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

Debt not death, I’ve yet to encounter death to be fair

Many EU countries have rules which are far more in favour of tenants and hopefully remove rogue landlords from the system. That would be far preferable to the current situation.

This morning I read somewhere that the generation about to leave school is, for the first time, smaller than the number of 65-70 year olds. The context was referring to the unsustainability of pensions being funded from current tax/NICs, but this also suggests that as those older homeowners die or their houses are sold to fund care, then there's a much smaller cohort of potential home buyers, hence property prices may languish, apart from any inflation.

You are aware that we’ve left the EU yeah ?

@XingMing The issue is the Powers that Be do not want massive numbers of people being able to afford to buy houses. They do not want massive numbers of people being able to clear off their mortgage is, and they do not want massive amount of numbers of people retiring. So every time it looks as though the masses are up on the deal they will pull the plug. Reset, down the snake you go.

'I'm not sure why you and @freyamay74 seem to think that house prices will zoom up again ? '

@rainingsnoring, would you reference where I've ever said that?

Clue: I haven't.

@XingMing there are more over 65s than under 15s. We have a bit fucked from an economic perspective although there is a belief there will be a glut of family homes on the market as boomers start to die.

It's irrelevant to my comment.

Apologies, I thought it was you who was talking about prices escalating again in 4 years but it was @Tintime2022. You just said that houses were always a good investment which implies long term gain in excess of inflation.

I've said that houses are a good long term investment, partly because long term it's financially about the best asset you can have but mainly because the alternative (which in the U.K. is pretty much 100% private rental) is dire.

Who wants to live with the thread of notice being served constantly hanging over them, with ever increasing rent payments, with all the expense and emotional hassle of having to relocate, perhaps move children to new schools, re-home pets, have no autonomy over how you decorate the home you live in...?

I absolutely prefer being a home owner hands down. I suspect most people feel the same and would bust a gut to be one.

I've also said that house prices go up crazily, way above inflation, then plateau and fall. Once you're established in the housing market this makes sod all difference day to day, because your property is your home and your long term security.

House prices rose on average about 10% year on year and now experts are suggesting a 10% drop, worst case scenario more, before they stabilise and rise again.

How you extrapolate from that, that I think in 4 years time, house prices will have shot up, is bizarre

*threat of notice

PS I have noticed that a few posters seem to jump on anyone who admits to being glad to be a home owner, and interprets this as 'omg, you just think your house is going to shoot up and up and up in value and you'll make a mint.'

Er, no, I'm glad I'm a homeowner primarily because of all the reasons about security already mentioned. I like having a secure home which I won't lose on the whim of a landlord, and where I can put down roots and feel part of a community. And yea, it's without a doubt the best financial investment ive made as well, certainly better than paying shed loads of rent over the years to pay off someone else's mortgage!

'How you extrapolate from that, that I think in 4 years time, house prices will have shot up, is bizarre'

You need to read what I wrote again.
My reading of the investment was as a means of making a good financial return. You say that you meant something else. Fair enough but that wasn't clear when you used the term 'investment'

I think most people would agree with you about long term renting vs long term owning (at least for those with children). The situation need not have arisen; it has been created by the incompetence of successive governments over decades.

I agree and certainly think that paying off your own mortgage is preferable to paying off someone else’s which is the alternative with renting.

@rainingsnoring My reading of the investment was as a means of making a good financial return.

Well, as it happens, it is, my house is my greatest financial asset. But investing in something has a broader meaning than simply financial. I see buying a house as the best investment in terms of security, peace of mind and agency over my own life.

Of course housing in the U.K. doesn't have to be like this. If there were major rent reforms and proper investment in house building things could be different. But while we've got a shortage of housing stock for the population, and while private rental is pretty much the only alternative to buying (and no sign of this changing any time soon) then I think anyone wh

Posted too soon

Anyone who is in a position to buy is crazy not to. I've just seen my niece put down a hefty deposit for a private rental (which she had to bid for and pay over the advertised price) and now face paying more month on month in rent than a mortgage would cost... it's depressing and just throwing money down the drain really - or rather, paying someone else's mortgage.

