Do you think house prices will return to 2004 levels? Or, what percentage drops are you predicting?

[WideWebWitch]

What appears to be the house of our dreams is in the paper this week and we could afford it if we got the price down by 30%.

I know I've been banging on about expecting 30% drops by 2009 but if were to offer 30% under asking that would be what it was worth in 2004 (and current owners paid for it) according to Zoopla.

So, 30%, realistic or in my dreams?

[WideWebWitch]

We have looked at it on google earth satelite pictures and it's not detached as we first thought so not sure if it IS the house of our dreams but thanks for all these views. If FIL gives us some cash and we got 30% off then we would be buying with a 30% deposit and a mortgage of 3 x joint salaries, which is do able.

[ListersSister]

I find it hard to believe prices could fall by 50%, because people have bought houses at silly prices and can't afford to let them go for so much less. Aasuming they can pay the repayments (which are ok at the mo as interest rates seem to be stablising), people are likely to stay put.

However, as Noddy says, if lending remains tight (or, in fact, what is realistic and what it was for years untol the last 5 years or so), then people won't be able to buy. I gues that means that the market will stagnate, with only those having to sell and move doing so.

I would love to see a 50% drop - we have a small mortgage and thus a good level of equity - as it means that the kind of house we want might get within reach. However, I am not holding my breath!

Noddy - I just had a look at rightmove (I am trying to wean myself off lol!), and think the house you offered on a while ago is back on the market? No mention of needing structural work though ).

[edam]

Ooh www, that sounds exciting! Same it's not detached though.

(I CAN come out and play on Fri, btw, hurrah!)

[KatieDD]

Lister - some people have bought at silly prices and they only need one of them to lose their jobs and they will loose the house, I doubt anyone voluntarily take a 50% but a lot people won't have any choice.

[Upwind]

Lister, most people have not bought houses at silly prices, and of those who have, many will have had a huge amount of equity from sale of their previous property.

It really doesn't matter if people don't want to sell for less than they paid, some of them won't have a choice (debt, divorce, death). And they will be competing with those who bought back wen the markets were fairer.

[noddyholder]

It is not a matter of taking a 50% cut on what it is worth as a house is only worth what someone will pay and what the bank will lend.The prices of houses will be determined by the mortgage availability and the economy and no matter what you paid or what you owe in the end the owner has no control over the 'value' esp if they need to sell.
Lister that house is a wreck it will never sell.I have emailed maslen to see if teh owner wants teh survey we had.It was originally with the preston pk branch of the halifax but tehy have closed this week.

[twinsetandpearls]

I would love a 30% drop so we could buy the house we are renting.

[ListersSister]

Yes, of course, some people will have to sell, but I did say that "assuming they can pay the repayments" people will stay put. Obviously if recession does hit big time (which is looking more likely) then redundancy will force many a sale. I am still not sure that it wil be a 50% drop though, as the market will not only be made up of those with forced sales, and people have got a lot of adjusting to do to realise that their house could actually be 'worth' less than they paid for it.

I do think 30% from last year is realistic though, with it taking till next summer to get to that point, as many people still think that their area won't be affected as badly as everywhere else . There is a big £££ difference between 30% and 50% in my area too .

Upwind - I have to say that in Bton, the market has been very hot over the last few years. Lots and lots of proerty has changed hands, and for lots of silly money.

Lister - very kind of you to offer the survey to the seller. Do you think they are unaware of the issues with the house then? Or are they pretending they don't know? I didn't realise another agents had gone either. It's about one a fortnight at the mo, isn't it?

[noddyholder]

I had a full engineers report as i really liked the house and wanted it.The works it needs are MAJOR!The previous owners amongst other things concreted over the drains so all the damp and movemnet could be down to that but no way of knowing without bull dozing the garden!

[ForeverOptimistic]

We are already close to 2004 prices. At the height of the property boom our house was worth about £300k now a similar house is on the market for £225k, based on 2004 prices it would be worth £200k which I think is about right for a 2 up 2 down.

[noddyholder]

I have just had an offer accepted.Don't want to discuss it too much as hope it goes through.Survey wednesday am and 2 week exchange!I managed to get it at 29% off its sale price of 300.Agent says would have been 330 ish last summer so overall big drop esp in teh area concerned

[1dilemma]

30% drop in 18 months is huge though

and of course once people see that kind of drop who is going to buy?

thus those who have to sell see even more drops.

on EA here was advertising all the price drops on their rental properties last week...

