PeteBrant

I wouldn't worry.


The Market is going to take a downturn, that much is inevitable. However, it will recover. If you look at the entire picture since the 1920's the rise is consistant - even with a drop every so often. In other words, it always rises more than it drops.

Worse case, you will have to put your plans to move on hold. Your property will drop in price - but it will recover and then some.

The Snug Rhino

lol - yeah...please do that and report back in a year when house price inflation suffers another fall and only grows by 5% (still outperforming your net return in the bank)

GOLDMAN 555

House prices in Britain are overvalued by about 30 per cent, HSBC said yesterday, sounding the alarm that the property market could suffer a similar slump next year to that experienced in the United States.
The alarming report from the bank’s chief UK economist, which gave warning that the coming property downturn would cause the pound to plummet and force the Bank of England to cut interest rates aggressively, came as official data revealed the fastest fall in London house prices for more than two years.
HSBC tried to model the fair value of housing based on expected future rental growth. Karen Ward, the report’s author, said: “There is around 30 per cent of the current house price level that cannot be explained.”
The findings echo those of the International Monetary Fund, which last month calculated that homes in Britain were overpriced by up to 40 per cent.


Que state-controlled media (BBC) press release any day now about the population exploding beyond all belief and huge house demand expected.....

rossyboy

iTrader: (8)

A bit of a sweeping generalisation that. Scotland is a big place

Example, here in Aberdeen a 1 bed flat in a nice area will cost you £130-140k. Average house price is currently above UK average.

Inverness is similar and Edinburgh is worse.

EddScott

Wheres that ignore button.

rossyboy

iTrader: (8)

Edit

POC

I dont see it myself, we completed on our house 3rd August, did a little work and had it re-valued last week at some £50k more. Some of this would be due to the work, I'm convinced most of it is down to the market as we didnt buy cheap and all the houses in the area have risen 20/30k in the same timeframe.

If I were buying now, I couldnt afford my own house lol.

davegtt

Thing is though, the houses are only worth what people are willing to pay so how anybody can say theyre 40% overpriced is beyond me.

As you said in your last paragraph, supply and demand

GOLDMAN 555

BBC NEWS | UK | UK population may double by 2081

This is getting far too obvious.................. when will they stop making us pay for this brainwashing BS

There are not only more security cameras in the UK than North Korea I would wager that the media is less biased!!!

Terminator X

iTrader: (7)

Hilarious! Are you really predicting that the average house price will match your chart?! £170k today vs £80k in 2008 You have a screw loose mate.

TX.

Edit - just noticed that it's wrong anyway! It must have been created in 2005 as it has 2005 at an average of £170k then shows prices dropping away to £80k in 2008. Last couple of years have put a dampner on your prediction already!

Matteeboy

TX - Well a very well known business editor was predicting worse than that on R2 the other day.

I think Pete put it very well.

The Snug Rhino

oh i'm not going to ignore you i want to read all about how you go looking for a house in 2009 with £70k (plus a years interest from the bank.....which will not even cover your moving costs) and find you now live in a smaller house in a worse area!

Mitchy260

True but Edinburgh is still 'cheap' in comparison to the 2 other capital cities Cardiff and London.

Aberdeen must be only 1 of a handful of cities in the UK where its more affordable to buy than it is to rent due to the oil industry. You can still get a new 4 bed in the £200k region in Aberdeen if you look hard enough. I just paid £176k for a new 4bed about 20miles from Aberdeen.

Down in the SE/SW double this amount. Scotland as a whole is more affordable than the madness in the south of England.

I personally think the prices will stagnate or drop a little in the south whilst the north catches up Well here's hoping anyway

MJW

Looking at that graph, I think I'll sell my house now, rent till 2009 and buy myself a nice 4 bed detached for £60k, I'll make a killing !!!

Myles

iTrader: (40)

Its as simple as this (not good for the guys waiting to buy their first place but there you go). If you have a place you should look at it as a long term investment. Keep it and the value in the long term will rise. If you can rent it as you never see rental prices drop, allow that to pay your mortgage and bobs your uncle, you dont lose anything. (Of course you have to have somewhere to live when you rent your place!)
The people who ensure the economy rolls along nicely have too much to lose from allowing the house prices to drop, where do you think these people have their money invested?
Just my two penneth.

EddScott

Whereas I don't and won't pretend to know as much about the subject as you appear to, I find your arrogant posts very wearing. TBH, your probably right and I was only mentioning my thoughts whether you see them as right or wrong, the manner in which you chose to reply I find rude.

Thanks anyway

Trout

iTrader: (1)

More sad reporting from the victim.

Maybe you overlooked todays top story on the BBC

UK property market 'turning down'

But there again they are only reporting the findings of what you described last month as an irrelevant lender.

