Housepricecrash.co.uk - what a bunch miserable buggers. Can I get some normal folks opinions please?

[DaddyCool]

.... and not some 45 old wally still living with mother and bitter because he spent all his money on model trains instead of a down-payment back in 1998?

Not a good cross section on there at all.

Is it going to crash do you think? Please give me your opinions. As far as I can see it's a 50/50 split on the nation's opinion but I would like to see how similar people to myself (parents with small children) think.

I live in the south east and there are loads of houses for sale many which have reduced their prices recently.

But that's just because they are marketed at too high a price to start off with. People try it on and think they can get £30 - 30K over the true value just because they've slapped on some paint and fitted a B&Q kitchen.

59% of all new builds last year were flats, despite the fact that there is a shortage of 3-4 bed houses.

Sorry - should've been £30 - 40K

Noddy - I saw your post earlier - I'm amazed actually. I live in SW London with mega mortgage but would love to live near Brighton, but have always assumed it was as ridiculously over priced as London? Are prices being reduced down there?

I remember when we sold/bought two years ago, many houses sat on the market for 1-2 years, as the estate agents had over priced them, so they just didn't sell unless the vendors agreed to accept a more realistic price. We ended up selling our for 50k below what we wanted - but got a bargain when we bought, as this one was realistically priced and we had to fight off three other buyers (sealed bids etc).

I guess it depends on the area - its a sellers market here atm, but I think there may be a glut of sales soon as everyone is trying to beat the Homebuyers pack date.

DC, I'd like to know the answer to this question too. We are renting atm and were thinking of buying but I think we're going to wait. What I have noticed on looking through the property pages over the past few months is that a) there are suddenly a fair few price reductions, which is a new development and b) I see the same house on month after month so some are sticking. Of course this is anecdotal and may not mean anything but I do think it's interesting.

I remember 15% interest rates. And my parents lost money on a flat in Bath which is unthinkable now.

I think personal debt is at a potentially risky level too, personal insolvencies are up something like 24% compared to last year and I think that's an indicator that people are struggling (can't remember exact figs). It won't take much of a rise in interest rates for re possessions to increase imo. And there are plenty of buy to let landlords who will panic sell at some point I bet. But hey, this is all armchair speculation, I'm no economist! Where are the mumsnet economists and what do they think? I'd love to know.

hijack - WWW are you still going to buy wit your ILs?

SW, will updathe the thread, hang on

theoretically speaking the rise in interest rates will inevitably force the market to go down some, it is an artificial way to do it though so won't bank on it.

One thing I would point out is that in the days where interest rates were much higher, inflation was also much higher.

When inflation is 9% per annum, a house that is worth 100k one year and the same the next had reduced in value in real terms by 9%. This happened in all the previous devaluations of property, where prices did drop in real terms, but very little in 'nominal' terms.

So when people say that house prices never or rarely go down, they are correct in that sense - although the value had decreased they didn't realise it as much as if it had been worth less in nominal terms.

For example in the seventies crash, inflation was so high that it effectively matched the decrease in values, making it seem as though prices weren't going down. In these days of low inflation (and therefore interest rates), a 'nominal' drop in value is more likely rather than just a 'real' drop in value.

I am not saying that they are going to drop, but the market does run out of steam, then IME it is more likely that a 'nominal' decrease will occur. Of course, strictly speaking in economic terms, that is irrelevant anyway - the 'real' value is the only relevant fact. But in market psychology, nominal price reductions are much more visible and therefore resonate more with people than real price reductions.

foxcub there are lots of agents still ramping the prices up but lots not selling
Even though interest rates are historically low if you are mortgaged to the max and it goes up you are going to suffer.Personal debt is very high too and a lot of people are relying on credit cards and equity from their houses to 'live'.We have been sold a dream I am as guilty as the next person but it is a bubble that surely must burst?

ch, I remember that too. I remember the 1970s when I was a teenager andi t was hardly worth keeping money in the bank at all because inflation was so high savings were losing value hand over first and if you bought a house inflation was high and wage wises were high so in a sense you always gained - your wages would be charging up hand over fist and the loan you'd taken on became negligible as inflation also had an impact on that.

The interest rates we paid in the 1980s I think at times are double what people pay now. Front page of today's FT says "London escapes house price slowdown". In first quarter of 2007 annualised rise is 13.3% but slowing down elsewhere in the country.

