Property Price Crash Incoming?

dl8860 · 4 Jul 2017 at 10:34

Haven't we had this thread about 10times in the last 2years? I'm somewhat wary myself, but have actually had an offer accepted myself recently.

I can't hang around forever waiting for a crash, and it's time to start earning some equity rather than paying rent. I'm not seeing the house as an investment, but as a place to live that is mine, and my money goes into rather that to someone else.

I'm not for one second expecting the price to shoot up any time soon, I'll just be pleased if it doesn't drop at all. And even if it does, so long as I avoid negative equity, then whenever I come to move again (which I don't think will be that long), then the place I move into will be correspondingly cheaper. Once I came to this realisation, I stopped worrying about a crash.

Ace Modder · 4 Jul 2017 at 11:16

purplesky said:
Wage increases won't help. Wages go up, so do house prices and the price of just about anything you need to buy.
This stupid emergency interest rate measure, together with Quantitative Easing, has created a zombie economy with no price discovery being allowed to occur. These tools were only meant to be used on a short term basis. We're in a right mess now, and I suspect there is a massive crash coming to just about everything, once the artificial props are removed and the markets find their true baseline. Unfortunately, there will be many job losses, repossessions and an increase in crime. 2008 will seem like a walk in the park compared with what's coming soon.

Talk about scaremongering. If you honestly knew the future of the housing market you would be a very rich man; your opinions and expectations I feel are just a guess at best. I personally have no concerns about the property market and I only bought my first house 18 months ago.

psd99 · 4 Jul 2017 at 11:40

Every single article I read in the sunday papers suggest that there is a crash that is due to hit us soon!

Just hope it doesn't end up ruining people's lives where they end up in negative equity where their mortgage outweighs the price of their homes.

London is a unique category, properties here are well overly priced.
Personally, this might give me an opportunity to move up the property ladder and get a bigger place. But it would mean that if this was to happen I would need to sell up now and sit on the money. Stick or twist is the question!?

Meatball · 4 Jul 2017 at 12:15

My partner and I have given up on the idea of ever owning a property in London, we were priced out years ago despite having a good combined annual income. We simply cannot save quick enough whilst still affording astronomical london rent and trying to enjoy our mid 20s. This is one of the many reasons we want to move out of London. The difficulty is my area of work is very much limited to Heathrow so I will need a career change which will likely result in a big pay drop. Still, it's better than blowing £1800 to pay for some London property developer's mortgage..

Blackjack Davy · 4 Jul 2017 at 16:22

Price crash? Nah. Unless there is a massive drop in immigration it won't happen. Too many vested interests in property for that to happen it feeds the market and keeps prices high.

After WWII my grandparents bought their house dirt cheap (they rented it originally but the family that owned it said "do you want to take it off our hands?") as there was an oversupply of housing and too many people had been displaced/killed. Large, late victorian/edwardian with 3 floors (servants rooms on the top). Got knocked about a bit in the blitz but survived. Today the same house in London is worth millions (got sold 30 odd years ago sadly when it wasn't that valuable)

Deleted member 77746 · 4 Jul 2017 at 20:27

danlightbulb said:
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.

Let it crash, let it build, let it crash, let it build.

Bluecube · 4 Jul 2017 at 20:51

johnny6 said:
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.

This worry is exactly why I bought a flat for my daughter who's still at primary school. If house prices continue their ridiculous increase then it'll be a sound investment. If they don't then she'll have somewhere to live/ sell when she decides to move out.

My suspicion is that a correction in the house market is overdue. The number of people that can't afford a house is ridiculous now. The only thing stopping the market from dropping is foreign buyers (I read that entire blocks of new build flats in Salford were being bought by Chinese investors) and buy to lets.

Skillmister · 4 Jul 2017 at 22:38

Bluecube said:
My suspicion is that a correction in the house market is overdue. The number of people that can't afford a house is ridiculous now. The only thing stopping the market from dropping is foreign buyers (I read that entire blocks of new build flats in Salford were being bought by Chinese investors) and buy to lets.

I have a client buying a new build flat in Liverpool with the rest of the block being easily 75% Chinese buyers with overseas registered addresses.

It's good to see that the second home stamp duty increase has only really affected the people who could barely afford a second home rather than the ones really causing the problem..

