TopBanana

We're talking about house prices. It has nothing to do with getting ill. If it's a concern, you buy critical illness cover. Completely irrelevant.

Predicting the future of house prices has everything to do with economics you thick ****.

molko

No need to resort to swearing, i fear i have touched a nerve.....

Oh and you are still incorrect, i suggest you look up the definition of 'economics', now run a long little man

davegtt

Nope, house prices need to drop by a long way to put me in negative equity so being clever isnt working on that front. Im telling you now house prices will not drop by 50% if the dropped by 30% every bugger will start buying them again and house prices will slowly climb again. Supply and demand is what its called.

TopBanana

'Being clever doesn't work on that front?' Are we speaking the same language?

Why 30% and not 10%, 20%, or 90%? The property market is driven by fear and greed, much like the stock market. When house prices were at their lowest several years ago, everyone was saying you'd be mad to buy a house, as they've been falling for several years and showed no signs of stopping.

davegtt

I was giving an example with 30% to show that there would be a significant decrease in property value to give people the affordable chance to buy a house. Think of the amount of people just waiting to get on the ladder. the second they drop by any sort of significant amount I can personally see people ignoring advice about dont buy and go and buy something. As with the thread starter hes had all the advice back in 2003 saying dont buy, look what happened when he didnt, there are masses of people just waiting to find a property that they can afford. Not hanging around hoping it'll come down more.

Thats my opinion of course, you are entitled to yours but if they drop 50% I'll eat my hat

Petem95

True, however they wont just fall 30% for no reason, otherwise like you say everyone would go out and buy.

If there was a deep recession, interest rates were higher, banks tightened up on lending significantly due to lots of unpaid loans, then there are going to be less people with the required purchasing power, so house prices will fall as a result. Lots of houses would probably hit the market due to people going bankrupt and having the home reposessed - adding yet more homes to a stuggling market - and basically it would make a bad situation worse, and it becomes a downward spiral.

But hey with Labour in control what could go wrong?!! Inflation is only 2% (yeah right ).... debt hasnt been propping up the economy or anything ( ) and hey just ignore those unemployment figures which have been rising monthly for 14months!

TopBanana

The problem with that is that people get scared to death when prices start to fall, and most people wouldn't dream of buying when the prices are on the way down - even if they are 30% lower. They're scared to death it wall fall further! This is why house prices move so much more than supply and demand would predict. In reality of course, buying after a sustained rise in prices is much more dangerous - and this is what the OP is proposing.

TopBanana

Damn straight! Don't forget unemployment has been kept artifically low by new labour employing hundreds of thousands of people (borrowing / devaluing our money to do so).

davegtt

Not if the intent is to buy and live in the house rather than see it as a short term investment like the majority of people have done in the last couple of years. Take the thread started for the mentality of the early 20's. They want to buy somewhere to live in and pay off as their own in 25 years....

Pete, I understand what your saying, at the moment property is fairly stable. Interest rates rising wont have a massive difference because a large portion of home owners are sat in fixed rate deals. OK it might take a while to make an impact when these deals run out but it doesnt nessisarily mean bankruptcy. What would you predict interest rates to rise to? On a repayment mortgage of £100k a 1% rise is £50. So its going to have to rise a fair bit before people lose their houses, the first 2-4% is just going to affect people in their social life, tightening the belts on shopping and selling the expensive car etc.... House is the one thing people try to hold onto the most. I cant see interest rates hitting anything like we say late 80's early 90's. Or can you?

KiwiGTI

A few of you are forgetting that the Government aren't going to sit idly by and allow you to get rich off property for much longer. They will want a much bigger cut.

TopBanana

In reality, it just doesn't work like that for most people. Fear and greed are the two thought processes, and they are experienced at exactly the wrong time (greed at the top, fear at the bottom).

Obviously bankruptcies will only affect the most overstretched, at first anyway, but it would still force prices down. Don't forget other costs are going up already - energy, council tax etc.

Freak

That is my plan precisely.....off at the tail end of this yr all being well.
I earn enough to get a decent mortgage- but the simple fact is, that I think property over here is now massively massively overpriced, and I refuse to pay that much for so little. Plus the fact I cant stand this country any more
Buying over here at the moment?