That 1990s crash mentioned below which we were part of it didn't matter because as long as you can keep up your repayments even if the house is worth less than you paid for it roll on 10 years and you'll be out of negative equity. I doubt we would ever have a crash and levels stay below that level forever.

Fortyplus I did say
a) generally
b) when it comes to buying houses.
I think it is another thread about the relative wealth of pensioners and working families (round here anyway) and whether the economy should favour one or the other.
Remember folks in a high interest rate world your dept erodes much faster to eg borrow on an interest only mortgage now if you believe that interest rates will remain low means that you will still owe nearly as much when the term expires, therefore need good plan to pay it off.
Historically interest rates are v. low.
There has been more than one property price crash.
Many people are relying on discount mortgages unheard of or v. rare I'll bet in 1993, the real rate of inflation is much higher for lots of people than official figures.
Lots of people are experiencing real drops in wages and the accession of new countries to the EU will keep wages down for many others.
MPC recently admitted it dropped rates in 1994 to bolster housing market to perpetuate the illusion of wealth in our 'no more boom and bust miracle economy' a political decision if ever there was one How many more times can/will it do this?
I gather (but have no personal experience) that market is going down in USA, Sydney and not sure about Spain.
I expect a lot of views depend on where abouts in the country people are, walked around again this afternoon after reading this again last night still my choice of 8 overpriced houses available just off to found out exectly how much they are on for.

The existance (or not) of a housing shortage is debateable!

questioname the bank of england recently admitted that they lowered interst rates in 2003 as we were about to go into recession so they do fiddle about with things.Inflation is probably much higher than they are letting on as everything has become so expensive in the last 2 yrs

xenia the 20 grand we lost in the last house price crash certainly mattered to me.

How odd East Dulwich (SE22) has got very gentrified of late. I used to live there until 1997 when it was a nice, but slightly forgotten about little corner of London a little bit too close to Peckham with no trains on a Sunday (albeit with a very good Comedy Club). Now it's got delis, gastropubs and Soup Dragon and the Comedy Club has disappeared into a little back room up Lordship Lane! God help you if you want to buy in Dulwich Village...

We sold two flats for 50% less than we bought them for but we put the cash into this house which then in the next few years more than made up the difference so I suppose it depends if you get out of the market. A lot of people never will - they will stay where they are until they die so a few years of negative equity is irrelevant except to your psychological well being.

I remember the early 90s. We borrowed 4 x income which was very rare and quite risky and I remember the day rates went up briefly to 15%. Not fun.

I used to love that comedy club!I had some friends who lived there and we used to go all teh time.

I work in an Estate Agents in SE22. I also live here and have done since 1996.

I think property here is hugely overpriced. We keep going to do valuations and give the vendors an idea of marketing price and - this happens every time, I promise - they always say "can we try £xx more". So we sometimes agree to get the business (shortage of property generally in our area) then they get pissed off when they haven't had any viewings and have to drop the price. But when they drop the price and the property has been on the market a few weeks, people think there's something wrong with it! So they don't go and view then either.

Tis hard being an estate agent. You just can't win.

It must be. The house opposite was only sold about 1 - 2 years ago and they immediately tried to resell it and it didn't sell - silly price and I see this week it's advertised a a price I doubt they'll get. Two others not too far from here really over priced, no way they'll get that - over £2.2m and no house round here if you look on nethouseprices.com at what they've actually sold for has ever been over or even up to £2m ever.

Very interesting, again as a result of this thread I looked on nethouseprices or whatever (I havn't done that for ages) and although asking prices are up by around 40% over 1 year the selling prices are the same!!!!!
(Although one place I don't remember seeing a board outside and it did sell for quite a low price so may have been a sale within the family).
Noddyholder isn't that pretty much what I said? except I added the bit about it being a political decision

DC whare are you? Have we muddied the waters any more?

questionname you said 93 and I don't know what was going on then as I was too busy clubbing and having a good time

Durh thanks.
Desperately need to point out that I was also busy clubbing in 1993 (how long ago was that? I can barely make myself think about it)

lot of price reductions happening where we are.

this int rate rise will see a lot of buy-to-letters becoming unstuck.

and as a poster says further down, some very end-off-bubble behaviour going on lately - people like lemmings, trying to screw themselves up financially.