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

@Cybercynic totally agree , they need to come down and stay static so wages can begin to catch up
Most peoples wages go on high mortgages and High rents

I am not sure if I agree with this fully. Last 2 years of house rises was driven by FOMO, a classic symptom of bubble behaviour. Otherwise who in their right mind would pay significantly more than the saving from stamp duty holiday. For some reason, housing is an emotional decision. We do not go crazy overpaying for cars, despite cars being kinda necessity (with the alternative being Uber or public transit). It is pure FOMO with the imagined promise that house prices may never go down.

There were people on this forum who would gleefully suggest how they got multiple offers on day 1. Nobody 'forced' anyone to buy those properties - their own FOMO did. I know people in my own friend circle who bid over asking knowing very well the price was ridiculous. But one of my friend also told me, property always goes up in value in the UK. Well if that is truly the case (and the data suggests over long term it is true) why should anyone be upset including the folks who borrower from mom and dad to pay 10-20% over asking. It should all take care of itself...right?

Nobody here is celebrating as you suggest. All that is being pointed out is that there are consequences to every financial decision. And as my previous post suggested a general house price reduction should be welcomed by all. And I say this as a home owner who has benefitted from equity gains over the years. Because I wish for my children to be able to afford on their own.

It's not fomo though is it? We have to live somewhere. We saved for years to buy our house this year. My mortgage will cost £600pm more if rates stay as they are when our fix ends. It will still be cheaper than our rent was. It's not as though people have decided, I know what will be fun, lots and lots of debt!
House prices have been high and interest rates low all my adult life.
It's frankly absurd and insulting to describe it as a choice.

yes someone told me yesterday on MN that 392k for a 2 bed flat in London is not a reasonable price compared to when she was a child. I can hardly take a time machine, can I? However its still cheaper than rent- a studio is now £1020 in London which is my current mortgage. Unless i wanted to live permanently with family or pay expensive rent, i have to buy. And my housing costs are fixed for another two years unless i choose to trade up to a bigger flat.

@SollaSollew if you choose to impute your own emotions ("glee") onto a statement of fact ("chickens have come home to roost" namely all actions have consequences), and choose to ignore basic economic functioning (risk taking on personal debt has consequences), it's small wonder you see victims. Nobody who is servicing their chosen debt levels has a problem with the roof over their heads. Changes in personal circumstances are personal, not the responsibility of state decisions that everyone has to live under. You conveniently forget that even now, residential mortgage debt is heavily subsidised even at 6% let alone the fixed deals of 2-3%. So most of the chickens are still a long way from roosting. That's a fact. No need for any angst about imagined "glee" when the most of the world is just getting on with juggling their lives and not that interested in your personal circumstances any more than you were or are in theirs. That may remove some of the distaste from your mouth unless you are partial to bitter flavours.

I am not sure who is insulting who. And why the words are being twisted.

There are people here who suggest house is not an investment, so not sure why anyone should worry if the prices go up or down.

And of course renting is a worse option but does it mean paying 10-20-30% over asking? Then why stop at 30% just pay 100% over asking (if you are cash buyer) and if not, the Bank would not lend you.

Your mortgage going up a lot is what is called interest rate risk and even that should be okay if you were stress tested for that. Interest rates being low was an anomaly not a rule.

What the current prices have essentially done is create 3 classes in society. People who bought years ago and have greatly benefitted from gains, people who bought recently at ridiculous prices and those who continue to rent , either by choice or due to compulsion. The last 2 categories are the losers in all this.

It is not a matter of emotion but har reality. Nobody is insulting anyone.

is this really still happening? We know at least 8 lots of housebuyers who were looking in Trafford (altrincham/timperley/ sale). last one completed in altrincham last week at under asking, which is very different to most of the others who paid 10% over 12 to 6months ago

Good! I might actually be able to afford to buy one now! My ex-husband. Ought our last house at the top of the market in 200?6 and left me to sell the pile of shit when we divorced. I lost £15,000 so I know what it's like but house prices now are ridiculous.