Kingdom34 · 5 Jul 2017 at 08:24

Meatball said:
My partner and I have given up on the idea of ever owning a property in London, we were priced out years ago despite having a good combined annual income. We simply cannot save quick enough whilst still affording astronomical london rent and trying to enjoy our mid 20s. This is one of the many reasons we want to move out of London. The difficulty is my area of work is very much limited to Heathrow so I will need a career change which will likely result in a big pay drop. Still, it's better than blowing £1800 to pay for some London property developer's mortgage..

Out of interest, what is the actual appeal to "living" in London?
I mean there are plenty of places a little way out of London that really are just as good, diverse and have all the characteristics of a good and varied neighbourhood. Ive never seen the appeal of the rat race and how it is so, so, so crowded all the time.

dalehitchy1 · 5 Jul 2017 at 08:55

Kingdom34 said:
Out of interest, what is the actual appeal to "living" in London?
I mean there are plenty of places a little way out of London that really are just as good, diverse and have all the characteristics of a good and varied neighbourhood. Ive never seen the appeal of the rat race and how it is so, so, so crowded all the time.

Agreed. I've just bought a house for 94k... 3 bedroom and seperating dining room. The street is not amazing desireable... But it's not bad. If I could have waited a little longer I would have bought for £130k and got a decent location.

Yes nightlife and stuff happening isn't as good as London. But it's 2h on the train to central London, or if I want a big city that's more local I have Birmingham and Nottingham less than half hour away.

Never understood why people want to live in a box room in London

Kingdom34 · 5 Jul 2017 at 09:09

dalehitchy1 said:
Agreed. I've just bought a house for 94k... 3 bedroom and seperating dining room. The street is not amazing desireable... But it's not bad. If I could have waited a little longer I would have bought for £130k and got a decent location.

Yes nightlife and stuff happening isn't as good as London. But it's 2h on the train to central London, or if I want a big city that's more local I have Birmingham and Nottingham less than half hour away.

Never understood why people want to live in a box room in London

I'm in Herts, our 3 bed is worth 400k and I'm happy. Mind I'm mid 30s with a 9mth old. Different outlook on the nightlife, I enjoy every few months a big night out, 45mins from central London. On the outside looking in is decent. Ive never understood wanting to be well within London all the time, it must feel very suffocating.

94k for a 3 bed, lovely. Id love that situation. But then again id be away from family and friends. Its all about balance. But the amount of people I know who lived in Central London and moved out these past few years, just goes to show, they've made their money and then bettered their lives by moving to bigger places and fresh air :-)

Psycho Sonny · 5 Jul 2017 at 12:51

it's not even the house prices that is ridiculous it's the traffic, the way people drive, charges, cost of living, pollution, etc.

everything london has you can get in any major city around the world not just the UK. arguably better infrastructure in even Asia.

who wants to queue for 4 hours to get into a car park?

delta0 · 5 Jul 2017 at 16:27

I love living in London. It's nice to have a lot of good options on public transport and that don't cost much. I can walk into central London on the weekend. There is always so much to do all the time. No needing to worry about getting the last train. Lots of really good parks. I can see the appeal of living outside of London with regards to getting a bigger property at a lower cost but unless you really need to do that I can't see why you would move out of London. Transportation gets really poor very quickly outside of London. You also have a much longer and expensive commute in.

I laugh when people say it only takes me 40 mins to get into London, that's quicker than people living in London. What they are missing is people in London are quoting door to door times and not just a train time to nearest major London station. My door to door time for work is 25-30 mins. My actual train time is 10 mins. I pay £125 ish per month for infinite amount of travel. I also have nice parks near me (Hampstead Heath). When you are used to being on a tube for a short period and you get on a train to outside of London it just feels like it is dragging on forever. I used to commute out of London a lot and then started working in London. I got on the train to Guildford and by Woking it just felt like it was dragging on. I was surprised at how used I had got to living and commuting in London.

Psycho Sonny · 5 Jul 2017 at 20:32

delta0 said:
I love living in London. It's nice to have a lot of good options on public transport and that don't cost much. I can walk into central London on the weekend. There is always so much to do all the time. No needing to worry about getting the last train. Lots of really good parks. I can see the appeal of living outside of London with regards to getting a bigger property at a lower cost but unless you really need to do that I can't see why you would move out of London. Transportation gets really poor very quickly outside of London. You also have a much longer and expensive commute in.

