UK house prices post biggest fall since October 2008 - Halifax data today Weds 7th Dec

[jimmyjammy001]

Just a quick note for anyone looking to buy, in particular first time buyers who run the extreme risk of running into negative equity if buying with a low deposit

UK house prices post biggest fall since October 2008

Also its important to note that "Property prices are up more than £12,000 compared to this time last year, and well above pre-pandemic levels (+£46,403 vs March 2020). "

I suspect there will be bigger falls yet still to come as well

Prices could easily come down 30% before adjustment for inflation imo.
The cost of credit has increased so much that the amounts that potential buyers can afford have reduced by 20-30% already and that's before the lenders really start tightening and before sentiment really reduces.
The majority of the people making forecasts have plenty of 'skin in the game' and don't want to frighten people.

Just because buyers can only afford 30% less doesn’t mean anyone is going to sell them their house for 30% less. Would you ?

I can only afford Sainsburys, ill let M&S know the markets changed and they need to accept less money for the same quality of goods and report back

Just because buyers can only afford 30% less doesn’t mean anyone is going to sell them their house for 30% less
true, some will sit tight & refuse to sell unless they get what they want for a property.
But if you HAVE to sell then you'll have to take whatever you can get. Also estate agents need to make sales in order to stay in business, they wont want a glut of overpriced properties that dont sell on their books

Some people will, eventually, be forced to sell for a lot less than the peak price from 2021/ early-mid 2022 depending on area. If you really need to sell you will be forced to accept a lower offer and perhaps there might also be an advantage to those upsizing anyway in that the larger houses will fall more.
This has nothing to do with Sainsburys vs M&S.
You don't seem to understand how markets work.

So you can’t find any experts to predict a 30% correction as a likely scenario? Just your own opinion?
Ok you’re entitled to your opinion but I prefer to believe the experts & I’ve yet to see a professor organisation claim that the property market is likely to crash by as much as 30%.
A correction of around 10% is far more likely, which would result in a stagnant property market not a crash. Still good news for first time buyers. Not necessarily a bad thing for homeowners unless you are one of the few who are locked into negative equity & unfortunately forced to sell without being able to move up to a more expensive property.

I haven't looked for expert to back up what I think is likely but I have briefly given (some of) my reasons for thinking this and said that I think a lot of the 'experts' are very biased plus economic projections by experts are so often wrong. Clearly, an estate agents isn't going to sell many houses if they start advertising downturns of 30 or 40%. I think a 10% reduction has already happened in lots of place but just not shown up in the official figures yet. I don't think a 10% reduction will be enough to help FTB as rates have risen 4-5 fold and lending criteria will tighten but that would, in turn, lower prices.
Everyone is entitled to their opinion and I know lots of people disagree with me. We'll have to wait and see what happens over the next couple of years.

I have a very clear idea how markets work thank you, forced sales and fire sales will be few and far between, but just because Mr Smith and Mrs Smith’s down the road got divorced and had to sell their house. Perhaps for less than they ought to have it does not mean Mr and Mrs Jones have to follow suit.

People can sell their houses for whatever they want and all market conditions, or they can choose not to sell it all and create a supply issue.

I think that your main point is that some people will choose not to sell rather than accept a much lower price. I agree and think that will are likely to see a big drop in transactions.
However, Mr and Mrs Smith's sale price still has the effect of lowering Mr and Mrs Jones's down the road.
As time goes on and sentiment falls, it may be that Mr and Mrs Jones decide that they would be better off selling now because they can see that prices are likely to fall further and that they are likely to get even less unless they perhaps hold on for some unspecified time in the future.
There is another sector which is likely to increasing selling and that is those that rent out property whether long term or AirBnB type rentals. I think will are seeing and will continue to see more sales there.

Grocery shopping is a particularly poor analogy for house prices. As grocery prices aren't decided on an individual customer haggling level. Whereas houses are.

Plus even with groceries, if lots of people - most people - can't afford current M&S prices, then either M&S starts lowering its prices to meet what its customers can actually afford - or it goes bust.

With house prices, though, your analogy works even less well. As house prices (unlike M&S prices) are based on local comparators. So even if there's only a single sale in an area, that on its own is enough to swing house prices for the whole road and even area.

