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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:
noddyholder · 31/03/2008 13:16

Did you all see working lunch today?predicting falls of 25% within 18 months in order to make housing affordable in teh long term

Twinkie1 · 31/03/2008 13:18

Kirsty and Phil do not believe there will be a huge crash and in the UK we have a shortage of housing so I cannot see this happening either!

Tutter · 31/03/2008 13:20

[selfish]

we're renting and out of the market

we may hold back on our plans to buy for just a wee while longer...

noddyholder · 31/03/2008 13:36

There is a shortage of AFFORDABLE housing but there are 40% more properties on the market than this time last year That is almost double so no shortage if they were a decent price.Kirsty and Phil are tv presenters with a vested interest in keeping prices up Without rising prices they have no careers!We are in a decline now

expatinscotland · 31/03/2008 13:37

how are all these folks planning to afford these dream homes, bigger properties, etc.? because if the market crashes, they're going to find it hard to sell their current place.

did they ever look at it like that?

i mean, duh! it's hard to pick up a bargain when you have to offload your old place before you can do so.

unless they've got some other, immense form of cash they can free up in a hurry, if prices downturn, it's going to affect when they can get for selling their own place.

old people are a different scenario entirely because many have liquid assets they can liquidate in a hurry to buy property with cash, but they don't form the bulk of the market.

noddyholder · 31/03/2008 13:43

Why can't people accept that prices can go down by 30% when they have gone up by 300%!I don't get it Even the banks don't want to lend on something that is falling in value

noddyholder · 31/03/2008 13:44

What about just a home and a dream life?Rather than a dream home and no life at all

expatinscotland · 31/03/2008 13:46

i'm still trying to understand the deluded nature of someone who thinks they're going to be abel to snap up a bargain when they have to sell their current home to do it.

erm, do they think somehow they'll be exempt from any downturn in prices and get top whack for their current place so they can buy the home of their dreams?

eh?

i don't get how a person would come to that conclusion.

as i said, i know someone in Cambridgeshire whose had a house on the market for £300,000 for nigh on 8 months now.

got one offer. a very 'insulting' £250,000. cash.

and nothing since. not even a viewing.

wouldn't anyone with a modicum of intelligence start to wonder, 'Hmm, maybe that's because my house is overpriced?'

just me, i guess.

noddyholder · 31/03/2008 13:53

I agree expat.I know someone with a second home that they can't afford and are literally begging peter to pay for every month but they see it as a bit of a status symbol.I tried to persuade them to sell it last year and they did consider it but decided to hang on as long as they could in case things get better!They think if it gets really tough they can sell it !?!?

expatinscotland · 31/03/2008 14:05

second homes tend to be in places of low employment opportunity, too, where a lot of the locals have left or are retired.

making them even more of a niche market buy.

Twitmonster · 31/03/2008 14:08

I've asked this question before I know, ages ago,

would we be safer and/or better off if we sold our house now and rented? Obviously no-one really knows exactly what will happen, but atm we live in a small 3 bed semi, with a biggish ground floor extension, that we can just about fit in. It's ok, but we really could do with a bigger house.
Could this be a viable way of getting what we can now for ours and waiting to see if the house prices really do drop enough to buy bigger?

GryffinGirl · 31/03/2008 14:09

the idea that house prices will stay stable because demand outstrips supply isn't a very srong one.

there was an article in the Sunday Times yesterday which summed it up

hope this link works

It basically says that demand is not economic demand unless it is backed up by having the money to pay for the house, and with the lack of affordable mortgages, higher inflation and rising interest rates we can?t afford to pay for a new house even if prices plummet.

noddyholder · 31/03/2008 14:14

The su[pply and demand argument only holds up if houses are moving and selling at reasonable prices.It doesn't matter how many tehre are if you can't afford it.Selling up now wouldn't get you the best price as the market has been falling for 6 months + but you may get more than you will in 2 years depending on how easy it is to sell.There is an over supply atm as many BTL landlords are offloading biggish houses

vixnpips · 31/03/2008 16:48

Ahh I don't think I personal would actually try and sell at the moment.. but we made our decision 7 months ago and completed the sale very quickly. We had intended that plan B ( the build our own) was actually plan A.. then we thought we might see how the market goes.
All a bit off the subject but if it were me at the moment and I could afford the payment I would not be budging the maket will recover.. always does.
Part of the reason we chose to do this is we have done it before and it has worked for us. Buy lower wait for market to stack up sell and wait for the drop. It's been the equity in the houses at sale at top rate then rent for a while that has allowed us to go from a 2 up 2 down to hoping a 4 bed without being able to increase our salaries that much. It also allows for payments to be kept to a point of comfortable and mortgage term to be decreased. ( we're not talking Huge houses here and only 1 at a time! ).
But I do feel really sorry for those who have bought high and are now facing problems.

BrummieOnTheRun · 31/03/2008 17:11

Selling now and renting for a period works in one scenario: where you have lots of equity in your home but are having trouble keeping up with your day to day living costs.

We sold in January, paying off the mortgage. The interest off the profits from the sale (about 6%) is paying a third of our rent so our cash flow is much better and we've got a cash safety net if anything happens to DH's income.

In the meantime, I don't feel we're losing any ground on the property ladder. If anything, a few months will mean we can buy a bigger place than we could afford in Jan.

noddyholder · 31/03/2008 17:14

I am renting too but the interest on th capital covers it but |I am determined to be mortgage free so am looking for a bargain.You do need a fair bit of equity to make it do able.

Original poster
WideWebWitch · 31/03/2008 19:36

Agree with NH and grfgirl about there needing to be enough cash (and lending) around for people to be able to afford to buy.

I find the whole idea that people think it can't go down bizarre too, why ever can't it? It went up didn't it? ("the value of your investment can go down as well as up, you may lose your home if you don;t keep up repayments" - isn't that how the warning bit goes?)

OP posts:
expatinscotland · 31/03/2008 21:45

Selling and renting for a bit also works if you are downsizing and/or make a huge profit or own the place outright.

eekamoose · 31/03/2008 22:17

I am so dense I'd never even considered that interest on our capital if we decide to sell, rent, then buy, might cover the rent.

Rents are higher than our current mortgage payments but I'd forgotten about the capital sitting in the bank.

How do I work out how much interest we'd earn?

Is it: sale price - mortgage - fees = £xxx. £xxx times ?% divided by 12 = monthly interest?

What % per annum can you expect to earn on a sum over £300,000?

I know this is dumb, can noddy or someone explain?

noddyholder · 31/03/2008 22:44

You would probably clear 1400 after tax on 300k HTH

MissPaulaYates · 31/03/2008 22:45

we did this and the tax really stung the capital

eekamoose · 31/03/2008 22:54

Thanks noddy. Forgotten about the tax!

noddyholder · 31/03/2008 23:01

It is still better than losing a huge chunk of equity.I am doing this atm and it is quite liberating.

BrummieOnTheRun · 01/04/2008 07:18

Agents and vendors who've been sitting on property for over 6 months, and are still refusing to drop their prices, could do with remembering that buying a property is not a necessity.

If it looks like a stupid investment people simply aren't going to do it and they have an alternative...renting.

Renting may become less affordable as BTL investors pull out, but rents are generally capped by affordability levels in a particular geographic area.

It'll be carnage if the much-derided BTL investors pull out in such levels that a scarcity of rental properties hits at the same time.

Twiglett · 01/04/2008 08:15

I'm betting on a 35% reduction over 2 years personally