Not only does it make sense it is the best way to travel in London. It is crazy to think about driving. Public transport that is owned by the public and works very well. No waiting, lots of options, lots of stations and costs are capped.
Property Price Crash Incoming?
- Thread starter SpeedFreak
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How will that demand be met at higher prices, when current prices are too high for speculation (post section 24) and most wannabe home owners/up sizers?
Prices have to come down to the level at which ‘demand’ will be met or wages will have to rise to tally with them.
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Unfortunately for the average Joe Bloggs, most will be snapped up by foreign investors or those rich enough to buy their 2nd or 3rd homes.
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There won't be enough to take up the slack, it certainly didn't happen during the credit crunch when prices fell back.
Only the massive amount of Government intervention made the difference i.e. rates down to 0.25% (from 5.75%), Help to Buy, Quantative easing, FLS Scheme, SLS Scheme, Term funding scheme and God knows what else.
Inadvertently these interventions just exacerbate the whole situation in my opinion and further cements my thinking that there will be no crash soon. I mean why would there be? Low interest rates and government help schemes surely creates an even larger market that fuels more demand.
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I've started to notice even more mainstream press now discussing this as a possibility. In a market built upon sentiment, enough media coverage talking it up will contribute towards it happening. I quite fancy upsizing so will watch with interest. A 30-40% drop would be welcome from me.
I'm very close to upsizing at the moment, not sure if it's worth waiting a few months or not... I suppose it's all a guess really. I just hope negative equity is avoidable...
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I'm lucky enough to be in no great danger of that unless something absolutely catestrophic happens beyond 60%
Caporegime
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crash won't happen unless banks stop lending or builders start building homes left, right and centre. people need homes to live in. demand is far greater than supply which is why they keep on rising.
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Or interest rates rise. If not to live in, what else do people need homes for?
Wont they just be moved into LTD companies
Not only that if people can't afford to sell..Then there will be more of a housing shortfall..
It's expensive if you dine at Michelin star restaurants or shop at Savile Row on a regular basis... In reality a £3 Tesco meal deal will be the same throughout the country, the average price of petrol is £1.14 like everywhere else and clothes, well I get online.
Agreed - aside from property things generally aren't that expensive. Drinking / eating out can be if you choose the 'wrong' places but it's not hard to find a restaurant / pub with prices not much higher than trendy city centre haunts in other towns. Parking can be pricey / hard to come by but that is compensated by having probably the best public transport in the country.
However property is a major issue. I commute from the moon and have contemplated buying a pied-a-terre (2 bed - 1 room to rent out) but find it really hard to justify the costs, probably around £350-400k for something not special in the east.
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No, because they'd be taxed even more in the process of converting.
Don't think a drop will help you in terms of upsizing as much as you think. Mortgage requirements will be made stricter, and you will struggle to find a buyer for your own property. Will only help those who are cash buyers really.
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It would, likely massively so.
If prices fell back to Monopoly board levels, it'd only be £340 to move from Old Kent Road to Mayfair.
Caporegime
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not really.
lets say his current house is £200K and the house wants to move into is £300K.
the market crashes. his house is now worth £150K. the house he wants to move into is now worth £250K. he still has to make up the £100K shortfall in both scenarios. except in scenario number 2 banks stop lending so he has to end up going with a different lender on a higher interest rate.
the only people who win from a crash are first time buyers or investors looking to buy on the cheap.
If the property he is selling loses a quarter of its value, it seems reasonable to assume the house he is buying suffers the same fate and is thus priced at £225k not £250k. So he'd only have £75k shortfall to make up. He'd also be paying less stamp duty on the purchase, and possibly lower commission on the sale of his property.
Yes it is possible for the the more expensive property to be impacted less (or more) but on average that is what one would expect.
I'm neither FTB nor investor but I too would benefit from a crash, I want to move to a bigger house in a more expensive area but currently I find the cost hard to justify. It's about £600k for decent houses but slash that to £400k and much more appealing.
Yes it is possible for the the more expensive property to be impacted less (or more) but on average that is what one would expect.
I'm neither FTB nor investor but I too would benefit from a crash, I want to move to a bigger house in a more expensive area but currently I find the cost hard to justify. It's about £600k for decent houses but slash that to £400k and much more appealing.
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Although your maths are probably a little out.
If house 1 falls from 200 to 150, then thats -25%. Assuming its a "market correction", house 2 should fall from £300k to (100%-25%)=75% x £300k, ie £225k
So this way his need drops from £100k to £75k to scale up.
Typically the more expensive houses drop more, not the silly money multi millions houses as whilst they do correct as well they tend to be a different target market, but the higher end houses in the aspiration range tend to fall more than the lower end houses as these people tend to stop trading up far more than the guys lower down who often trade far more from necessity.
Although as your point also made, in times of turbulent house prices the market will slow dramatically. It then gets difficult as chains break when people have had enough in waiting and decide to stay put etc.
Lenders will also of course look at their lending fisk/profile, and the other factor often forgotten is that you are often frozen out of the market when you change jobs, house price corrections will often line up with significant job market issues (they tend to feed each other) so even people with decent jobs can get stuck as they are forced to move jobs due to other factors.