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

@SollaSollew if you need validation for your handwringing then most people will not indulge you, and even if we agree on financial pressures, they exist because of misjudged state intervention between 2008 and 2022, not the market correction happening now. You characteristically mistake having views for passion, when actually I'm personally disinterested because I don't need to buy or sell property, though I recognise that communities especially in cities are increasingly transient due to global speculation. That's unfortunately the case globally, too.

As for your scenarios, difficulties always arise when people of any income level cannot afford their preferences. Your fundamental error is to start from the requirement of property ownership. If you want to own something you have to pay for it. If you can't afford to pay for it, you can't own it. Low prices widen ownership, that is the only route to your fervent wish of affordability. Our current situation of price adjustment is certainly no worse than the price adjustment due to market intervention over the last 14 years.

You conscientiously ignore the fact that mortgage interest rates at 6% (let alone fixed deals at 2-3%) remain substantially negative, and if that affects affordability then the issue and only issue is bloated prices. I'm told by property analysts (not estate agents) that house prices should have dropped at least 20% already if not for stagnation and negative rates. As for your simplistic social housing scenario, you don't seem to realise that we're competing globally for city homes, so demand will always be high. Nobody is entitled to property ownership, it is for those who wish to buy and can afford to. There is also little awareness or at least acknowledgement that we do not build as well or as quickly or as cheaply, because developers are not under the pressure they should be, hence land banking and the resulting stagnation is their preferred option.

He won't because it would hurt the rich people who have money invested in property and rich people only like other rich people

Ok @maryso I'm done. You've ascribed a starting position and motivations that aren't mine to build a straw man argument that allows you to repeat your own points and rudely criticise me. Proving my point again for me.

@SollaSollew @SweetSakura You say you feel compassion with those who bought a property and who may now be unable to service their mortgage. I do too, but there is of course another side to this that we must not forget.

Have you considered that these debtors might have actively contributed to rising property prices over the past decade? They have taken an adult decision to take on the debt, no-one forced them to buy at those out of proportion prices.

What about those people who refused to feed the heated market of the past decade? Who weren't prepared to pay through the nose, they are now 'priced out' because they refused to settle and get lumbered with a crappy, overpriced property.

It is easy to feel compassion from a cushy, beyond comfortable vantage point like yours seems to be, as you seem to have 'profited' from the house price inflation of the past years.

I congratulate you for having a golden nest egg now, I really am happy for anyone who prospers and probably worked very hard for it.

But please don't claim the moral high ground and shame others who might welcome the latest market developments.

How exactly does one "refuse to feed the heated market"?
Most people have 2 choices, buy or rent.
So you can pay over the odds for your house, or you can pay over the odds for your landlords house. Either way you're "feeding the market". It's by design and not the fault of homebuyers.

House prices just went nuts the last couple of years. I found by the time we found something to move to everything had increased in value including ours so then you are always trying to play catch up to make up the surplus. Will be happy with a period of stagnation.

I think most people rent smaller than they buy. Like they may rent a 1 bed flat but buy a 3 bed house. I think it's rare that rental for a 1 bed flat would be more than that of a 3 bed house unless you are massively shifting area.. I think a lot of people have been tempted to buy the biggest home and stretch to their limits because they thought they might get priced out if they didn't. Hence why 3 bed houses in good catchments are very overpriced and often sell over asking price.

I literally spend my life working to deliver affordable housing solutions for people both at work and in my free time as a charity trustee of a housing charity. I'm not sitting from some smug vantage point. I just know how bleak it is for many private renters and don't think we should celebrate people facing negative equity at a time of soaring interest rates and job losses. Most weren't being greedy they just wanted a secure home. Investor landlords on the other hand I have very little sympathy for, they did feed the frenzy and make it harder for people toget their own home.

Doesn't mean I don't think the whole housing market is grossly overinflated and awful. Just that we need to recognise that those who will be impacted the hardest are people who aren't very apart from those who hadn't been able to buy.