If there aren't enough people who can afford current house prices, then prices will fall. It doesn't matter in the slightest if you or 99% of buyers decide they won't lower their price. As house prices are based on sales - not on houses that are not sold or taken off the market. Let's explain - if there are 100 identical houses on a street, priced at 1 million, and 99 of their owners decide not to sell their house at a penny under that, if just 1 of those 100 has to sell in a hurry, at 30% off, then suddenly all houses in that street are now worth 700K NOT a million. The other owners don't need to and indeed can't do anything to prevent this - because house prices are based on what buyers are prepared to pay, not on a random figure an owner would like to receive but no-one is actually willing to pay at that point in time!

Nope, might have been the case previously where one house selling at a lower price set the tone, not anymore.

House selling and buying required negotiation and meeting in the middle in previous years, skilled sales people creating win win scenarios. Not anymore estate agents are precisely like supermarkets. Take your chosen house to the til and pay. If you cant afford it get out if the shop.

I think this was true the last two years but over the last three months that seems to have changed.

The trouble is the precedents been set now, and the skills have been lost in a estate agency, so they literally do consider themselves to be ordertakers not sales people. Buyer will come in. I’d like to make an offer of 10 grand below the asking price Estate Agent phones vendor. You won’t believe this he’s made you an offer of 10 grand below the asking price, end of transaction.

My cousin lives in a European country where renting is much more the norm and tenants have far greater security and stability. It's just totally different, I mean my cousin's family even bought the kitchen and has it fitted when they moved in to their rental property ten years ago.

For most people, security counts for so much; it's not so much that people are obsessed with house buying just as an asset (although of course it's that too) but they want the stability of knowing they're living their life somewhere which can't be swept away in a matter of months.

Unless legislation and attitudes around renting change systemically in the U.K., which I can't see happening any time soon, there will always be a market for buying even if things slow down and prices level off or go down. Plus of course as well as being a home, a house is absolutely a great long term investment

@Tintime2022

I think you are delusional

The only thing that supports house prices anywhere near this level is the cost and availability of credit. The cost of credit has gone up... therefore house prices go down, basic economics

Ok 👍
We’ll see, speak to you in 4 years time

You keep renting @Alexalee, much better

Don't know why you think I rent, not all property owners are delusional and think house prices only go up.

I dont like to make assumptions but I'd wager that You and tintime are both under the age of 40 and have high ltv mortgages and bought a house within the last 2 years.

What will happen in 4 years time tintime?

I don't think they always go up, which you'd see if you read my last post! But frankly I'm bloody glad to be a homeowner and not paying shed loads in rent with the constant threat of notice being served.

Sadly not under 40... add on another decade!

So you probably hadn't bought a house in the late 80s, the last real prolonged house price crash/fall

Also why do you think house prices have more than quadrupled in the last 25 years?

@Alexalee personally, I don’t think anything will happen. That’s the point, but if it did happen, and let’s say it happens next year, in four years time will be back to this point and escalating once again.

God yeah, I remember that well. And yes I'm still glad I'm a house owner rather than renting. Not sure what point you're trying to make!

House prices go up, house prices go down; long term they're a good investment and frankly I'm very glad I own my home rather than forking out extortionate rent, having the constant threat of notice being served and having the incredible expense and upheaval of moving whenever the LL does serve notice.

Unless the whole culture, mindset and legislation around renting in the U.K. undergoes a massive change which I don't see happening any time soon, I will always prefer to own. That's me.

But you do you.

I am well and truly over 40. If you have a look at any of my previous posts, and I sold houses during the 90s, which was a particularly grim time to be in Estate Agent because nobody bought them literally nobody bought them. Even the repossessions sat empty.

it is absolutely ludicrous to look back in history and use that as an indication of future performance on the basis that all of the regulations and market conditions have changed it’s unrecognisable.

oh and very few people will have a low loan to value ratio these days, because 5-10% mortgages were completely withdrawn during the 2020 to 21 period, some were we introduced at quite a high rate from 2021 onwards. Most people who have bought in the last two years have upsized or downsized as apposed to being first-time buyers I would wager. When I came to view my house purchased in the last three months, there was a queue around the block of cash buy to let Landlord’s that wanted it.

So you probably paid over market value at the peak of the market... I see why you don't want to believe prices will/can fall

@Alexalee I've posted several times that house prices go up and house prices go down. Can you not read??!

Well I didn’t really give a shit to be honest because I just made a 60% profit margin on the last one, ended up with a bigger house in a smaller 🙄
Oh and no stamp duty