Sure but you are cherry picking your examples.

Of course your house has made a great financial return if you bought 25 years ago or whatever. Everyone knows that house prices have risen well in excess of other inflation and real wages during that period. What I am disputing is the assumption that this trend which many people have enjoyed in the last 25 years (and others have been extremely disadvantaged by) will necessarily continue in the future.

With regards your niece, I obviously don't know her full circumstances. Presumably she has her reasons for renting rather than buying. Many younger people choose to rent because of job or relationship insecurity as well as being unable to save the deposit. By way of comparison, there is another thread on here by a 23 yr old poster who is married and currently paying half the market rate. It would apparently cost her twice as much to pay a mortgage and in a less desirable area. The decision of rent vs buy depends on the individual circumstances. The housing market is clearly falling and will continue to do so at present so I can't see the sense in rushing in right now as a FTB unless other circumstances outweigh the significant financial risk.

She gets her deposit back when she leaves the rental, unless there is damage that needs paying for, when your house price drops you lose your deposit, and for many people that will be money borrowed from family.

As people cut back on their outgoings in order to pay the debt interest on bubble sized mortgages more and more jobs will be lost in the economy meaning more people going home or "downsizing" their rental to just a room or a flat-share, and AirBnB and holiday homes will suffer in a recession, meaning much more supply of rental coming on to the market.

You can leave a rental, you can`t leave a bubble sized mortgage, and with rates going up in is going to get painful for many, including landlords.

"my house is my greatest financial asset."

That is a major mistake IMO.

You completely missed the point @freyamay74 went on to make. That it's far more than just financial, it's the security and peace of mind.

I feel the same. I don't really care so much how much the house is worth, but the knowledge that the mortgage is now fixed until it is paid off gives me real peace of mind and stability.

No I fear you have missed the point, if all your eggs are in the property basket your "peace of mind" is false, you are under-diversified and heavily exposed to interest rate fluctuations.

"my house is my greatest financial asset."

That is a major mistake IMO.

Point spectacularly missed.

It's not a 'mistake' because it's not a choice! I didn't decide to buy a house because, hey, I'd really have preferred a series of rents my entire life, but I really wanted to put my money somewhere where it would do really well so felt I ought to buy a house. I bought it for all the various reasons mentioned ad nauseum...

It's my greatest financial asset - that's a fact! As it is for many many homeowners. Not because we set out for it to be but because it is!

DHB btw we don't need your faux concern about diversifying ... of course I have other investments including a damn good pension and AVCs.

Fact remains- my house is my best investment, not just financially but for the peace of mind, the security, knowing I can refurbish, decorate etc exactly as I want and continue living here as long as I want.

Over the past couple of months I've seen 3 houses in my area (north) pulled off the market and re-listed as rental properties which is interesting. It indicates that some sellers will simply not be willing to accept lower prices. They will wait it out instead.

Lots of people went into negative equity in the late 80s. I know several who bought at the peak in late 80s and they didn't regain their value for 10 -15 years.
If you needed to move then letting the property was the only option.
That could easily happen again, esp to people who bought this year.

"but I really wanted to put my money somewhere where it would do really well"

I hope you didnt buy recently in that case. If you bought many years ago you couldnt have predicted the interest rate moves and the reckless bail outs that have led us to the present mess, so you really just bought a house because you wanted to buy a house, it wasn`t really a decision about financial gain. People buying now are looking at very large potential losses plus a much much higher debt burden, so the decision is a lot more serious IMO, and people who have not sold yet have missed the window to take the real bubble gains off the table.

The good news is that even if egged on to buy by people on forums etc. many buyers are going to have the decision made by how much they can now borrow, and that is pointing to a really good drop in prices, making it easier for people to get that magical "peace of mind" that you talk about.