@SweetSakura the single thing that will deliver more affordable housing is falling land prices. As a trustee myself I've been hearing for over two decades how affordable housing can be built relatively cheaply, however the land banks and resultant propped-up prices are the main stumbling block to delivery. Rather than shifting the deckchairs around, which is necessary and often done with much skill and goodwill, putting heavy financial pressure on land banking and grabbing the opportunity to deliver new housing when prices are low is the solution affordable housing directors have always wanted.

Oh I don't disagree @maryso however, it doesn't mean we shouldn't feel compassion for those who could be severely impacted even as we realise the benefits it will bring elsewhere.

The only people I feel a bit of compassion for is those who bought in the last few years on small deposits. My house has gained large equity in the madness of the last 2 years. I've done sod all for that it's a home not a money making machine yet people feel entitled to make hundreds of thousands just by virtue of sitting in their house pushing home ownership out of reach for others. I honestly I don't care if my house drops in fake value it makes it easier to move. The last 2 years have been a joke rubbish houses going for bidding wars. A bit of sense and calm returning to the market is best.

Agreed @Peedoffo , that's who I am referring to. Like you I don't care if I "lose" the equity gained in recent years because it was all just madness and unfair. But I do feel bad for those who have scraped their way to buying a property in recent years and will be most vulnerable now. They are victims of the house price insanity as much as anyone

We postponed moving in the autumn because it was obvious this was coming and we will wait it out. I don't aim to make money on the move, just a sideways step.
I'd be delighted if prices fell because it can only benefit those first time buyers who need all the help they can get.

So you are buying something for the same price or a bit more expensive?

@socialmedia23 yes, a similar price or more expensive. We are moving to a location more suitable for old age, not the remote village we're in.

I’m seeing more re-listings from the summer, now on with different agents so ‘new to the market’.
Only one guy has dropped 10% though, 425 to 380.
The others are similar prices to previous asking. 625 to 600 etc.

Will be keeping an eye on this thread as we are thinking of moving.

i am pregnant and really we need to upsize. We currently have a 250k mortgage and approx 300k equity. Will be looking to double our mortgage to approx 500k.

This will be our forever home so thinking as long as we can survive the interest rate rollercoaster it should be ok.

Good luck with your pregnancy.

Please don't look to double your mortgage. That's playing the same game that got us here in the first place.

Just look for a house that is just large enough, in the best location for you, at the cheapest possible price.

How do you think itll help first time buyers ? Interest rates mean they fail the affordability test and if property values drop the banks want higher deposits to mitigate the risks.

That’s exactly what they are doing no doubt and itll mean doubling their mortgage 🙄

It's not just first time buyers though, having been through a divorce recently, trying to find a place to accommodate three children, even though being in late 40s with a single income, is proving tough. I welcome house prices coming down, even if the interest rate is a bit higher and closer to the norm of the last 200 years at around 5 or 6 percent.

I'm in the same position @RollerCoaster2020 - had to downsize from a 4 bed house to 3-bed flat post-separation.

With house prices rising so quickly & in my 50's, being able to afford a house was an impossibility.

There might be a chance soon. I bought a "fixer upper" 18 months ago so hopefully won't lose too much on it, or break even.

"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."

The rent will get cheaper in a recession though, and if you keep your job you will be better off renting, the mortgage debt will stay the same or likely get more expensive, you timing wasn`t good unfortunately.

@DeadHouseBounce rents aren’t going down anytime soon although there will be a ceiling.

the poster will probably be paying off capital. And with inflation a mortgage debt actually goes down in real terms so that will in some way offset the interest rate increase.

very likely to still be better to have bought or at the very least neutral

nor even taking into account higher affordability tests now

Legally much much harder to evict people on "a whim" than it used to be, especially if kids involved, and you see for example the Scottish government taking a hand in banning rent rises, hardly Rising Damp is it? Many people who took on a bubble,price mortgage so they "could decorate and change the curtains" will be feeling pretty daft about now. I think a lot of the mis-information about private renting comes from the mortgage "industry" certainly, but also from people with eye watering mortgages trying to justify their bad decision making by saying how bad renting is supposed to be.