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

Absolutely DHB, hang on in there and maybe in a decade or two you'll be able to afford to get on the ladder

No, this is the whole point there with Nat. They are absolutely won’t even the blip in 2008 has recovered and incrwased by another £100,000 locally.

There’s a saying in most sports that even a bad decision is better than no decision.

There's really no point in engaging with DHB as it's an exercise in just talking to a bot that just repeats the same points over and over with no response to your good points about buying a house for reasons beyond financial investment.

House buying in the Uk is mostly going to be the preferred option in this country until there is a major shift in policy which I cannot see changing anytime soon.

The doommongers are quick to point out price falls but do they think falls are going to last forever? Prices can go any direction in the short term (yes indications they are going down now) but by how much is very location specific and type of homes. Saying prices are going down or up for that matter is very nuanced

Exactly like talking to a bot, though I like to imagine DHB as a sad old geezer sitting in his dingy rented room, hating on all homeowners (while of course envying them) and desperately hoping there's a special place in hell for those of us who have a range of good financial investments as well as the financial and emotional investment of a house!

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
agree, and I've seen this happening

👋

@DeadHouseBounce you and your insufferable HPC crew laughably accuse homeowners of treating property as investment, and yet it’s you who constantly ignore all the other aspects. And you do that because truly acknowledging all those non-financial benefits is simply too painful. Look, I feel for you to a degree, because you really did miss out on so much security, autonomy and personal growth, which must have taken its toll on you and any family you have. Renting in this country is no way to live. But at least try to be gracious as you stare down the barrel, rather than making yourself look even more bitter and more foolish.

It depends on what you are buying. Average first time buyer property in London is 450k. If it falls by 10% which looks likely, you would save 45k by renting. Assuming your niece is sharing with someone else (either partner or friend), she would be paying £1000 per month for a nice room in zone 2 or £12k per year. She has enough money for 3 years rental to wait for it to go down plus does not need to pay maintenance. And I say this as someone who bought in 2019.I don't regret buying as I value the stability but it definitely did not make me richer!

I think mortgage and maintenance may well exceed rental very soon esp if you don't have a big deposit. the only reason why people should buy is due to stability and perhaps certainty of payment i.e. being able to predict your housing costs during expensive times of your live like maternity leave. But not everyone requires that, It is better for younger people who don't need to settle down immediately to rent and save some more.

Yes my niece will be ok if the flat turns out to be ok (it's a share so there's always the what-ifs about flat mates) and providing she doesn't have the upheaval and expense of moving while she waits two or three years.

It's very different once you're more settled, perhaps with kids and links to a community, if you want pets and just want to put your own stamp on a place and call it your own. And it's hard to put a price on those things. At the end of the day, very few people probably buy and sell at the absolute optimum times, renting during the periods when it's beneficial and jumping back into the market at the exact best time. The vast majority understand that house values go up (they've shot up crazily in the last few years) and then plateau and then fall. For security and quality of life, most people accept that and are still keen to be a homeowner - and over time, it's often the best thing they could have invested in too.

"The vast majority understand that house values go up (they've shot up crazily in the last few years) and then plateau and then fall."

No, many people have only known super low rates and ever rising house prices, people tend to just follow the herd for their own time, do you think that the people caught in negative equity for years after the late 80s crash were paying attention to what went on economically in the late 60s? The downturn in property prices that has now started will be a massive shock to large numbers of people.

The "non-financial benefits" that you are so desperate to promote are not worth the debt burden at this point in time, prices are too high and borrowing costs could go much higher. The idea that "all renting is bad" so therefore you should get a mortgage at any cost is a ludicrous and childlike thought process (unfortunately many of those heavily burdened with debt in the UK seem to be at this level) and will already be an idea that many recent buyers regret. Actually you only really "buy" a house if you pay cash, with a mortgage you are a "borrower" and at the mercy of "borrowers rates". Next you will be trying to tell us that Negative Equity is good for the soul?

You own a house at the end of your mortgage term though.
How many renters can say the same, that they can purchase a property outright in their older years. They can’t because they are still in the rent trap

DHB shows such 'concern'... it must be very frustrating for him that it's all good here, with the non-financial benefits such as securely, peace of mind, autonomy... which are actually pretty hard to put a price on. Great that as a home owner it's financially win win for me too.

@Twiglets1 interesting how DHB thinks all homeowners are thick as planks!

Yup their arguments are easy to refute. And they never even try to answer certain questions such as where are they currently living if they are against home ownership on price yet rentals are no cheaper. Or whether they advocate people living at home into their 30s & beyond because the alternatives are expensive & carry some risk whether you choose renting or home ownership.

