Are MN homeowners as deluded as HPCers?

[Cybercynic]

Last few days there has been spike in the number of posts on potential house price declines. In the UK prices have already dipped more than 3% since August. I find it amusing that many HPCers are frequenting MN to report such news and potentially express glee on those that have bought.

However, even more amusing is the response of home owners suggesting how prickly they are to the remote possibility of house price declines. (PS: I am a homeowner and bought 20 years ago. While I have made equity gains over the years, I support overall declines in prices otherwise I feel my kids will be forever renting in this country).

While I hold no brief for doomsayers and think most of those are crazies, I believe the homeowners on this forum are turning increasingly prickly at facts and they offer the following standard responses to prospect of price reductions:

Response#1: House is not an investment it is a home. OR if you buy for long term you will always be okay

Counter: Ok then stop worrying about what doomsayers say. Let the prices decline by 10-25% and be okay with it.

Response#2: UK prices will never go down because it is an island and we just 'love' immigration

Counter: Please check out what is happening in Australia and New Zealand. Both factors apply there and they already have >10% yearly declines so far and more is expected

Response#3: If prices decline I will simply refuse to sell. Nobody can force me to sell.

Counter: Yes, you don’t need to sell because you can refuse to participate in the market. However, that does not stop price decline just as prices went up even when you refused to sell your own property in a rising market. House prices are determined at margins. Valuations are based on comparable transactions (whether you sell or nor). Unless there is a sellers strike announced similar to the train strike next week, not sure how this argument stands.

Response#4: There wont be any re-possessions

Counter: Agreed there will be few repossessions. It takes a long time to repossess and therefore, Banks will work with borrowers to find ways to make sure homes are not taken away. But one does not need forced sales to price declines. Australia, Canada, New Zealand, Sweden have all seen declines in the last 1 year without repossessions. And as I said earlier, UK has had declines >3% since Aug. And we are not even in recession yet officially. House prices are a function of affordability and I for one do think that era of <1% interest rate is over and average will hover around 4-5% for some time and with those rates you cannot have rapid growth.

Response#5: If one hopes for price reductions throughout, one must be a horrible person 'cause some people will feel pain

Counter: HPI has caused more pain to generations. And therefore, please explain a situation when we can have affordable housing without price declines. Affordability either comes with consistent wage growth and that aint happening without rampant inflation and resulting interest rate increases. So please let us know what advise they have for the younger generation to become home owners and who want affordable housing. And please do not suggest council housing since you will need to first check the govt finances to make that suggestion

@JesusInTheCabbageVan - you’re welcome 🤣

The boom was fecking ridiculous, people were overbidding for some really poor properties. I hope there's not many regretting their purchases. My previous back water town in the north west had every property as offers over. I'm happy things are going back to normal. When there's a massive boom there's normally a bust it happened in 2007/08.

It was crazy, properties in my locality have increased by an average of over 40% just in the last few years. Insane

But it’s not a bust if all they do is return back to pre-2020 levels typically most houses should increase by about 5% per year if they jump up 20% in one year and then don’t jump up for four years. There’s been no bust. A 15% drop on last years Numbers is literally just keep in the growth at the same level.

There will be a massive stagnation in my area. I bought my house in 2016 for 1.5k more than the sold price in 2007. 9 years! It depends on the area.

Stagnation really isn’t a problem really just allows wages to catch up if there’s a lag. For us in recent years wages have been going up faster than house prices so there’s no losers in that scenario.

Well, I don't know. In my area, houses are still selling at over a quarter of a million for a basic one bath three bed. Insane.

Interest goes up, incomes stagnate, house prices fall. Incomes rise again and house prices increase. It's the cycle.

I'd like to think that longer term house prices won't be so many multiples of people's incomes, but given the inequality in the UK I won't hold my breath.

£250k that's a bargain in our village in Wales. A

www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E824&maxBedrooms=3&minBedrooms=3&maxPrice=250000&radius=5.0&propertyTypes=detached%2Csemi-detached%2Cterraced&includeSSTC=true&mustHave=&dontShow=&furnishTypes=&keywords=

You are seriously in denial if you think the interest rate moves we are seeing will end like that.

Hear ye hear ye, DHB has spoken! Sit tight everyone, then when house prices rise again, sell up and move into a private rental. Your life will be waaaaay better

Aye, im delusional and every year 10% closer to a mortgage free life. Its awful 😢

There's a lot going on in your head, OP.

"But it’s not a bust if all they do is return back to pre-2020 levels typically most houses should increase by about 5% per year if they jump up 20% in one year and then don’t jump up for four years. There’s been no bust."

LOL. Yes, you are delusional, and your personal mortgage status has no bearing on the wider effects of interest rates on the property market. If you stand on one leg and go "Tra La La" with your hands over your ears and wear a furry jumper when your neighbour tells you houses always go up is it still not a bust? - No, Im afraid it is still a bust, the property bubble cant cope with higher rates.

You couldn`t do any more mental gymnastics to avoid the obvious if you tried.

They won`t be rising again 😂

House prices won't be rising again! Fact. You heard it here first!

House prices will never rise ever again? I've heard it all now.

I get the impression that part of the agenda with the house price obsessives on Mumsnet is to generate negative market sentiment. They might be right, they might be wrong but they certainly have an agenda of market manipulation. So I'll be taking my advice elsewhere and think others should do the same.

Having any sort of agenda is a total waste of time! I could wish as much as I want for house prices to continue to rise at an astronomical rate or for them to continue to drop, but nothing is going to happen as a result of my wishes!

Unfortunately what I have seen happen in 2008 with my own eyes was a poster from Mumsnet, go onto house price crash. Ask for advice and be told just get rid of the house which they did and of course then who purchaser gave it a lick of paint and sold it six months later for 65 grand more.

I guess the hope is they can do that enough times to have an affect

That's awful but surely anyone going on the housepricecrash website can see it's a crock of absolute shite?

Where will you be getting your advice, Kursty and Phil?

It was bloody tragic they came on mumsnet with all the links to the posts, DHB’s wet dream.

I wont sit back and let them do it again

Quick quiz question for you; What do you think has more effect on house prices a) A poster on the internet or b) The fastest interest rate rises for 30 years?

Take as long as you want.

"I wont sit back and let them do it again"

Are you going to cut interest rates to zero and restart QE?

LOL.