House prices..

Sagalout said:
of course lowering prices help first time buyers. Its cyclical - in the short term its hard to get a mortgage, but then eventually prices bottom out, houses become a safe bet for the banks and they start competing for mortgage business again (although this time it will be back to realistic multiples) so those buyers with a decent deposit will be able to pickup a bargain.

How do you think there are so many people who bought and made a fortune after the last crash?

The people who lose out, as always, are those that bought at the top of the market. There was an interesting property show on about 3 months ago where they were talking to some e who bought loads of cheap property in the mid 90's. He could see the crash coming and sold most of his portfolio last year, to bank the cash ready for the next phase of bargains. People like this who have faith in the boom and bust cycle make the money off those who blindly think house prices can only go up and buy houses at crazy prices at the top of the crest.
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exactly just hope I'm brave enough come the trough, not much of a risk though and could just buy places for the kids
 
chaparral said:
If house prices dropped,Rent prices would also drop....
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Not so. The housing market and rental market are completely different. The housing market is determined mostly by money supply (most of M4 growth finds its way into the housing stock) with a bit of greed (higher propensity to buy in a rising market, lower propensity to buy in a falling market). Critically, supply and demand are pretty much irrelevant.

The rental market on the other hand is pretty much totally determined by supply and demand.
 
clv101 said:
The rental market on the other hand is pretty much totally determined by supply and demand.
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But surely demand for rental places would go down if house prices dropped...As more people would be able to buy instead of rent..Which would lead to cheaper rent prices...
 
chaparral said:
But surely demand for rental places would go down if house prices dropped...As more people would be able to buy instead of rent..Which would lead to cheaper rent prices...
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But look how many sales are actually happening - a lot less properties are for sale, and a lot less transactions are taking place.

So more people are renting at the moment, rather than buying when the market is falling.

Hence rents are going up at the moment. The place we've been in this year in London has gone up a whopping 25% in one year. Although I reckon you could haggle a bit, it's still insane!
 
chaparral said:
But surely demand for rental places would go down if house prices dropped...As more people would be able to buy instead of rent..Which would lead to cheaper rent prices...
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No, as house prices fall transactions fall. Halifax are talking about a 45% drop this year. Mobility won't fall as much leading to increased demand for renting.
 
Does anyone reckon its a good idea to buy my council house, ive been advised by a friend even if its £200-240k its not going to worth it since its a wooden house ?
 
carpmaster said:
It does appear to be that way unfortunately. He mentioned it cost £176,000 at the time.

I've just had a quick look and there are 3 bedroom places (not 2 as above) up for sale starting at £137,000. I could have the location wrong though?
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Correct, I bought my house in December for 176k. Its a well laid out, spacious 2 double bedroomed 30's semi in a lovely location, with a large garden overlooking a wood.

The fact that you can get a 3 bedroom (or more correctly, 1 bedroom and 2 box roomed) house on an ex council estate about a mile away for less money holds absolutely no relation to the value of my house.

And prices where I live are still rising.

You may think I'm burying my head in the sand, however in the mean time, I've got a house I'm very happy with. You guys just keep thinking that house you've always wanted is going to drop in value, whilst you carry on paying rent or living with your parents.

The way I see it, there has been a rationalisation of the market. Estate agents have been over valuing properties left right and centre. Now the boom is over, the houses that were grossly overvalued have 'dropped' to their real value.
 
Bug One said:
The way I see it, there has been a rationalisation of the market. Estate agents have been over valuing properties left right and centre. Now the boom is over, the houses that were grossly overvalued have 'dropped' to their real value.
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Are you actually suggesting that the falls we've seen so far are pretty much it, they have now 'dropped' to their real value and won't fall much further?
 
clv101 said:
Are you actually suggesting that the falls we've seen so far are pretty much it, they have now 'dropped' to their real value and won't fall much further?
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everyone that has a different opinion than you, you seem to think they are insane!

i wish i knew where you got all your info from, to be SO sure of whats going to happen.
 
clv101 said:
That's not my point - the point is being clear what he means.
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What I'm saying is that places that were over valued for whatever reason, will see a huge drop in house prices.

Places that weren't will not.

I cannot see the price of affordable, family houses dropping by any significant margin.
 
Sorry Bug One, that's anything but clear.

Sure some places will go up and some will go down. The only thing that's interesting is the average behaviour of the market. It's already fallen some 7%. Are you saying that's it or are you expecting another 3%, another 5%, 10%, 20% or what over the next couple of years?
 
Bug One said:
I cannot see the price of affordable, family houses dropping by any significant margin.
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This is why there is a reported drop in the average price then. Because not many affordable homes exist for familys for them to not drop in price and cancel out the rest of the properties.:p
 
I hate everything being made into a 'national average' as all comment being made by people including myself and bug one make the comment which we mainly aim on our area seem to get slated! I'll still stick with what I said weeks ago! I'm still not expecting it to be as bad as being made out! Not at all!
 
Currently there are 2 economies. The one the general public sees and its press reflects and the real one. During the next 12 months the 2 economies are very likely to become 1 and the real problems will become clear. There are worse cases than Northern Rock out there, watch this space.
 
housemaster said:
Currently there are 2 economies. The one the general public sees and its press reflects and the real one. During the next 12 months the 2 economies are very likely to become 1 and the real problems will become clear. There are worse cases than Northern Rock out there, watch this space.
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Some analysts seem to think there are some really big horror stories out there yet to come to light... :eek:
 
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