Property Price Crash Incoming?

SpeedFreak

SpeedFreak

SpeedFreak

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Joined
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As a long term watcher of the Bristol property market I am observing that properties are going sold subject to contract, but more frequently than ever but returning to the market at reduced priced. Buyers seem to be struggling to raise the required mortgages, even at historically low interest rates.

Prices have escalated beyond control in the last 5 years, my own property for example has risen about 60% in that period. It would be much more expensive for me to buy my house now with my deposit from 2012.

For many the current high house prices are either paper wealth or contibute to enhancing the wealth of property speculators who are already quite well off. Housing has become an investment vehicle rather than a basic requirement and I for one would love to see this situation reverse.

Is anyone else seeing the same thing where they are? I am of the view that the tide has firmly turned and by 2018 things could get very bad for house prices. In 2008 mainland UK saw a blip, Northern Ireland for example experienced a severe crash from which it has not yet rebounded. Granted, the markets are different but the mainland UK is not immune to a crash.
 
IMO it's a very big jump from properties coming back to the market to people not being able to raise the mortgage for them.
There's far too many variables in a house purchase to make an assumption that they're not affordable.
 
Many people have been hoping for a crash for getting on 15 years now and it hasn't come - if anything the situation has just got worse.

The issue is a paper crash doesn't really help anyone, as all that will happen is the market will go quiet as no one will sell.

God only knows what the answer is to all this.
 
I can't see wage growth following. How exactly will the government fund these in the public sector at above inflation (CPI is 2.7% and RPI 3.7%)?
 
SpeedFreak said:
I can't see wage growth following. How exactly will the government fund these in the public sector at above inflation (CPI is 2.7% and RPI 3.7%)?
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Not saying it will happen. But it is the best way to remove the bubble on house prices and certainly the only way I can see myself affording to move up from my first property. Not wanting to get any more political, do you think the public sector are going to accept only 1% in April against those inflation figures?
 
Trifid said:
do you think the public sector are going to accept only 1% in April against those inflation figures?
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Not really a choice of "accepting" - you are told to either "get on with" it or "you know where the door is". Hopefully PS will receive the increase they deserve and yes, i do mean "deserve"
 
My running theory... As a recent buyer in Bristol also, is that we're seeing people slowly migrating out of London for example.

Bristol is a pretty popular city and a technology hub so a good jump from London.
 
I think it entirely depends on local factors.

Looking at my area, since buying our home in 2014 house prices have increased by 50-60% (looking at actual property sale prices from six months ago) and 80-90% if you look at the current 'for sale' stock (obviously there is no guarantee properties will sell at these rates). Regardless thats a ridiculous increase in such a short space of time. However it is being driven by proximity to London and crossrail, plus the volume of regeneration which seems to be happening across the town.

To put it into perspective we paid £210k for our 3 bed house which admittedly was/is a fixer upper. Looking at properties for sale now along my commute to work (across town) studio apartments are being advertised for sale at about the same price we paid for our house. A guy at my work has just put an offer in on a 1 bed flat for £225k. I couldn't believe it when he told me.

However whilst I'm not sure there will be a sudden drop in house prices, I can definitely see a slowing down of the rate of increase. I suppose it entirely depends on whether crossrail creates a second bump in 2019 when it is fully operational.
 
rexehuk said:
My running theory... As a recent buyer in Bristol also, is that we're seeing people slowly migrating out of London for example.

Bristol is a pretty popular city and a technology hub so a good jump from London.
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Bristol prices are significantly influenced by London.

I have friends who are buying in bristol as London is too expensive.
Prices seem very high and the type of property they want is in limited supply, so making early offers seems more common. As does bidding more than the asking price.


Not seeing anything like this in Nottingham.
Prices seem to be very similar to 4 years ago.
 
Holst1981 said:
Bristol prices are significantly influenced by London.

I have friends who are buying in bristol as London is too expensive.
Prices seem very high and the type of property they want is in limited supply, so making early offers seems more common. As does bidding more than the asking price.


Not seeing anything like this in Nottingham.
Prices seem to be very similar to 4 years ago.
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I used to live in London, moved to Bristol in 2013. Once you've been and had a few "you get what for 300K???" eventually you cop on and see how crazy London is property wise. £500k for a 1 bed studio in central? No thanks!
 
Trifid said:
Stagnation of prices and strong wage growth. I can see the stagnation part happening since brexit. Hopefully wages will follow. Certainly the public sector are due above inflation rises.
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I can't see that working

As soon as wages go up people can afford more and supply and demand will raise house prices. Pretty much everyone I know lives beyond there means.

I know this is only one case and probably not the norm but I gave a driver a £100 per week payrise a few years back ( 10 yrs) as he was a mate and I knew he was struggling. He had to do a little bit more work for it but only about an hour a day.
Did it make his life better..No he went out and financed a more expensive car.......And got further into debt.
 
rexehuk said:
I used to live in London, moved to Bristol in 2013. Once you've been and had a few "you get what for 300K???" eventually you cop on and see how crazy London is property wise. £500k for a 1 bed studio in central? No thanks!
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Property is more than double in Bristol compared to Nottingham.
My 250k house is much better than what they are looking at for 500k

Very glad I live in Nottingham.
 
London property market crashed already but doubt the rest of the U.K. will follow as much since prices weren't as inflated. I do a lot of new build in London and my clients have had to drop prices by 10% - 15% + various incentives to shift new build properties recently.
 
My partner and I are looking to buy our first house together, we have a budget up to around 400K; if we can we will spend around 350K. Don't see any sign of a crash down here, if anything the well-priced houses are being snapped up in record time.
 
Just had an offer accepted on a 10 year old 1 bedroom flat in Edinburgh. Offers over £105k. Market value £110k. Offered 127k to seal the deal.

Solicitor advised me that most properties in Edinburgh are going for 10% + over market value. Most flats are selling within 10 days of going on the market, its offers over, closing date, sealed bids....

Last 3 months property reports state that 1 bed flats are going for on average 16.8% over valuation, 2 bed flats, 14% over.

I do feel very bitter paying 17k over the market value..... its 17k savings that could have been spend on holidays, a new kitchen, or more into the mortgage for a smaller loan term.

Just last week the scotsman posted an article saying that properties within edinburgh will increase by 23% in 4 years...
 
Nobody knows what is going to happen, it depends on what decisions are made by central banks and regulatory bodies.
Rates may rise and cheap funding schemes ended, or neither may happen,

At the moment because of the way the country has been run, young people are going to struggle financial if they want any form of independence, it's very sad.
 
50/50, Bristol prices are crazy and I've already been priced out of the market, and rapidly being priced out of the surrounding cheap areas like those just inside Wales, they have gone up insane amounts in the last three years.
However I don't think there will be a crash, unless Brexit goes hard and that's looking less likely these days and if there is a crash it won't help 98% of people as mortgages will be hard to get etc, it'll just help the few with huge deposits and the rich who can just afford it already but will buy more for less.
there's just zero political will to sort the issue and there's a significant portion of the public that doesn't want it sorting as they think it makes them better off, which isn't really the case unless they sell up and move abroad.
 
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Slam62 said:
At the moment because of the way the country has been run, young people are going to struggle financial if they want any form of independence, it's very sad.
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Exact conversation my wife and I have been having about our five year old. I can only see two options:

He lives with us until well into his 40s or we help him by financing a large chunk of his first property cost.
 
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