"You own a house at the end of your mortgage term though."

But you rent the money to buy it for 20 or 30 years at unknown levels of interest? A lot of houses sold in the UK are not worth that commitment.

@DeadHouseBounce if you had bought a house 20 years ago you would be better off financially now than you are. You are going to have to accept that.

No I said "many of those heavily burdened with debt", obviously that will include some people hoping to be homeowners in 20 or 30 years when their debt is paid off.

The only way to own a house is to pay a mortgage on one or inherit one.
You can keep denying it but the end result of telling people not to buy because mortgage interest rates can and do fluctuate is that people will end up forever renters. Which is not a particularly nice situation to be in when your earning power declines, though it can suit younger people who want to be mobile

Agree @Twiglets1 ; I didn't mind renting when I was in my early 20s; I didn't have much stuff and i wanted to be mobile with my career for a bit to gain broader experience. I didn't need much space, didn't mind shared facilities and it was ok.

Once I was out of that relatively short phase, my priorities completely changed. I stated to buy my own furniture, pictures, wanted a pet, then I was getting married, having babies... no way would I want the stress of a 2 month or even 6 month notice period hanging over me. The financial upheaval of moving house on the whim of a landlord, plus the emotional upheaval of changing nurseries and schools for the kids - hell no.

Neither would I want to drag a family through the whole process of trying to sell at the top of the market, move into rented and then jump back onto the ladder when prices were at their lowest. Bloody hell, life's

Life's for living, not existing in a constant state of insecurity, at the mercy of a landlord

Yeah I agree.
That is worth a lot in emotional terms alone. Most people weigh the 2 things up (buying v renting) and make the choice that is right for them at the time. They both have advantages & disadvantages.

Only DHB seems to think you can avoid high mortgage costs and high rents like there’s a 3rd option we haven’t thought of. Living with your parents rent free til they die is not a viable option for most people.

I have an ex neighbor who sold her flat a few months ago, moved back into parents with her kids (who live in a flat above a pub) so that she can buy when the market is at the absolute lowest. She is really savvy but I couldn't do it myself. would probably be a lot richer if I did.

I think the reason why people take the risk is because from past precedent, they know that the government would bend over backwards to make life easier for mortgage borrowers. Even now, RIshi Sunak has instructed the banks to be as flexible as possible with mortgage payments- convert to IO etc. Not ideal but means you don't lose the roof over your head and maybe in future you can play catch up esp if inflation pushes up wages in cash terms. For renters, if you can't pay the rent, you need to leave ASAP. There would be no help.

In a sense, in our current system, low earners (other than the precariat who don't; have a spare thousand to fix the boiler and really should go for social housing) benefit from home ownership because they would be better protected. They are already relatively cash poor so its not like they have hundreds of thousands to invest in the stock market if they didn't buy. On the other hand, they absolutely need a roof over their heads and their parents probably don't have the inclination to house them for free. For such people, home ownership is not a way to build wealth, its just a way to ensure stability in a highly competitive housing market . Not financial stability but financial predictability. Of course for younger people, financial predictability may not be so important if they expect earnings to go up so perhaps rental would be better. But thats not true for a lot of people.

You can fix your mortgage rate but not your rent etc. Ironically, the rich stand to lose the most from home ownership (unless they are land owners) as the opportunity cost of them not buying is actually very low. They can probably afford to rent high quality serviced apartments and due to less competition at that level, they would not be kicked out so easily. That demographic should really think before splashing £1 million on a roof over their head.

Good for her! But many people haven't centred their house buying and career around where their parents live in order to conveniently sell up and shack up with them for a few years until they fancy hopping back on the ladder. Also, many people don't want to live under their parents roof when they're fully fledged adults, and neither would all parents want their adult kids living rent free with them!

This reinforces my earlier point: yes of course there are a few (financial) winners who sell at the top, live rent free with security (I guess your neighbour's parents aren't going to chuck her out with her kids!) and then hop back on the housing ladder when things have dropped to their lowest. But very few people choose to live like this, and as previously stated, for most people it would mean the upheaval and insecurity of renting in between selling and buying anyway because most adults aren't going to move back in and be bankrolled by mum and dad.

My house will probably drop in value over the coming year. Am I going to sell up and move my family into rented, hoping to make a mint? Hell no! It's increased hugely in value, now it's going to drop, but you know what, it's my home, it gives me security and independence and why the hell would I go through all the upheaval of moving into some insecure rental and then go through the madness of trying to cadge a bargain against other prospective buyers, not to mention all the crapness of stamp duty, fees....