So basically, my estate agent is going to advise me to sell a any price so he can get the sale, right?

[beansprout]

Which is why he has suggested we drop from 300 to 260k?

I know the 250 threshold is drawing us in too, so no-one is going to offer a penny over that and what with "cheeky offers" being advised, it's all becoming a big waste of time. Gah.

The rental market is flooded with properties that the owners have decided to let out because they can't sell.Already I have seen several drops in rental prices round here and places going unlet (and unsold) for several months.

Even at 5% a £250k mortgage is about £1500 a month, I'm sure that you can rent a place for less than this, plus you won't be paying buildings insurance or have to pay any maintenance costs and any profit from the sale would be earning a nice bit of interet in a 6-7% account.

Obviously different where I am fiodyl. All of my rental properties have undergone a hike in rents in the last few months and people were queueing up to rent them.

Horses for courses and all that.

you must have been selling yourself short for the past few years, CashmereKate

I really object to the use of "doom and gloom merchants" for people who don't think property prices will continue to shoot upwards. If they fall back, in a few years, beansprout should be able to afford a lot more space for her DC - what is so gloomy about that? The current ridiculously high prices bring misery to ordinary young families while making a handful of property speculators rich.

The flat I am renting is 950 a month and would be about 1700 with a mortgage.

Where have I said that doom and gloom merchants were people who said prices weren't going to shoot upwards? The market can no longer sustain the rises of the last few years - it's been crazy and this correction has been a long time coming

I'm talking about people who are saying that the market will fall 50% as if it's set in stone and terrifying people who have to move - they have no choice. None of us know what the market will do, not me and not you. If the market falls too low then there will be serious problems for people with negative equity and those who have to move will really struggle to pay off their mortgage to move. Those people will end up with very real long term problems, including massive personal debt from loan shark companies and bankruptcy and we will find ourselves reliving the frightening economics of the early to mid 90s. No one wants that, surely?

No one would be calling it 'Doom and Gloom' if the price of your gas and electric bills were falling, or the cost of your weekly shop got less and less each month, so why is it any different with the price of houses?

CashmereKate, agree that we don't know what will happen with the markets - but I don't think that pretending that substantial falls are unlikely helps anyone. Pretending the boom continues and there is no problem won't prevent a recession.

Negative equity is already a reality for a few of my friends who bought recently. Being able to discuss it openly means they get better advice about their options and certainly avoid going down the loan shark route. My friends know they are not alone. They also understand that in the long run they will still benefit from prices falling as they are in their twenties and nowhere near owning a "forever home". One will likely have himself declared bankrupt, the others will simply sit tight for a few years and pay down their mortgages as best they can.

For exactly the reasons set out in my earlier post. A massive fall in prices is bad news for a huge number of people. Speculation about a massive fall is extremely worrying if you can foresee yourself being in a negative equity situation.

I would love to see a massive fall in fuel prices - but not only is that unlikely, it won't actually hurt ordinary people, a big drop in property prices might just do that.

Anyway, gotta go and put my dc to bed.

A massive rise in prices was bad news for a much bigger group of people - and nobody seems to call Kirstie Allsopp a doom and gloom merchant

Upwind - I have not said that the boom will continue and as I've said a correction is good.

You mentioned your friends in their 20s. I am a lot lot older than that () and suffered massively with negative equity and soaring interest rates in the early nineties (anyone remember Black Wednesday when they hit 15%?). A lot of my friends also suffered and a couple were made bankrupt. Imagine losing your job and then when you can't pay your mortgae and try to sell you have to find £20,000 just to pay off your mortgage. Even now they can't get credit. Their relationships suffered, they suffered and I wouldn't wish it on anyone.

I look after a number of rental properties for people and very few of them have opted to sell, partly because the market is so slow but also because the rental market where I live is strong and they are covering their costs.

Yes your right that, unfortunatley, it will be bad news for some people, but pretending it's not happening and refusing to talk about it won't cchange that.

Surely you must agree that facing up to the very real prospect of negative equity now and trying as best you can to do something about it, is better than sticking your head in the sand and doing nothing until its too late?

Sooo CashmereKate you have a vested interest in the property market, looking after buy to let properties, which lets be honest has been 50% of the problem, people buying for their pension etc.
The rental market will go down as fast as the owner occupied losses on the basis if people can't pay, they won't so the landlords can drop the rent or have the properties stand empty.

I have no idea where you get the idea that I'm pretending it's not happening. Your theory is predicated on the assumption of something that might happen.

I don't think things will be as bad as you suggest. We'll see.

I am not selling my house because I don't have to and I certainly wouldn't move in the current market. I was badly burned last time and leant my lesson. Been there got the t-shirt blah blah blah. Rest assured I am not sticking my head in the sand. At all.

A huge % of the lower end properties for sale in brighton are ex buy to lets.And this is a university town with 2 unis so must be bad if they are bailing out now.

KatieDD - so shoot me. I look after (literally) a handful of properties for a couple of people as a favour to them. Shock horror.

As I've said (ad nauseam) dropping rental prices have not yet been a problem here. No doubt it will but it isn't as yet and the properties are let on leases of at least a year.

I took my house off the market for sale a few weeks ago and was able to let it within days (actually had a choice of families to choose from who was happy to pay the advertised rent). We have relocated to a pricier area hundreds of miles away and pay 1500 pcm rent for a house which would cost us approx 3500 pcm mortgage. This is an expensive area which we deliberately chose for the excellent state schools. It definitely depends on the area whether you have modest rentals or not. In my particular area, only a handful more family houses have come up for rent in the last 6 mths since we've relocated that I would even want to view so I would hardly describe the rental market being flooded even in this dire housing market. Really good family homes are few and far between in the rental market in my experience. We've decided to sit it out for the next few years but I guess that we're fortunate (if you could call it that)that we're not in a situation where we are desperate to sell - despite having relocated for DH's job!

Rents are dropping where we are (SE, home counties). And suddenly there are LOADS of properties available to let, mainly because they aren't selling. It's mad to tihnk rental prices will go up! There's a GLUT of properties, it's a renters and buyers market.

Have a look at this , it would seem that Knight Frank and Savills would agree, personally I think people haven't noticed this as much as it has been in the shadow of house prices

rents dropping in my part of SW London too, posted about one EA 'sale' adverts a few weeks ago.
Remember high house prices transfer wealth from the young to the old and the poor to the rich

I'm going to keep posting that I like it so much

regardless of what the market is doing at the moment, lets get this straight... estate agents are only in it for themselves...

I do think 'where we are' is a key phrase in all this. The picture is not the same in all parts of the country - not even in all parts of the region I live in (Yorkshire). You need to get local advice on your options re renting, achievable sale prices etc.

I must be missing something - I don't understand why there should be an overall glut of rental property.

Surely if you decide to rent out your property out rather than sell it, then you are still going to have to rent somewhere else yourself, so one should therefore cancel the other out?

I can see though that there may local shifts in demand, eg if there was a net movement away from certain parts of the country, or preference for renting certain types of property.

But alot of people who have rented their properties out haven't rented somewhere else, they have taken out 2nd mortgages and bought another property.

Alot of them will be totally reliant on the rental income to pay the 1st mortgage.
They will also have a 'double exposure' to any further downturn in the housing market.

IMO very risky at the moment.

My very close friend is looking into doing this atm and I am v worried for them.We are going out for dinner together tomorrow night and I am going to try and convince her not to

An EA tried to talk me into renting out here and buying another place. In the absence of sales, they are relying on letting properties to keep them afloat atm. And of course, you are likely to ask them to sell for you in due course if you have been dealing with them already.