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

How have you not been banned yet? You’ll slip up on when you do we’ll be ready.

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

Well sure that's easy to say with 20 years worth of equity.

Glad to be a home owner, not living in my parents' spare room and cracking one off while posting in a frenzy on housepricecrash.co.uk

I do think some on here are getting over emotional arguing with DHB. I'm warm in my house and my mortgage is tiny so I'm not bothered about any falls. I can't be evicted on a landlords whim. I will say we are going through a very different time to 2008, the government used low interest rates and QE to give the impression we were more wealthy than we were leading to asset price inflation. The BOE will continue to raise rates to match the FED if we don't our currency tanks, we won't ever have very low interest rates again, the QE experiment is over. The market has almost exploded from all the extra money being printed, I think property will stagnate for a very long time and things like stocks and bonds will become a more profitable investment mechanism.

The property market needs FTB to keep going who are more reliant on credit so won't be able to pay huge asking prices. I don't think property will ever be worthless or totally crash because of supply issues but the era of massive gains is probably over. No need to get angry just invest any spare money you have elsewhere!

Is that what you used to do is it? What drew you to MN?

He recognises himself from the comment

@Fifi00 no room for common sense here! 😆

Is it all women you feel superior to or just mums? There are plenty of sources of reliable and reputable advice out there that don't appear to hate me for my womb.

He's got mummy ishoos. Probably because he still lives with her.

"There are plenty of sources of reliable and reputable advice out there that don't appear to hate me for my womb."

Can you name one?

Thank you for asking. I have worked in business research and online information for over 25 years, so that's a question I relish.

In the course of my work, I might look at industry reports from investment banks, brokerage houses and consulting firm. You could look at specialist market research (taking those authored by vested interests like Knight Frank with a pinch of salt).

You might not have access to those unless you were a paying customer - but the FT or The Economist are pretty reliable. Or maybe trade press like Estates Gazette would probably do (with a pinch of salt).

You could talk to your friends in the industry or anecdotal evidence from friends selling their houses.

You could have a look at how many vacancies there are for property lawyers -that's a pretty good indicator too. (There are still lots of jobs out there).

You could look at transactions levels at the land registry office.

All of which would be more reliable than angry people on the internet

I think response #3 might have been written about me!

Please, please, please? I'd love a bit of validation from a stranger on the internet ... it keeps the dopamine hits coming ... just say you were thinking about me!

On a serious note ... young people and FTBs really do need to see a reduction in house prices relative to earnings, that's for sure. I just don't understand why the other forum is so adamant it has to come about in the form of house price crash. Surely an increase in earnings would be much better for everyone? If those keyboard warriors really cared, they'd be out supporting Mick Lynch on the picket lines and making sure nurses, teachers and rail workers got a 10% pay rise this year and next ... it would have the same effect as a 20% drop in house prices without anyone needing to face repossession.

Of course, what they are really about is wanting others to suffer. They are horrid little misogynistic INCELs who take perverse pleasure in trolling nice people by making abusive, inflammatory posts. Bullies, racists and morons, the lot of them.

I know I’m wasting my time, but I will try again.

@DeadHouseBounce - what is your situation?

Do you own? If so - when did you buy? How much did you pay? What is it “worth” now? Did you have help? Inheritance? Did you save for years?

Or do you rent? If so, how long! Do you plan to rent forever?

I mean, I know these questions are pointless, but I’m just hoping that an honest answer is given (probably in some random style of font).

@DeadHouseBounce are you seriously stating that you think house prices will never rise again? Even in London? I mean, I bloody hope they don't keep rising- I woukd love for my children to afford to buy houses close to us when they are older. Unfortunately, I think they will keep rising, albeit more slowly than they have in recent years.

Agree with this ^

My take on it all is that nobody knows for certain what will happen, everyone's circumstances are different so there is no single 'right' response to what's going on that fits everyone, and there is a lot of unnecessary stirring going on, most of it from a small number of posters who just enjoy worrying people and stirring up trouble for the sake of it.

Deadhousebonce never answers the basic questions 1)'if you know so much, you ought to be rich- are you rich?' and 2) if people had followed your advice over the last few years, would they be better off or worse off now?

Well, no the uncomfortable fact is that if we keep along this path, people will continue to drop out of the system, and services will keep declining. You will have to accept medical care is not that good in this Country and everything is expensive and takes a long time to do.

In other Countries rents are regulated and you don't get amateur landlords so people are happy not to own houses.

The reason we've got these and a crumbling health service is because we've invested in Estate Agents, Landlords, Housebuilders, and not energy infastructure and skilling people to build useful things. People are so obsessed with housing in this Country they've forgotten that we actually need a skilled workforce as a matter of priority over expensive housing.

Actually a lot of people predicted the boom would end up with high inflation and problems with services in this Country.

I don't really care about what people post here, I care that the Country is in trouble. Do you?

You're just upset that you've been ended.

What’s you point OP? Your post doesn’t actually make one. It’s just a Q&A.

Well put. A general lack of understanding about the economy leads people to spout a lot of rubbish. And one of the main ones is to talk about the housing market.

House price drop usually happens at a time of recession. That doesn’t mean that the those who have been waiting to buy for a long time can then rush out pick up a bargain. Because they are then worrying about employment rather than home ownership.

tbf though, ever increasing house prices don't help FTBs either.

hopefully prices will stagnate for a long time & wages will eventually catch up so we have more productivity. Better for the economy overall.