Daily Mail: Is Britain's property bubble about to burst?

[FabulousSophie]

I was reading this article in the Daily Mail today, and was particularly interested to see there is now a campaign group called Priced Out, which is campaigning for affordable house prices. I googled them and went to their website, and signed their petition.

www.dailymail.co.uk/news/article-6064685/Fears-grow-house-prices-fall-fastest-rate-financial-crisis.html

I think it's a sad indictment of our country that property prices are newsworthy. I wish we could go back to flat prices (or rising simply in accordance with inflation) and houses primarily being seen as homes to live in.

The more people have to pay in mortgage and rent is less they spend in the wider economy - that's a worse impact

I could not agree with you more WomanWithAltitude.

Sophie, in the last crash, the following happened:

• some people lost their homes, these were sold off by the banks, usually to cash investors at auction.
• some people couldn't afford to move due to negative equity, so they didn't sell.
• many people thought they could now buy, but got turned down for mortgages by newly risk averse banks.
• some people were forced to move - the people who bought these houses were predominantly people with large deposits or cash buyers

It was not a bonanza time for FTBs. I sold a house around that time, and had keen buyers dropping out because they discovered the bank wouldn't lend to them any more.

(It was a FTB property I was selling btw, so those were FTBs dropping out. Up north, not in London.)

You were lucky then to be able to sell...

I had a first time buyer property that was in negative equity so didn't even get the option to sell til last year (north too)

WomanWithAltitude Nobody is talking about a crash. Younger people just want lower property prices, and if that means prices drift down gradually in different places, that's fine.

My advice to anyone wanting to buy a home is to (assuming you have a deposit) aim to get the best bargain you can (places that need doing up or that have motivated sellers), and don't be afraid to make a cheeky offer if it's a buyer's market and the property has been unsold for a few months.

It sounds like London is a buyer's market right now. Up north isn't. So don't assume that because the Daily Mail says prices are crashing that it applies everywhere.

And buy at the time/place that is right for you, with the intention of making a cheerful home (as opposed to getting rich off it) - don't try to predict the market when even experts acknowledge that it's a fruitless endeavour. Anyone in the SE who put off buying a few years ago because people said the bubble was going to burst has lost out massively.

Prices would have to fall hugely to go back to the levels of even a few years ago, and our government has a habit of intervening to prevent huge house price crashes. They will almost certainly use the means at their disposal to do so again if another crash occurs.

Sophie - London homes becoming affordable would require a crash. No amount of 'drift would do it.

Lilmiss - I had to sell, as I was moving for work. It wasn't great.

I think there were some people that did.
Mildura this is a genuine question but apart from the handful of guys in The Big Short, did anyone go public predicting the 2008 crash?

For as long as demand exceeds supply, prices are likely to remain high.

WomanWithAltitude If the drift down in prices goes on long enough prices would eventually become affordable. Like you say, the government should then aim to keep house price inflation in check, like in most other countries. There was an article in the newspaper recently about how the Bank of England could do that, so maybe it is on the government's to do list(?).

maybe it is on the government's to do list(?)

Yeah, sure... Remind me what proportion of MPs are landlords again?

Our current Tory government is in power due to votes from older people, mainly older homeowners. Look at the voting demographics. They have no incentive to bring prices down, and repeated governments have aimed to do the opposite.

And I still disagree that a 'drift' will make any difference. It would only do so if there was huge wage inflation (which there is little chance of right now). The average wage is c. £25k. The average house price is over 10 times that.

WomanWithAltitude it seems to me that the Tories are stuck between a rock and a hard place then. If they encourage high property prices, they will alienate vast swathes of the younger generation, and Labour could beat them at the polls. If they let prices fall, they will alienate vast swathes of the older generation, and Labour could beat them at the polls. And I doubt a Corbyn government would be positive for house prices. So the political pressure is really hotting up in a way that does not look positive for house prices..

Sophie, you’ve said on these types of threads before that you’re a cash buyer who made a lot of money on a Fulham property.

You constantly post threads like this because you want prices to go down to buy your next property. Don’t pretend it’s out of concern for struggling first time buyers. As soon as you buy you’ll hope prices stay the same or go back up.

Dbrook My interests coincide with the interests of the younger generation. It's not terribly unusual for people to want the same thing.

Dbrook I would prefer prices to reach to an affordable level and remain flat thereafter. I do not care for price inflation. I like flat prices.

For as long as demand exceeds supply, prices are likely to remain high.

If and when the cheap money era comes to an end we’ll see how long the supply and demand argument lasts.

London teacher here, desperate for house prices to come down, unfortunately have heard it all before, at regular intervals

Sophie - if you're a cash buyer, stop obsessing about prices and buy yourself a home. And think yourself very bloody lucky indeed.

I do not care for price inflation. I like flat prices.

Part of the problem is that the price of labour (wages) has been been largely flat while the price of housing (and many other things) has gone up. Uneven inflation.

A bit of inflation in the price of labour could potentially be a good thing for house affordability. (Although given the current conditions - cheap borrowing and willingness of banks to lend large salary multiples, it would simply translate into property price increases again.)

WomanWithAltitude The stuff on the market is all overpriced. I have my eye on something, but it is too expensive for my budget. It has been on the market 6 months now without a price drop, and seeing here how sellers are determined not to take offers, I don't want to embarrass myself by making an offer.

Prices would have to fall hugely to go back to the levels of even a few years ago, and our government has a habit of intervening to prevent huge house price crashes. They will almost certainly use the means at their disposal to do so again if another crash occurs.

What means do they have left at their disposal? I wonder. Cutting the interest rate back again isn’t going to do much.

It’s hard not to agree WomanWithAltitude that London becoming affordable would require a crash. And not just London. Where we live is also vastly overpriced, with lots of houses just sitting on rightmove unsold – so plenty of supply, just no demand for houses at those prices.

for every hopeful FTB there’s another one who has overstretched themselves to get on the ladder and would be facing negative equity if the market crashes.

They’re adults. They made a decision with the same information available to all of us, i.e., prices go down as well as up. Why should they be given more consideration than prudent people who didn’t “overstretch” themselves?