Well the market is basically dead as a dodo now. There are some panic sellers, and landlords mostly off loading shite. Also death, divorce and debt sellers, as always.
Let’s see what Easter brings.

@maryso this is nothing to do with my personal circumstances I'm well insulated from financial difficulties and fortunately as are most of the people I know. So whilst not personally impacted I also can, and do, feel empathy for people whose economic circumstances aren't so secure when mortgages, utilities and food all dramatically increase in price.

So yes people "servicing their debt" do potentially have a problem with the roof over their heads. If, as a society, we can't feel concern for those people "going about their lives" and not just point and LOL at them for trying to own a stable home for their families, then we have very significant issues indeed.

You know your own intentions better than me so as you deny that your own comments were gleeful or distasteful I'll back up my statements with evidence that it's not "imagined"...these posts just from the first page…
“well you certainly fit the smug patronising mumsnet stereotype”
“Sorry to sound borish but yippee”
“"What's boring is people banging on about how much their house price has risen"
Going to be a lot less of them about soon, LOL, just need the punters who have a phone in their face all day to fuck off and things will be getting back to how they should be.”

Anyway these threads always bring out a very particular "specialist interest" type poster and end up feeling like a lesson in English comprehension, so I was naive to expect serious reflection. Just posting in solidarity with people who are genuinely concerned about what this means for them who are being met with derision.

Houses rising 12 percent a year is not sustainable the boom has to end. I feel for those who have bought in the past 2 years. Prices will recover they will just have to sit tight, my house has increased 60k in the past 2 years. I've done sod all to earn that money just sit in it. I'm not bothered if it goes down in price I didn't earn it and all the other houses also go down in price..

A correction is good for everyone apart from those who bought in the last 2 years but the housing market is a gamble.

@SollaSollew I agree entirely (and am coming from a similar position; we are nearly mortgage free, but I am well aware of many who have just about scraped onto the housing ladder after years of saving and living in unsatisfactory private rented. Who would gloat at their worries?)

Ps great username!

No no, you need to bone up on your dick energies, small dick energy is when you bray about the value of your house for a few years after you saved some stamp duty, then the mortgage goes up by £900 per month, that would shrink anyone`s dick. LOL.

Yes, stagnate after a proper crash I can see, but some people seem to think the SD/Covid "froth" will come off and we will "stagnate" at Super Bubble prices, just not going to happen IMO.

If the chancellor had any ‘dick energy’ he’d drop stamp duty (a needless tax on someone trying to live their life) and introduce a sliding CGT on house sales, with an offset for home improvements, years of ownership etc.

I agree with most posters that this is a good thing. House prices have rocketed far too high and are now out of reach for most young people wanting to be independent. It's a sad and precarious state of affairs and is causing intergenerational problems.
Removing stamp duty (and council tax) and replacing it with a property tax based on current value like in the US would be a fairer method of taxation. They won't do it and I definitely can't see any government introducing CGT on homes.

Thank you @SweetSakura sometimes I despair. I'm only posting about the tone of the comments and not proffering a negative opinion on the merits of a house price reduction beyond that it's not all shits and giggles for everyone.

As I say it always happens on these threads but generally I really like the property board and have had a lot of useful information here so I feel like I should stand up for people who are affected and want to talk about it without someone coming along to tell them they're an idiot and it serves them right.

@SollaSollew I don't see anyone interested in your personal circumstances. You seem to reduce it all to what you feel, however there is no truth in motive or action unless there is knowledge.

The single indisputable fact is that low land prices will benefit everyone who needs a home, that is the truth, even for those who have overpaid in the last 14 years, and especially for those who intend to trade up even if they are in negative equity. My disinterest in this does not detract from the fact that falling asset prices that have hitherto been artificially and completely unsustainably bloated are the best thing economically. The real shame is that it took war and plague to trigger the correct action, instead of it being achieved by democratically elected governments. In this case, Mencken got it quite right when he said "Democracy is the theory that the common people know what they want, and deserve to get it good and hard". Instead of knowledge guiding truth in motive and action, we voted for and got Trump and Johnson and the rest of the global cohort of self-serving false-promising leaders.

