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Original poster

Hey Doomsayers, over here! House prices likely to fall by a quarter in two years...and the rest imo

118 replies

WideWebWitch · 30/03/2008 21:15

prices could go down by 25% and the rest imo.

And for anyone who hasn't seen it before, propertysnake showing some 40%+ reductions

OP posts:
expatinscotland · 30/03/2008 22:04

As long as you're locked into your interest rate for a wee while you should be fine, Paula.

Not planning to move, are you?

eekamoose · 30/03/2008 22:05

NorthernL - we have just had to re-mortgage as our fixed rate was coming to an end. So we rang our current lender and they sent us 6 different options in the post. We mulled them over for a few days, decided on the one that suited us best, rang back - and, the rates had gone up!!!! In the end we settled for 5 years fixed at 5.63% but that was the very best we could find, and it came from our current lenders (Nationwide) and thank goodness I rang them to agree on Monday this week because by Tuesday they'd put them up again!

Mortgage rates just going up and up atm, regardless of what Bank of England base rate does.

NorthernLurker · 30/03/2008 22:06
noddyholder · 30/03/2008 22:06

Paula don't move and overpay if you can!!6x salary should be illegal but that is only my opinion and I understand that silly prices and loose lending have caused people to take out these huge loans

PaulaYatesBiggestFan · 30/03/2008 22:08

fix is till next feb - wish we could over pay but we cannot....

housing market slower here but not really lowering prices YET

critterjitter · 30/03/2008 22:09

I had to sell my house at the top of the market last year (matrimonial). Bitterly regret it, and think about it every day. DD mentions it everyday and sometimes cries about it.

My mum has kindly offered to invest some money in another house for DD and me as we wouldn't be able to afford one without this investment in our area, but she keeps pointing out that people's circumstances change and that perhaps the people who bought my old house will decide/need to move.

Just wandering if there would be any mileage in approaching them (perhaps on another matter) and seeing how the land lies. If I had bought a house at the top of the market and were now watching the credit crunch take hold, I might be wanting to jump ship. I know they had a Nationwide mortgage as well....

I'm looking at another house in that area tomorrow, but in my heart I want our old house back.

expatinscotland · 30/03/2008 22:09

don't lenders here offer fixed rates for longer than 5 years?

that sounds really risky.

nkf · 30/03/2008 22:10

If banks are going to going to make it harder for people to get loans, the only way they can keep their shareholders happy is to charge their customers more.

soapbox · 30/03/2008 22:12

Didn't realise there was another thread - have just posted this on the other one!

TBH I'm not sure if it will be such a great thing for FTBs.

I think for most FTBs the increase in size of the deposit required and lower multiples of earnings will more than offset the down shift in prices - making it just as out of reach for most of them as it has been up until now.

I think that a lot of landlords who were wise enough to sell off their portfolios will hoover up the available properties if prices fall by more than 10-15%. Also those who have plenty savings or first mortgages paid off will find it an attractive time to buy their second homes for holiday or investment purposes.

nkf · 30/03/2008 22:13

A 10 - 15% drop isn't much on some of the prices we've been seeing.

expatinscotland · 30/03/2008 22:14

Spot on in every point, soapy.

nkf · 30/03/2008 22:15

What kind of deposits are first time buyers having to find?

noddyholder · 30/03/2008 22:17

It will be down 10-15% by xmas and more next year.This will be a sharp correction not a levelling out which was the original view of economists last year. FTBers will be able to buy if prices reach 3-4 times salary.

noddyholder · 30/03/2008 22:20

I agree to a point soapbox but I do think we are getting close to heavily taxing second homes I think it is one of Browns wishes

soapbox · 30/03/2008 22:20

nkf - it is edging back towards 10-20%, rather than the 105% mortgages that we have seen recently. Multiples are heading back to 3-4 rather than 5-6 times earnings.

critterjitter · 30/03/2008 22:20

I had to sell my house at the top of the market last year (matrimonial). Bitterly regret it, and think about it every day. DD mentions it everyday and sometimes cries about it.

My mum has kindly offered to invest some money in another house for DD and me as we wouldn't be able to afford one without this investment in our area, but she keeps pointing out that people's circumstances change and that perhaps the people who bought my old house will decide/need to move.

Just wandering if there would be any mileage in approaching them (perhaps on another matter) and seeing how the land lies. If I had bought a house at the top of the market and were now watching the credit crunch take hold, I might be wanting to jump ship. I know they had a Nationwide mortgage as well....

I'm looking at another house in that area tomorrow, but in my heart I want our old house back.

What do you reckon? Should I try and approach them?

expatinscotland · 30/03/2008 22:22

Brown will not make any serious move that has even remote potential to destablise the
house of cards market his policies helped create.

nkf · 30/03/2008 22:22

CJ, why not? It won't hurt to ask. But if they say no, then do try to find a way to let it go. Not easy I know but better for you.

soapbox · 30/03/2008 22:23

I don't think we will see too much of a move to heavy taxation for investment purposes (which include holiday homes for letting and residential letting). The economy depends too heavily on private landlords for it to be otherwise, imo. And many rural areas now rely on tourism for jobs to tax holiday lettings.

I think there may be an increase in council taxes for second home owners (who use if for own use only) but beyond that the potential downside would be too high!

soapbox · 30/03/2008 22:25

CJ - I think the attachment to the old house is probably because that's where memories of being a family with your ex are. I think emotionally it would be far better for you and DD to find somewhere new (but equally lovely) to make your new memories in

nkf · 30/03/2008 22:26

Buy to let mortgages will become more expensive and many new landlords won't be making much money on their property at the moment.

soapbox · 30/03/2008 22:27

Rental prices will increase though as there are less private landlords in the game - such are the laws of supply and demand!

We're all screwed I tell you

nkf · 30/03/2008 22:28

I can't help thinking it has to be better overall if mortgages aren't on average six times people's salaries.

critterjitter · 30/03/2008 22:29

Thanks CJ. Needed to contact them anyway, as ex was the last one to leave the house and he left something of mine there (he promised to unfix it from the wall), but didn't tell me that he hadn't, until recently when I asked him for it. Am going to approach them nicely and see if they still have it (bet they haven't!) and then see where it goes from there.

soapbox · 30/03/2008 22:33

NKF - yes that is true - but if interest rates increase (as I fear they will) then the affordability of mortgage payments will be no better.

It takes an increase of only 0.5% (very approximately) to offset a 10% decrease in prices, in terms of actual cash flows!

[Although that assumes a 10% increase in interest rates offsets a 10% decrease in prices which is only true if you have a 100% mortgage on interest only]