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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:
southutsire · 01/04/2008 10:25

Here goes London

I'm sure rents are rising in a lot of areas, but if you're a no-hassle tenant who wants to stay put for a while, landlords will be reluctant to raise the rent in case they lose you. I know ours is . He's been in the property business for over 20 years, has a large number of houses, saw out the last recession and has had plenty of awful tenants so knows our value.

Anyone who tells me renting is always throwing money away gets told that our rent is 1/3 of the mortgage we'd have if we bought the place we're living in (which we couldn't afford to, by a long way), meaning we've been able to save pretty aggressively over the past few years. One of dh's work colleagues has an interest-only mortgage on a similar house a few streets away and is paying out monthly more than we are. Tis cheaper to rent privately than rent your house from the bank, IMO.

BrummieOnTheRun · 01/04/2008 10:32

we're also renting a house we couldn't afford to buy, and rents seem to be dropping because families have put houses they couldn't sell onto the rental market.

Original poster
WideWebWitch · 01/04/2008 19:32

Yes Southutsire, I bought The Standard today on the strength of that headline!

Agree, if we bought the house we live in now, at current prices, it would cost us about £1500 a month. We pay considerably less than that to rent it.

OP posts:
MissPaulaYates · 01/04/2008 20:45

i think you are all being driven by the hyped up media

these reductions have not happened round here - even at that horrid time in the 80's the market was slow but prices just levelled off

If it were really true then interest rates whould not soar

it cannot go both ways HUGE reduction in house prices and HUGE hike in interest rates - no logic

NomDePlume · 01/04/2008 20:47

I think a lot of the renters are holding onto false hopes in most cases.

SenoraPostrophe · 01/04/2008 20:49

brummieontherun: "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. "

I very much doubt that. because many people who are currently renting are only doing so because they can't affrord to buy. If the BTLs all pull out, it'll mean selling at a knock down price. and some tenants will become owners. or more likely, the current crop of get-rich-quick BTL landlords will be replaced by longer term, mnore thoughtful investors (who also buy at a knock down price)

Oliveoil · 01/04/2008 21:00

well according to that site, property in my area is reduced by an average of 1%-2%, so not huge drops

and they are not nice houses like mine!

southutsire · 01/04/2008 21:38

I think a lot of sellers are holding onto false hopes, NomDeP!

beautifuldays · 01/04/2008 21:55

i have just started working in an estate agents and prices are stagnant/falling marginally at the moment, and everyone i know in the business thinks house prices will fall in the next 2 years, although not as drastically as they did in the early 90's.

the problem at the moment is that vendors do not want to admit that their house isn't worth as much as they think it should be, and if they bought in the last 2 years that their house is worth no more than they paid for it.

because we have had 15 years or so of incredible growth people are used to their house steadily increasing in value, and that just aint happenning any more, but people just don't want to admit/recognise that fact

we deal mainly with the top end of the market which is not struggling as much as the bottom end. but i was chatting to an estate agent today and the bottom end of the market that is very mortgage dependant is really struggling at the moment. not only because no-one can get a mortgage, but also because vendors do not want to reduce their prices.

and despite working in an estate agents i hope prices do fall in the next few years, cos at the moment i can't afford to buy a shoe-box let alone a house!

blueshoes · 01/04/2008 22:36

expat: "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?"

It works if you are upgrading.

We have to sell to buy. But I am very keen for the market to fall as sharply as possible. Our next house up will cost a lot more than our current one. So if our house is say worth £500K and the house we want to buy is worth £1m, a 20% fall means our house is worth 400K but our next house will only cost £800K - a £100K 'saving' for us due to the fall.

Of course, having lots of equity in our current house helps.

noddyholder · 01/04/2008 22:40

Paula I think there will be both reductions and interest rate increases as the banks need to make money without lending foolishly like they ahve been They are not taking on new business unless very safe and so prices will fall I have offered lowish on a few properties and been turned down but agents always come back later.That I don't get at all

vixnpips · 02/04/2008 10:19

blueshoes I agree that it is the equity you already have that is key here, It is a gamble to sell when you think it's near the top and then rent and wait. For us we have been lucky enough to have bought our first house in an up and coming area in the mid 90's. Then selling at what we thought was top, Moving to another up and coming area to a bigger house and with the equity managed to keep the same value mortgage we had in the first place. Having sold again and now renting it means that we are sitting on enough equity to either build or buy and so are just waiting, looking and seeing how things go. We then also have the interest on the money we have made. It is quite a stressful thing to do, doing the places up, moving areas ( with kids) and trying to play the market a little with also not stretching ourselves to a property that could cost a fortune, but playing "safe" and being comfortable.
But if it wasn't for the dropped prices in the 90's, we would never have afforded to have had this opportunity in the first place.

noddyholder · 02/04/2008 10:44

vixn you sound like us Exactly the same scenario and are now in rented and waiting.May buy later this year if we can get a bargain I want a home now for us not designed to sell

vixnpips · 02/04/2008 11:00

Snap Noddyh and I'll be very happy to make this the last move as well!

noddyholder · 02/04/2008 11:18

I swing from never doing another refurb again when I'm knackered to pass me the sledgehammer on a good day!

vixnpips · 02/04/2008 11:27

LOL NH i'm like that! I wonder if I'll ever actually stop

Hoonette · 02/04/2008 11:31

We want to sell, buy some land, and build a house.
So, a question for all the estate agents out there: what do you think will happen to land prices?

sparkleymummy · 02/04/2008 11:57

Help me out here. How is it risky to sell now and go into rented?

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