitable on the market. 6 months later despite numerous offers and having being outbid on each they are still searching. I see houses around the corner going for 25 - 40k more than last year & they sell within weeks.

You say there's no sign, but from what you say the signs are there of bubbly, high prices, 40K rise in a year, outbidding. All classic signs of being at 'the top'. Imagine if you bought that house, and the year after prices just normalised because of lack of buyers/credit and it was now worth 40k less than you paid for it! when the morgage deal comes to an end you'll have no chance of getting a decent new rate so the monthly payment will go through the roof, and that is what is going to hurt a lot of owners and push some into selling. If prices start to drop slightly, the fear will set in and there will be a rush to market and a race to the bottom.

Not necessarily.

We bought in 2007. Paid top whack as prices were so high everywhere. We were young first FTB and didn't know that was peak market prices. Put down a hard earned 10% deposit

Bottom fell out of the market in 2008 and we were in negative equity a year after being homeowners for the first time.

Fixed deal ended and we ended up on the SVR rate, unable to fix. The mortgage increased but not greatly - nothing like the 80's and nothing like the scare stories we were hearing all around us. Wasn't enough to make us consider an IO mortgage.

Sat tight and rode it out, at the moment our house is worth £35,000 more than what we paid.

During the last crash, I didn't think people rushed to market. I actually think people sat tight and there was a shortage of houses on the market. In our area we had EA putting leaflets through our door asking us if we wanted to sell because they needed properties. As soon as the market improved people began to sell again.

We are one of the towns to benefit from Crossrail and we are also having a new station built nearby so can only see prices increasing around here.

I disagree, there wasn't a rush to the market during the last recession and i don't see any sings of the market slowing down at all. I have first hand experience of buying and selling during the recession in 2009. We broke even on the house we sold and moved into a larger house which had lingered on the market for months and put a low offer in which was accepted. We then sold this house January 2014 for 100k more than what we bought it for - no significant improvements to it except internal decoration just that the market had recovered and supply outstripped demand. We had 14 viewings and 5 offers on it within 48 hours. This was last year - this year it would sell for even more. Maybe there will be a crash but tbh there wasn't much of a crash in 2009 around here - houses still sold.

The prices here have dipped a little since last year because they were rising at a rediculous pace, but the are still over 50% higher than in 2007. Don't see a crash, there are simply not enough houses available. But I don't have any idea how my children will ever buy.

Interest rates show no signs of being increased. People will just sit on a valuable asset if they don't need to sell it, rather than take a big loss. Overleveraging isn't that common, and MMR has really put the kibosh on it. This hunkering down mentality is prevalent and why this market isn't following typical economic cycles. I might enter the BTL market if prices crash. We are in our forever home already and so I'm not bothered about the value of this house going down and we will be here till I die.

For those missing Roneik

found him

how agreed there are many variables. That's why I'm a bit when people are 100% sure there will/won't be a crash. I certainly keep flipping my viewpoint, I simply don't know. I do feel a bit of an outsider, as we are building a house we will never sell and have a small mortgage that will be paid off soon. I am not a landlord, so I'd be a bystander in any upcoming crash. I find it interesting, as the market has so much much government interference in it, it's not cycling but seems to be increasing without stop. It's bemusing.

green that's roneik all right, ranting as usual!

Green , Ron is clearly of the same er - rather strong, opinions.

I think there will be a massive crash. But I think its for the future, not now. We (more me, Dh not as convinced as me) are trying to pay down the mortgage ASAP as it is huge and I wouldn't want it hanging round our necks in the event of a crash.

Did everyone make it through July then?

Yes thank you Crutch and still no sign of interest rates going up this year.

We bought this house in the slump of 2011.
Our mortgage was 3 x Dhs salary (which we were comfortable with) so we owed £154k
3.5 years down the line and we owe £140k and the house is valued at £228k.
We aren't selling, and don't plan to move, but it's interesting to see the increase.
There was no rush to market on 2008 that I could see!

I know of a landlord selling up two of his BTL's because the recent changes in mortgage relief announced in the Budget. He is an experienced professional landlord with healthy margins who believes once the average Joe realises how these changes will wipe out any profits from BTL they will be a flood of 1-2 bed flats on the market, sending inner city prices plummeting. You are already see flat to negative prices in London. Halifax -0.6% in July. Its going to be an interesting market this winter!

Jenny+1 interesting that he is selling up early, to beat the rush to market.

roneiks prediction probably wasn't based on a conservative majority happening, which was a bit unexpected. They will do all they can to prevent a crash although the BTL changes are interesting and might cause unplanned reduction in values. I've seen lots of posts on landlord forums where they are really angry about the changes and can't see how they will turn a profit - it could take a while to unfold though.

Generally prices are being propped up by very low transaction volumes, a big drop off from 2014.

Really interesting thread.

I look around at local properties and almost can't imagine them selling for more than they already have, some have gone up 35% in three years etc. But it is definitely a seller's market around here (home county), even in August.

Definitely don't think it will stay this way forever. People are having to remortgage post MMR now and some can't so are being stuck on SVRs. First H2B people are trying to remortgage now also and will in the next couple of years be looking at lumping in the equity loan onto the mortgage too I'd wager.

I genuinely find it hard to imagine prices continuing to soar, however, with this shortage of housing they are on about, it sounds like it still will be a seller's market for a while to come. Be interesting what happens when rates start to rise. I have a horrible feeling repossessions will be increasing significantly in the next 5 years, largely due to H2B and MMR. Re big crash, everyone who pays top whack I daresay will cling on and try to ride it out so I am not sure how much will be coming to the market should that happen...

Our house is worth 60% more than we paid for it 3 years ago, which is bloody ridiculous. Booming property prices benefit very few people, I'd rather see things made easier for first time buyers.