EA have more and more properties for sale or to let, wiht the rental prices being approx 1/2 the mortgage payment

[noddyholder]

Brighton rentaql market is flooded People seem to think if there are no buyers people will rent which is true but they also have a lot of choice and can haggle prices.A large number of properties are to let and for sale.I would have waited longer tbh but we are paying a lot to rent and just want to be settled.If you pay more than 75% now you are over paying

[ListersSister]

Noddy - won't mention it till you do .

Very best of luck though.

Do you know what happened to that house close to me that the buyer was trying to sell via gumtree?

Oh, and I agree with you re the rental market in Bton - the property pages would only be about two sheets without it! It used to be the other way round, and when we rented out our flat, we never got as far as advertising, as there was a waiting list for people wanting to rent flats in the area . I suspect that a lot of landlords in Brightn are experiencing periods where their properties are unlet, which assuming they are in good nick, will be something of a new experience.

I still need prices to fall a LOT though , or get a win on the premium bonds

[wombleprincess]

I personally think it is unrealistic to expect someone to sell a house for less than they paid for it - they would be losing money. unless they were absolutely desperate for the money, or the banks/debts were forclosing on them - in which case they would be wanting to get shot of it so would have started at a lower price in anycase.

one other point. if its your dream house, then its probably very nice so other people would be thinking the same? being a property porn addict nice houses in good areas are still going for good prices

so all that said, give it a try, but dont hold out for it so you arent dissapointed. we put in a 15% below asking price offer and got it, so you never know. i did fall of my chair when they accepted. luckily i was only 3 months gone then!

[noddyholder]

The nationwide chief exec has said today that they expect prices to fall from peak by 25%.So back to about 2003 i think

[clam]

Unrealistic of whom, womble? What someone paid for their house is, to a degree, irrelevant to me as a buyer, as I'm not operating a charity. I mean, I'm not going to go along and say, "well, I'd like to offer 300K but, seeing as you paid more than that 3 years ago, I'll give you 330." am I? Buyers will offer what the market forces dictate. The sellers don't have to accept low offers, of course not, but that might mean they can't sell at all. Rock and a hard place, really.

[noddyholder]

sellers are not in control of prices the economy and mortgage lenders are Clam is right

[KatieDD]

The buyer are in control of the market or at least they should be not the mortgage lenders. Just because you can borrow more than 3 times your salary doesn't mean you should and that's how we've ended up in this pickle.

[morocco]

the one thing I don't understand is why everyone in the papers bangs on about 3x salary. don't many people buy with 2 incomes these days? always thought that was the reason why house prices have increased so much in last few decades - more working couples. not that I know anything about the housing market. is that not the case {clueless]

[Upwind]

KatieDD - if we had a proper market that would be the case - in reality planning restrictions mean that the supply of new properties is limited and mostly in the hands of a few property devleopers.

morocco - it used to be 2.5 times joint salary. that allowed more leeway for maternity leave, part time working, caring etc. You could argue that there are more working couples these days because couples have less choice than they used to.

[clam]

Catch 22, really. The higher the multiple of salary offered, the more people stretched to afford it (by both partners working). So the house prices rose further, and we needed yet higher multiples to be able to afford it, and so on. Exacerbated by buy-to-let landlords who had more cash, and groups of people clubbing together, and 50 year terms suggested etc... Of course prices rose. This is a long-overdue market correction. Actually, many of us are no worse off than we were several years ago. We're just losing paper profit that we thought we had in equity. If people cashed in that equity to fund short-term lifestyle choices then that's proving a problem, however.

[KatieDD]

I don't think planning is a major problem compared to the property porn ramping up the prices, Kirsty and Phil should be shot at dawn tbh. The government paying the interest on £175k mortgages after 13 weeks has altered the playing field again. The correction requires mass repossessions and that is not going to happen it would seem.
It needs to crash otherwise a whole generation is fooked.

[1dilemma]

There will be many more than forced sellers you are forgetting about all the people with lots of equity who want to move up, down or sideways they can easily afford to take a bit drop, eg bought in 1996 (only 12 yrs ago) but almost the bottom of the last crash, you're sitting on a 200% price increase so to drop by 50% if it gets you the house you want is of course better then waiting loosing the house and selling for a lot less!
we have of course totally lost the plot house price wise