Currently loan rates are negative and by a substantial amount, so everyone with a mortgage is actually being heavily sheltered, even those who are on SVR. If there was ever a time for borrowers to open their eyes and review their options, this is an opportunity to do everything possible to ensure they have a sustainable future financially. Faux sympathy for short term pressures is never quite as benevolent as it may appear, and completely useless but for self indulgence and self validation.

@maryso Ok.... so I respond to highlight where you've proven my point, then I respond to prove where other people have proven my point and so your response is that my point isn't valid because no one cares what I think and I'm only thinking about myself anyway.

Are you teenager because that's exactly the kind of increasingly irrelevant and ridiculous line of argument mine come up with. I can practically hear the door slamming 😂

1. There isn`t a housing ladder any more, it was never really a "ladder" anyway, it was a debt Ponzi scheme, and definitely not designed to benefit ordinary people.

2. Not all private rental is "unsatisfactory", in fact a lot of it is much better than some of the shit people "buy" with multiple decades worth of debt.

If he had any balls at all he would make sellers pay the stamp duty.

Tell that to the people I know whose landlords evict them on a whim. Or hike the rent up because they asked for something to be fixed. Or refuse to let them decorate.

I am all for decent secure private /social rented as a good alternative to the madness of the housing market, but at the moment I don't think we should be gloating at people who scrimped and saved to buy to be able to have more permanency than a 12 month AST.

@SollaSollew I'm talking about how and why prices and interest rates affect actions (the topic of tis thread) and you're talking your feelings about some imagined scenarios (somewhat peripheral to the thread), and now you're fantasising about talking to your child (totally irrelevant to the thread), so it looks like you can't relate to the world apart from your immediate personal circle, which seems to include a lot of slamming doors because you can't connect even to them? I can say that not a single one of my children have slammed a door in conversation, even when they were teenagers, so perhaps review your own conversations?

We sold my grandmas house just under 4 weeks ago for over asking. There were 3 bidders and it went to a cash buyer, so I don't think that prices are falling everywhere.

Getting on the ladder is tough for young people, but ultimately, most of them are set to benefit from high house prices.

Almost 80% of the silent generation, and baby boomers, own a home. These generations are a historical anomaly, as previously, most people would have rented.

What this means is that many younger people are likely to benefit from a large inheritance windfall at some point over the next 10-20 years. Not everyone of course, but probably the majority.

IMO a major contributor of high house prices is inheritance - wealth accumulates as it is passed on over generations. One of the reasons that house prices are out of kilter with wages is that these days, what you inherit is far more important than what you earn, and this is really problematic for society. Particularly for those who inherit little or nothing.

Ok @maryso ignoring the slightly pot/kettle element of the fact that you've not engaged at all with anything I've said other than to question my motives I am genuinely interested in this and you do sound like this is a subject you're passionate about and have have researched widely so my question is....

How does this end for the best for people on regular/average incomes?

I may well be wrong but it looks like what might happen is that:

1. Prices drop but interest rates rise and mortgages are still unaffordable for the majority
2. Prices drop, mortgage rates are high so supply drops because only people in distress sell as long as they can keep servicing their debt. It's shit for a lot of people but the mortgage free and the relatively wealthy are fine.
3. Or the other scenario which I sometimes see mentioned on these threads is there is some nightmare scenario where the whole economy collapses and then (even if a house purchase was a priority for people in that scenario) I can't see how anyone would be able to buy a house unless they were sitting on huge piles of cash.

I actually agree with you that what we really need is a massive increase in house building because limited supply will always play a big
part in maintaining prices. I also think we should have a massive council house building programme so that people have secure homes and having to take on a mortgage shouldn't be the only way to get one.