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

Rock and hard place, exactly.

Pretty silly statement, almost as silly as Property Always Goes UP, LOL.

How ironic when I’m seen you many times on Mumsnet doing exactly that.

How exactly am I wrong though?

I think this will be a classic boom and bust. The boom was abnormal , the economy wasn't performing well yet prices went up massively. I wouldn't be surprised if prices went back down to 2020 levels followed by stagnation and good. Joining the market is a gamble , unfortunately the government don't have the funds to bail everyone out QE isn't an option or low interest rates. The market needs to return to calm after this. It wasn't normal people having bidding wars on typically undesirable houses. Many people had FOMO and the government's stamp duty holiday pushed up prices further.

It's a shame for recent joiners but hopefully they have fixed for 5 years when they purchased.

Adhering to the law about how a tenancy is transferred to another entity doesn`t get you banned from renting in future, the amount of nonsense on here about renting just indicates a lot of posters being well into debt problems on their mortgage and trying to make their situation look better than the alternative, ridiculous really.

@DeadHouseBounce do you own or rent?

No it doesn't get you banned, but good luck getting another landlord to take you on after being evicted by the courts.

Also, the massive crash hasn't actually happened yet. So maybe save all the self righteous I told you sos for if/when it does happen.

'Stuck between a rock and a hard place.'
This is exactly the problem and I totally understand why people have taken the plunge despite the fact that it was pretty obvious that house prices were going to fall. Renting is often a negative experience in the UK and sometimes truly terrible. It is insecure and far too expensive relative to incomes although I believe renting is now, on average cheaper than buying due to the rise in interest rates. I think that rents will come down as people simply won't be able to afford them.

2020 levels? LOL, there was massive money printing going on and near zero rates in 2020, we are going back to the equivalent year for wherever interest rates end up IMO.

I disagree that house prices always go up (at least no in excess of inflation). This is a recent phenomenon caused by cheap credit. That trend has now stopped.

Why would you be evicted by the courts if your tenancy passes to someone`s estate, or to a repossessing bank/lender? You would stay on or be given notice in the usual manner, stop trying to pretend that there are no legal safeguards in place for tenants to justify people getting themselves into a mess with bubble mortgage debt.

That's fine the crash is going to be worse than 2008 because there will be no artificial low interest rates Honestly I don't care I own my house outright. I wanted to upsize in 2020 but my gut said it wasn't the right time. My yearly household income is the same as how much my house cost to buy in 2016. So we are living below our means it's worked and we are in a very good position. Part of me did get FOMO but I held firm , I feel for those who purchased at the top of the market. It's a gamble.

@rainingsnoring bit even if they only go up in line with inflation the mortgage debt will be going down relative to inflation.

If they want to sell or increase the rent beyond what you can afford. If you really can't imagine a scenario where a tenancy is insecure then you're being deliberately ignorant.

DHB seems strangely reluctant to answer that question.

As interest rates increase (and I think they have quite a bit further to go), monthly payments increase. I'm not quite sure what you mean by debt going down relative to inflation. Presumably, you are talking about current home owners? It would surely depend on whether their take home wage rises in line with or higher than inflation. At present, wage inflation is considerably below CPI inflation which under measures inflation anyway.

@rainingsnoring i mean that in the long term the mortgage will not increase with inflation but the value of the house/wages will

so even if house prices don’t increase in real terms it is still - it the long term - a sold way to build wealth. Obviously there are exceptions according to individual circumstances. But the point is that house prices don’t need to go up in real terms for it to be a very good - and safe - investment.

Probably a landlord

@Kabalagala no I think he’s been waiting for the crash to buy for 20 years.

and still waiting…

Why would that be the case? If house prices increase with inflation (which they may or may not after the current fall), monthly mortgage costs will also rise. Interest rates are also rising and unlikely to go to zero/ negative again so, again, the monthly costs are higher. There is no rule that says that wages increase with inflation. They are not doing so currently and they have fallen and stagnated for huge groups of people since the GFC. I think there will be less very good investments going forward in general.

Inflation and interest rises mean that the cost of house building will go up considerably. (More expensive to pay for labour, raw materials, borrowing to finance developments). Between this and homeowners just not moving i expect we will see a bit of a drop, a stagnation, and then a recovery. So still think buying likely to be better than renting and recent buyers will be ok if they just hang on in there.

@rainingsnoring bottom line if you borrow £200k for a house now in 30 years time the house will be worth a lot more and the £200k (even if you make no payments at off the capital) will be worth a lot less.

im talking about the basic mortgage debt - not the payments/interest rate on the debt. Of course that is going up - but so are rents so that comparison is relevant

bottom line - over the long term - borrowing money to buy a house is usually a sound and low risk investment

'bottom line if you borrow £200k for a house now in 30 years time the house will be worth a lot more and the £200k (even if you make no payments at off the capital) will be worth a lot less.'

This may be the case but, if you sell your house in the above scenario, it won't buy anything bigger or better so it's not a successful investment. It's still a home which is what it should be.