House Price Crash draws closer

Also are not Individual Insolvencies and Mortgage repossessions starting to accelerate?

It sounds like you probably believe it as its obviously got you wound up. You're not an estate agent are you ?

I'm not wound up at all. If house prices really do crash by 50% I can move upmarket so no problem there.

I just dont understand people who go around shouting that the sky is falling, but dont put a roof up. To reiterate (calmly), if you *really* believe that house prices are going to fall say 30-50% over the next year or two, you could make a lot of money by selling up now and buying back in a couple of years time. No good bleating you missed the boat, because you are saying pirces will continue to drop, so by definition you havent missed it. To continue the analogy, you are like a person standing on the Titanic saying 'this boat is going to sink you'll all die' but the boat is still in the harbour and you could get off if you wanted...or believed.

"All abooord the Chicken Little Express. All abooooord."

"The 'Denial' phase, which has run for several months since last summer, is ending. It is becoming increasingly apparent that prices are falling. Those who said that prices would pick up in the fall, or the market would see a gradual sideways correction, are waking up to the reality of an overbuilt and overpriced market with buyers unwilling to pay current asking prices."

There is a growing supply, with sellers seeking to achieve prices at perceived "market value", but these are based upon historical reports of substantial house price growth in the past. Significant number of properties are now advertised as chain-free - evidence suggesting that many "buy-to-let" landlords are also heading for the exit door. But serious buyers are scarce and those that do buy, are only responding to clear bargains. Information we receive from estate agents suggests that aggressive price cuts are required, just to get viewings. Cash buyers are getting big discounts, from sellers who are too nervous to wait in chains. Unfortunately for those sellers holding out, today's bargain price is tomorrow's market level.

wrote

Seems fair comment to me. I do not understand why the government is so proud of having completely lost control of house price inflation and of having ratcheted personal debt above a trillion quid. Take the increment in debt out of the economic growth of which Brown is so proud and you find that "growth" has in fact been solidly negative for about 8 years. IOW, it's all debt and the sky is darkening as many chickens come to roost.

I am sorely tempted to vote Labour tomorrow just to make sure the party responsible is in power and unable to dodge the consequences.

............... if you *really* believe that house prices are going to fall say 30-50% over the next year or two, you could make a lot of money by selling up now and buying back in a couple of years time. .......> --

I think you are inflating the figures somewhat, I have mentioned 30% but nowhere have I suggested falls as high as 50% though others on here may have.

As for selling my house. Why dont you try reading my posts properly. I have already said that buyers have dried up. Houses round here have sat on the market for months now with no interest, some have reduced by 15 to 20% and still havent sold. Long gone are the days when you could sell your house just like that. Perhaps you have never sold a house and you imagine it is all perfectly straightforward. (That may explain your apparent naivity.) Well I have bought and sold several over the years and it is rarely straightforward particularly in the type of market we have at present. Anyone trying to sell now has my sympathy as it will almost certainly be a painful and disappointing process for them. Perhaps if I put mine up for sale at a 30% discount to similiar properties around here I might sell it but that would defeat the object rather wouldn't it.

wrote

You missed one. The govt's push to get people into further education - paying fees and taking loans to fund it - is yet another way they have disguised unemployment as something else.

I really really hope so, I am a would-be FTB, *if* I could get a mortgage high enough to purchase a similar property then I would not only be accumulating equity but saving around £100 p/m , but I cannot get a mortgage large enough to buy even a starter home and so I am forced into renting (even though the rent is greater than the mortgage would be) and it makes me physically sick when I go to pay my rent each month knowing that I am paying someone elses BTL mortgage and putting a hundred quid into his back pocket.

Even if house prices have peaked and are about to fall, I would still be better off buying right now than I am renting, but 2 1/2 or even 3 times my salary is insufficient when a two bedroomed terraced house is over

100k, and I am not foolish enough to borrow more than that.

I am feeling rather hopefull at the moment however as all the evidence suggests that a price correction (if not a full crash) is likely, this combined with an increase in interest rates might panic my landlord into accepting an offer.

House Price crash - here we come :-)

"Tumbleweed" wrote

The risk I suppose is that the market has to drop by a certain minimum for it to be worth doing this. If you have a 300k property and you sell it, move out, and re-purchase something similar, the transaction costs are non-trivial. Estate agent fee about 6k; legal fees about 2k; moving out and in again, say 2k; mortgage re-arrangement and valuation fees, probably another 2k; stamp duty 6k. That's 18k without really thinking about it, so you need 6% to break even. Probably you need about 15% to reflect the likelihood of needing to spend on your replacement property to get it back into the fettle the one you sold was in (would apply to me anyway) - kitchens, bathrooms, and gardens are expensive.

I suspect people don't sell because that feels too risky and because unless you have lived through a bust you tend to be unable to believe they are even possible.

"davidof" wrote

The evidence suggests the exact opposite.

Agreed. The stamp duty aspect has had a very big impact on current climate, imho. But then... i guess philanthropists do have big spending habits? :-)

j-1

"RaZe" wrote

You're not really - rental yield is about 5% and mortgage rates are about

5%, so whether you rent a house or rent the money to buy a house, they cost about the same.

That said, if you earn reasonable dosh by local standards, can't afford to buy, and are one of mnay, then clearly a market correction is required and probable.

Dunno, but I know someone who's trying to sell his house and thinks it's worth 535k. He's about to discover that houses offered at anywhere between

500k and (~) 575k are in fact all worth the same: 499k.

Anyone just over a threshold value-wise will find they're now just under it again.

In message , curiosity writes

But was that price higher than similar houses had sold at previously?

Say I have a loaf of bread which sells for 85p on a regular basis in most shops - Its' value is 85p.

But there is no reason why another shop cant have a price of £1.25, but not sell any loaves - the same loaf has a price of £1.25.

You can drop the price of the second loaf by 40p before there is any indication of a reduction in value.

Same with houses.

In message , Tumbleweed writes

Exactly... And that is exactly what happens in the market place. In general, the estate agent in any locality who suggests the highest asking prices, (which the sellers misread as a valuation), tends to get the largest market share. This is a self perpetuating situation, and is evidenced by prices rising and volume of property on the market increasing.

This tends to raise asking prices beyond values, (unless values rise to keep up with prices), and turning this around when values level off is like altering course on an oil tanker.

As an estate agent, I noticed our stock levels falling gradually during

1997/98, which was a good sign that the boom was coming.

Stock levels rose gradually over 2003, and I sold the business in 2004.

Now that we have sites like Rightmove, I will be watching stock levels in a few years and, when I see them start to fall again, it will be a strong buying signal.

Here we go - I predict that property prices will rise by 50% over a 2 year period in the not too distant future. (If I say this every year, will I be recognised as a property guru when they do rise? )

In message , curiosity writes

None, except that it is less than £250K

No.

Not quite...

price = asking price of a particular property currently for sale value = agreed selling price of the most recently sold, similar property, or properties.

>

In message , John Redman writes

If you have lived through a bust, the only losers are those who sold at a loss. Those that continued to live in their homes, and pay their loans, and get on with their lives, are big winners.

Similarly, those who held blue chip stocks after Black ????Day, are big winners.

It's only a profit if you take it..... it's only a loss if you take it.

In message , John Redman writes

Didnt consider that tactic - that takes me firmly back to being a Dont Know

Isn't it the case that this government has merely taken advantage of the conditions created by the previous Tory administrations? As I understand it, it was Mrs T who really allowed easy access to credit back in the early 80s, and that all the apparent growth since then has been largely due to this.

KotF