I laugh when people say it only takes me 40 mins to get into London, that's quicker than people living in London. What they are missing is people in London are quoting door to door times and not just a train time to nearest major London station. My door to door time for work is 25-30 mins. My actual train time is 10 mins. I pay £125 ish per month for infinite amount of travel. I also have nice parks near me (Hampstead Heath). When you are used to being on a tube for a short period and you get on a train to outside of London it just feels like it is dragging on forever. I used to commute out of London a lot and then started working in London. I got on the train to Guildford and by Woking it just felt like it was dragging on. I was surprised at how used I had got to living and commuting in London.

you should move to Edinburgh or West end of Glasgow, then tell me London is so great

delta0 · 5 Jul 2017 at 20:54

Psycho Sonny said:
you should move to Edinburgh or West end of Glasgow, then tell me London is so great

I've been to a lot of cities and so far the only ones I would live are Tokyo, Seoul, New York and London of course.

Bluecube · 5 Jul 2017 at 21:26

I can't see the appeal in living in a city myself. They're all rancid, smelly, concrete hellholes.

psd99 · 6 Jul 2017 at 08:44

Skillmister said:
It's good to see that the second home stamp duty increase has only really affected the people who could barely afford a second home rather than the ones really causing the problem..

Those Chinese investors are simply unstoppable. They got so much money there and that increase would not have made a tiny difference to them.

If this change was made to help young people get on the ladder, why not increase stamp duty EVEN more for foreign investors?!

When the Tories made the decision to up the stamp duty on second homes, people like George Osborne were not impacted as they probably already had many buy to lets. It's working middle class people who get heavily impacted. Typical Tories always in for the rich

delta0 · 6 Jul 2017 at 08:57

psd99 said:
Those Chinese investors are simply unstoppable. They got so much money there and that increase would not have made a tiny difference to them.

If this change was made to help young people get on the ladder, why not increase stamp duty EVEN more for foreign investors?!

When the Tories made the decision to up the stamp duty on second homes, people like George Osborne were not impacted as they probably already had many buy to lets. It's working middle class people who get heavily impacted. Typical Tories always in for the rich

Problem is no one wants to invest. We can stop the foreign investors but then we need to accept that even less properties will be built.

Kingdom34 · 6 Jul 2017 at 10:18

delta0 said:
I love living in London. It's nice to have a lot of good options on public transport and that don't cost much. I can walk into central London on the weekend. There is always so much to do all the time. No needing to worry about getting the last train. Lots of really good parks. I can see the appeal of living outside of London with regards to getting a bigger property at a lower cost but unless you really need to do that I can't see why you would move out of London. Transportation gets really poor very quickly outside of London. You also have a much longer and expensive commute in.

I laugh when people say it only takes me 40 mins to get into London, that's quicker than people living in London. What they are missing is people in London are quoting door to door times and not just a train time to nearest major London station. My door to door time for work is 25-30 mins. My actual train time is 10 mins. I pay £125 ish per month for infinite amount of travel. I also have nice parks near me (Hampstead Heath). When you are used to being on a tube for a short period and you get on a train to outside of London it just feels like it is dragging on forever. I used to commute out of London a lot and then started working in London. I got on the train to Guildford and by Woking it just felt like it was dragging on. I was surprised at how used I had got to living and commuting in London.

All fair points but youre missing a few points that the above poster to you has mentioned. Its not all great.

dl8860 · 6 Jul 2017 at 12:45

London is where, on the whole, the £ is.

I live in London now but I'm 26 and moving out very soon to commute in.

The only way I'd consider staying longer is if I could live somewhere like Hampstead where you really do have the best of both worlds of living close to everything but having amazing outside space and it's not a concrete mess and busy everywhere.

We all have our thresholds for how long a commute we can put up with etc., but I imagine given the choice, not many people would stay in not city centre locations in smaller accommodation, if there was an alternative of commuting only a bit longer and living somewhere bigger and nicer. From a certain age onward that is.

The reason I haven't left London is because it's the fastest place to scale your salary, for most people that is.