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

@socialmedia23 my reply is to your previous post.

I'm a homeowner and our house has gone up 2.5 time in 12 years.

So bought for £400k and now worth Approx £1m.

Utter Madness.

The problem is any house we want to move has also gone up but by more.

With mortgage Intetest rates so high I can't.see how a price reduction isn't coming.

Houses were only affordable at the crazy prices because of the cheap debt. That's now gone.....

A price reduction is here, not coming! But that doesn't mean that every homeowner is an idiot as @DeadHouseBounce tries to make out. Sounds like your house has actually turned out to be a great financial investment - in addition to its most important function of being a secure home.

"For renters, if you can't pay the rent, you need to leave ASAP. There would be no help."
........except for some free money.......

www.gov.uk/housing-benefit/what-youll-get

All the "help" you get with a mortgage is added to your loan, you go deeper and deeper into the debt hole.

"I'm a homeowner and our house has gone up 2.5 time in 12 years.
So bought for £400k and now worth Approx £1m."

With base rate 3% higher than when you bought? Pull the other one, you are only fooling yourself though TBH

Our mortgage will be paid off in 4 years. House is worth approx £300k. We will be 55. We will downsize at some point. Not sure what 25 years of renting - at a higher price than our monthly mortgage payments - would have achieved?

news.sky.com/story/building-firms-going-bust-at-fastest-rate-since-financial-crisis-12770697

How much will prices drop next month?

How much have rents increased @DeadHouseBounce? what are rental price growth predicted for next year?

Housing benefit cap hasn't been updated in ten years. Maybe ok for low income single mum with 2 kids as they get bigger allowance (but she probably can't own either). For a couple with average income with 2 kids, housing benefit would not scratch the surface.. a lot of landlords also don't accept housing benefit.
I am trying to find a place for my single friend with severe mental health problems and I cannot find anything within housing benefit cap in London. Not even studios.

Yes it's not ideal to have so much mortgage debt. But is it ideal to be reliant on benefits that probably wouldn't even cover the full rent and landlord would have extra reason to chuck you out (can charge someone not reliant on benefits more). My friend who works in housing told me that landlords who target housing benefit claimants have the worse homes. And that is for a reason.

You bought when prices are not so crazy. DHB is probably referring to people like me who bought in 2019 with 85% mortgage. I wish I could have bought 25 years ago but I was 5 years old. I didn't know what a mortgage was!

Less house building will actually be one of the things reducing the house price drop, as there will be less available stock

DHB's top argument is 'it's much better to rent because when your landlord hikes up the rent, don't worry cos you'll get lots of free money'

Hahahahahaha you couldn't make this shit up

Plus you can only get housing benefit if you have few savings- 8k or less and even then they deduct HB based on your benefits. Really does not cover majority of the middle class. Honestly if you had that little savings without buying, you wouldn't be able to buy either- moot point..

The system in the UK is set up for home owning. That's the sad truth. In an ideal world, we would either own or live in social housing and indeed in the past that was the majority and private renting was thus seen as a stop gap.

DHB's views stem from a desire that a lot of men have- the desire for autarky. It's why house price crash is largely male (many of them do own properties). Being 'debt-free' is seen as the only way to achieve autarky. I think that for many men, they find the idea of being compelled to do anything or being in a position where others have control over them humiliating. Therefore debt is seen as an instrument of control, but rent is seen as an expense (aka something you have control over). But if you think about it logically, this is a purely emotional view. £1000 is still £1000 regardless of whether you spend it on rent or mortgage. True autarky is als illusory, unless you can run your own hospital and build your own roads, you are a member of this society with all its obligations and that in itself carries a necessary cost (housing) given that you can't build yourself a hut on the first plot of green space you see. Men struggle to understand that not everything can be on their terms, and as much as they would like to be obligation free, real life doesn't work like that. I think women are able to adapt better in a sense to modern society as historically we have always been under the control of others.

Oh that's interesting @socialmedia23

I wonder if there's a substantial overlap between the house price crash posse and the freemen of the land bunch? We get lots of them writing in to work trying to argue they shouldn't have to pay council tax /parking fines etc.

I just got curious and had a nosy around on the house price crash forum. The "renting" topic blows out of the water @DeadHouseBounce 's rose tinted view of renting. There are people getting evicted under "no fault " evictions, people with awful landlords, people struggling with rules set by landlords...

Thing is, we all have to live within the reality that exists in the U.K. Yea, it would be great if there was enough housing stock to meet demand, tons of social housing etc etc But the reality is; social housing is like hens teeth, private rentals in the U.K. offer very little security and rent can easily be as much or more as paying off a mortgage. Therefore, home ownership is something very many people value.

And to be honest, whether it's the primary aim in buying a house (and I really doubt it is for most of us) over time it's likely to be the best financial investment you could make. Not because we intend it to be but because that's how it turns out.

So what it my house drops in value by 30% over the next 18 months? (Which is about the worst case forecast) It's increased in value by 45% in my area since 2016. Like many others I've fixed my mortgage. Even though interest rates have crept up a bit they're still historically low and there's absolutely no suggestion they'll go anywhere near the 12- 15% of the early 90s. (Yeap, I remember that too, and still don't regret being a home owner.) So it's still a good financial investment, plus of course the security I've had over the last 6 years, the autonomy, the fact I can put down roots in a community without the threat of two months notice.... It's impossible to put a price on those things.

Someone said earlier that DHB is utterly obsessed with house prices, which is ironic as that's what he accuses home owners of being! Every other advantage of being a home owner is dismissed by him because it doesn't fit his tired old narrative of resenting home ownership.

That’s why the government needs to introduce more regulation into the PRS.

I agree @C4tastrophe .

The trouble is, most landlords in this country are amateur landlords. You cannot prevent someone from selling a rental to pay for their daughter's wedding/deposit, to fund a larger home or whatever change that is going on in the landlord's life. Unless you demand that all rentals which are sold are sold with the tenants in situ, the fact is that a rental is an asset that can be sold at any time with or without the occupants.

In Europe, big companies own the majority of the rentals; if they do liquidate their assets, it would be a long process and not in the next 6 months.

Which can be fixed with regulation. IE. Landlords can only give notice once per 12 months on the last day of the quarter (Dec 31, March 31st, May 31st, Sept 30) and minimum 6 months notice.
By now there shouldn’t be any private landlords, they should all be running them through companies ( their own or 3rd party) and the companies should have a deposit held at the bank for emergency repairs, like 10k.

Agree! It's what many people have been saying for a long time. But private renting in the U.K. is not like this and people make decisions based in real life, not what they wish were the case. Which is why most people value home ownership and aspire to it.

i wish the government built housing like in my home country and sold/rented it to british residents earning below the median household income (in the area) at a subsidized rate. That is what I aspire to own. I do not aspire to compete with the children of rich people and private landlords for housing. When i bought my flat in London in 2019, we were earning combined £75k so below london median household income of £100k so would have qualified. Now that I put my flat on the market, most of the viewings are coming from v young people (kids of rich parents).

"Which is why most people value home ownership and aspire to it."

BOJ surprise Christmas present today should make that aspiration a lot harder, unless prices come by a lot of course.

Meanwhile a few Japanese men in suits just decided your new mortgage rate.

www.irishtimes.com/business/2022/12/20/bank-of-japan-stuns-markets-with-yield-control-policy-change/