People Begging for a House Price Crash

There are a good few people who own property outright and who therefore have quite a lot of disposable income which is looking for bargains.

I bet, but they are not the people bleating that they can't get on the ladder because prices and deposit requirements are too high.

in periods when house prices are falling at a rate higher than the rent...even though mortgage rates are cheaper... it is cheaper to pay the rent and wait until prices stop falling

regards

Repeat - in the 1990's when the prices stopped falling, there was hardly any property to buy because people could not sell if their mortgage was more than their property was worth. I was one, remember? There was not cheap property for sale - there was hardly any property for sale at all. The for sale boards disappeared for years... The only way people in negative equity can sell is if

1) their lender will let them, and 2) they can make up the shortfall to the lender out of their own pocket. Alternative 3) throw keys at lender and let them chase you for years and years for the shortfall. I knew a number of people who did this, and the lenders never gave up chasing them -I believe their indemnity insurance required it.

True. My view is that planning permission should be relaxed on "greenbelt" land outside of the South East.

An alternative is the transferable mortgage. However, as soon as interest rates rise there will be quite a lot of cheap houses on the market.

We had mostly rented in the UK right up to the mid 70s when the ratio between owner occupied and tenant shifted towards OO.

Moi?

Oh, I think I have a pretty good idea.

Or resent the mess the credit bubble (property being the primary asset) has got us into?

Oh, I think I could manage.

It will. Just about every large credit bubble in history has seen the primary asset sell at 10% to 33% of peak real price by the bottom of the debt-deflation.

Indeed. How stupid is that?

Or forced to sell for anything they can get.

Given that sooner or later the banks will be in trouble again and looking to force bad loans off their books, I expect the recalcitrants will be given a push.

Rest assured: in the debt-deflation, both prices and rents will fall.

Same reason Carnegie got his steel mills at 90% discount after the last credit cycle completed.

The more spectaclar shift will be in families staying together and kids moving back in with parents, people moving in with friends...

The goverment has taken on too much of the debt during the debt-deflation. It can't afford to pay benefits at the bubble rate. That means it won't provide as much support to housing.

Not true. There's mortgage-interest support. Indeed that's been paid at a rate so hight it's been paying back capital too. However the government is now also cutting this...

It probably would be a good thing if people only bought a house once when they settled down. The frantic property-trading that went on in the UK made a considerable contribution to the bubble.

FoFP

Then there are those who because of the high house prices will pay more IHT on their remaining assets. I want them back to an earnings/ house price ratio of 3.5 like they used to be before the madness of

110% mortgages and no deposits. Also, my daughter has some capital and I say to her, wait till the prices fall then your "deposit" will buy more. I bought my first house in the 70's...and as I understand it then the BOE told the banks if they were lending too much relative to their assets. Its the only way to prevent another farce of the excess rises from 1997 and beyond until the near disaster of October 2008 when we all would have lost everything.

The problem is that in the UK too few houses are being built and we have too many immigrants coming in over the past 15 years. If supply exceeded demand house prices would drop accordingly.

many did sell...many were forced out... some of those were buy to let who went on the lam!

not anywhere i've lived...the boards just got romantically distressed

that's life...

however, the calculation i gave you is relevant...

one thing i did notice during the last drop was idiots who hung on for a price while the prices kept dropping..and they kept hoping.. instead of cutting hard and getting out quick.... i calculated the real last drop at around 50%

regards

same in the mid 1980s. We were trying to sell to get a larger house. Two children over 16 and one of the bedrooms wouldn't take a full length bed. We needed something larger. But in our close there were 4 or five homes repossessed selling for less than we needed to get. We weren't in neg equ because we had been in for a few years but plenty were in that position

There were loads of houses for sale. All repossessed by the banks and BSs

I know some who just died

I've been arguing this for years, but many people have a pavlovian response to any threat to the "green belt". Continually triggered, of course, by the dinosaurs in the CLA and parasite property hoarders.

Until either property prices fall, or minimum incomes rise, by a factor of about 5, the economy will be hamstrung.

Depends on where they are

Yet rent for rural property in this part of the country is lower than town.

They're begging for a housing crash Maria because they can't afford housing anymore. Barely anyone can .. The price of housing in the UK, thanks largely to some rather peculiar lending habits over the past decade or two, has become so fantastically detached from normal everyday salaries, that total devastation of the market still for many, remains not only the best chance they've got of joining what they see as 'civilised society', but the only realistic chance they've got. There was a time, when deteriorating living standards from one generation to the next, would not have been brushed off as irrelevant 'bleating', but rather a bad sign that things were going demonstrably in the wrong direction

Resentment of those who own high priced property needn't be an aspect of this. It's really not financially viable to spend your life renting in the UK unless you're already fairly wealthy. When it comes to your retirement, who's going to pick up your rent bill; your pension certainly won't cover it?

They don't want "endless" opportunities, they just want one opportunity.

There is a sizable chunk of the market which is forced sales. If prices do re-base downwards these people have no choice but to sell at that price (eventually)

tim

No you are wrong.

In 1990 one of my neighbours died and their family inherited the house. The peak price for that house (at the time) was 115K. They eventually put it on the market at 75K to shift it. (This was an above average price for a house at the time).

There were houses for sale and the were priced at the "crashed" level.

Another example when I sold two years later (at 105K) I downsided to a property that I bought for 45K, my neighbour told me that she had paid 60K for her smaller property four years previously.

If prices crash houses do become available at the lower price and this DID happen in the 90s

tim

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The core problem is that building land in the UK is ridiculously expensive. Even in the Outer Hebrides.

House prices need to drop massively. Part of our problem as a nation is lack of jobs, which is caused by us needing a relatively high wage due to the cost of living. A main reason for the high cost of living is the high cost of housing.