Maybe one day you may even notice the continued reporting of potential or actual downturns in the BBC reporting over the past couple of months

fast bloke

I don't remember anyone saying house prices wouldn't drop, but there are plently (including myself) who believe that they won't crash. It depends how you define a crash. A 40% drop in Northern Ireland will see us back to prices from last December. Not brilliant if you bought your house in October, but if I had forecast in December 2006 that prices would stagnate for 2 years, I would have been entirely wrong in the short term and entirely correct in the long term.
As it stands now, I can see a large drop in the South East, a large drop in Northern Ireland and a small drop or stagnant pricing in the rest of the country.

If you are 'guaranteeing' that there will be a 'hell of a crash' can I take it that if I sell my house now and can't buy it back at half the price within the next 2 years, that you will make up the difference. Isn't that the sort of thing you usually mean by 'guarantee'?

Matteeboy

Agreed.

Let's be honest - none of us can truly predict what will happen. Most on here got the current situation wrong already.
Getting angry but also wrongly smug is just irritating.

I'm glad we rent and have a decent chunk of savings but it's been many years of thinking we should have bought (I'm glad we didn't at the moment).

Petem95

BBC NEWS | Business | King says outlook 'uncomfortable'

Interest rates could well rise again due to rising inflation - we already have a significant number of factors which contribute to a fall in prices, so very big falls are very possible.

What people tend to also overlook is we are likely to see a sharp downturn in the economy as well, so it doesnt matter how many houses are on the market at 50% below their 2005 prices if you have no job and no savings!

EddScott

All I can honestly say is that thank god we don't have Thanksgiving over here. We'd be broke!

BBC NEWS | Business | Thanksgiving dinner cost 'up 11%'

Iwan

It's not my prediction.

What you're failing to grasp "mate", is that economics works in cycles, always has done and probably always will do.

The important bit is the pattern, and the way it repeats, rise - fall - rise - fall etc.

You're the one with the screw loose if you can't figure out that simple concept.

fast bloke

BBC NEWS | Business | Bank 'signals' interest rate fall

Same story - different translation

ThE RoChFoRd OnE!

ROFLMAO

GC8WRX

There has to be a crash sooner or later, when the teenagers of today want to buy a house in 5 years time but find themselves way off budget due to one bedroom flat costing 120k plus, and most earning less than 20k, no one will first time buy, which will **** up the market, we will all be like italy soon where children stay at home till an average of 28!!

I agree with house prices over valued by 30%, a one bedroom flat should be about 70-90k, not 120k for a mess that needs doing up!!!

And who said you can buy a 4 bedroom detached in the northwest for 200k, not where i live you cant, 200k buys a 3 be semi in a **** area of town where you wouldnt want to park a scoob!!!

Henrik

iTrader: (5)

Interest rates may well go down next year, but ask yourself why this would happen?

IMO if interest rates go down e.g. one percent next year, it's because the economy is in a very poorly state and needs propping up. Doesn't sound good for house prices.

On the other hand, if interest rates go up or stay the same, it's still crap for house prices going forward, as people wont be able to borrow enough to prop the housing market up (not without risky lending by the banks, which i think we'll see less and less of with the ongoing credit crunch).

Mitchy260

What do you mean in 5 years time? The young generation today can't afford it, never mind in 5 yrs time.

Also 'children' are already staying at home into their late 20's, early 30's right now in 2007. I have a whole circle of friends 25/26, still living with parents and UNABLE to move out due to their salary being no-where near enough, not even for a 1 bed flat!

Northwest? Northwest of what? Northwest can be classed as say Wigan and you can easy buy a 4 bed detached for 200k there. NE of Scotland, you can buy 4 bed detached properties in nice quiet areas for £200-220k if you look hard enough.

Scotland still have a lot of catching upto do to fall level with the south of England, hence why i really cant see property prices falling, in Scotland anyway.

Yes they're still expensive, but not in comparison to the south east/west

Matteeboy

The market doesn't give a stuff if young people can't afford a house.
However it DOES give a stuff when "grown ups" can no longer get wildly inflated mortgages, repossessions rocket, banks will only lend to "real" borrowers and market confidence plummets.

I'm sure it will go up again - it always does. But I think this crash will make 1989 look fairly tame.

GC8WRX

Wages have not gone up in line with house prices! SIMPLE

PeteBrant

I have to disagree with that - Once the FTB market goes, the whole lot comes down.

The whole thing is a pyramid, with the FTBs at the bottom - What happens when your foundations suddenly dissapear?

Agreed, They never have - not since the 1920's anyway. The difference is that the long this goes on, the wider the margain between earnings and mortgate, until you get to the point where you are now with the national average wage being just shy of £23,000 and then averag ehouse price at just over £200,000 - A ratio of almost 10:1. High than it has ever been, and unsurprisingly, unsustainable.