Property Price Crash Incoming?

Mercenary Keyboard Warrior · 10 Jul 2017 at 13:23

HangTime said:
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.

I can t see house prices falling that much, but god help us if they do, thats so significant a fall we will be in deep **** generally at that point.

If house prices fall too much then significant numbers end up in negeq, and at that point the market really struggles.
Many can't move, many don't want to risk moving, lenders will be super cautious
The only people moving will be very cash rich/very MTV, those forced to move, eg redundancy downsizing/relocating

Will be back to the days where people are looking for reposessions, due to cheapness and the fact there dont get bogged down in a chain!

chroniclard · 10 Jul 2017 at 13:32

The last "wobble" helped us up size. We owned a 3 bed semi for about 4 years and the price wobble caused it to basically be worth the same as it was 4 years ago. However the properties above also decreased in price a fair bit. We managed to sell ours quite quickly and bought a bigger house.

Though we did kind of get lucky as the owners of house we bought were getting divorced and hated each other, needed a quick sale.

That was just a small downturn though and not a crash as such.

HangTime · 10 Jul 2017 at 14:30

Mercenary Keyboard Warrior said:
I can t see house prices falling that much, but god help us if they do, thats so significant a fall we will be in deep **** generally at that point.

I don't recall it ever happening. In 2007-8 there was a slump of around 20% but it recovered relatively quickly (5 years). The previous crash of the late 80 / early 90s there was a more prolonged period of stagnation but again the absolute fall from peak to trough was only 20% or so (although inflation / interest rates were very high which exacerbated this a bit). In my lifetime I don't think there has ever been a genuine nationwide crash in the way I would define it or talked about here (40%). The 90s situation although very tough for home owners probably wasn't that great for buyers due to the lack of a massive downward spike in prices.

Glaucus · 10 Jul 2017 at 14:36

ting is interest rates were lowered and are still low, there's not much wiggle room left if it happens again anytime soon.

Skillmister · 10 Jul 2017 at 15:19

I'm not even considering it, whether that's wise or unwise I don't know, but I feel either way I'm going to be better off buying than renting. I'm in the fortunate position as a first time buyer of going in at around 80% LTV (25yr) so it would have to be substantial to put me in negative equity and if it's that bad there are going to be a lot of people a lot worse off than me (I have clients for instance who are the same age as me but getting a 90% 40 year mortgage for 3.5x more than me :eek:

)

chroniclard · 10 Jul 2017 at 15:26

40 year mortgage!? jeez.... :eek:

MikeTheNative · 10 Jul 2017 at 15:35

House prices definitely not coming down where I live. GF bought the house about a year and a half ago for £145k. Probably would get £200k now.

Freefaller · 10 Jul 2017 at 15:42

Well if Zoopla is to be believed our property has increased by at least 20% in a 16months. Does this mean a crash is due? Not sure. Our area (home counties-ish) is certainly growing in popularity and prices are going up everywhere.

Skillmister · 10 Jul 2017 at 15:47

Freefaller said:
Well if Zoopla is to be believed our property has increased by at least 20% in a 16months. Does this mean a crash is due? Not sure. Our area (home counties-ish) is certainly growing in popularity and prices are going up everywhere.

If Zoopla is to be believed the house I went to view last week which is on the market for £93,000 is actually worth £135,000, which is more than the mint condition ones with an extra bedroom or 2 on the same street are selling for

And the one I'm likely to buy for £110,000 is actually worth £68,000!

Freefaller · 10 Jul 2017 at 16:06

Ha! Well that answers that then! Which I wasn't believing anyway - but thought it rather intriguing.

That said, 2 houses on our street sold in the last couple of months sold for about 30k more from when they went on the market over a year ago (they were taken off the market and put back on).