roadrunner

IMO I can't wait for this to happen. The market has gone OTT

http://www.thisismoney.com/20020725/nm51194.html

rr_ww

If it falls by 20%, does it mean it qualifys for Bungalow insurance

Sorry

sebastian

If it does I'll sell up and get a bigger house.

roadrunner

Oi - no muppet jokes on this thread thank you

roadrunner

I reckon that prices will fall by some margin. Doubt it will be 20% though be more like 35.54%

fatherpierre

But Seb, this would mean the house you'd be selling would be worth 20% less too!

Steve Perriam

hoo-fecking-ray

sense at last.

i'm not buying a house cos of the stoopid prices.

gonna wait til it calms down. which it has to.

1st time last friday in the local paper it had some house listed as either

'new price' or
'price reduced'



certainly think that 10% minimum and more like 20% should be knocked off the ridiculous prices being expected.

roadrunner

BBQ Steve - thought you guys lived in tents down Devon All you have to do is wait for the summer sales - You get 50% off


[Edited by roadrunner - 7/30/2002 10:31:36 PM]

stevem2k

IMO the squeeze is going to be worst ( or best depending on your current position ) in those properties purchased recently as buy-to-let ~ generally 1 or 2 bedroom flats & small houses.

Prices have been chased up for these properties by those seeking easy money & it doesn't take too many months where the landlord has to pay the rent out of their own pocket for them to start getting twitchy. As more of them bale out for whatever equity profit they can grab, the prices for an area can go down just as quick - and it will be the borderline ones that go first.

Steve

rr_ww

Sorry Road Runner

The easiest way for the prices to drop to a sensible level, is for the Building Societies and Banks to stop lending people so much money! How amny people are on a combined earing morgage of 5-8 times their annual wage! If they only ever offered 3-4 times that then house prices would have to come down or the sytem would grind to a halt.

However, as this is how the companies make the money I cant see it happening too soon!

Richard

Dracoro

I've just sold (well this week) my flat after making 40% in the last year & a half in anticipation of this happening. Shrewd or stoopid? I'll have to wait and see.

fatherpierre

Shrewd!

I'm looking to buy soon, but will rent for a year I think 'til the **** (hopefully) falls out of the market.

uncle buck

That's just one dumb tw@t's opinion - don't believe the hype....

[Edited by uncle buck - 7/30/2002 11:19:29 PM]

dsmith

May happen in some of the sillier areas of london but wouldnt expect that fall to be seen elsewhere - without a significant rise in interest rates.

he makert is still moving (slowly) so even a slight drop would stimulate some movement. Agree that buy-to-letters bailing may give some extra momentum to the lower end but it will be fairly biref. *imho* if the governemnt was serious about curbing house prices - they'd make some attempt to persuade lenders to lend less and tax second home owners and those buying to let to the hilt. Returns would fall and more low end properties would become available - but would this simply push rents up making it worse for people on the start of the ladder ?

Deano

fatherpierre

My g'friend recently moved out of her rented flat and I got talking to the old, Sikh geezer that owns her old place along with 250 odd other flats across London.

His advice was not to buy anywhere in the next year. But, since this conversation prices seemed to have gone up a bit!

Anyone got a decent crystal ball for sale?

chopper

Obviously absolute rubbish as usual. Speaking as a typical young London house owner who has watched and played the markets for 10 years now - this kind of speculation is a bit like saying an asteroid will hit the earth in 2019. Doh! No disrespect intended mind you roadrunner.

Tiggs

load of cobblers.

Dracoro

Right, c'mon roll up.
Everyone who owns a property say 'Rubbish, twaddle etc.'
Everyone who doesn't own a property say 'Gonna happen, has to etc.'

---

I've kinda had to sell my london flat so I can keep travel/working/contracting and not have the burden of paying a mortgage/sort out renters etc. Someat I had to do to give me flexibiity esp as I'm not in London/UK anymore.

MarkO

Have to agree with this. The rises will undoubtedly slow down or stop. There might be a minor adjustment (2-3%) but even that's looking unlikely now, what with the state of the markets, a potential rate cut looming and the current low unemployment, etc.

Anyone who thinks that house prices are going to drop by 20-35% is just scaremongering. The guy who wrote that argument seems to be totally forgetting that even if there is 'gloom' in the city, there's still a massive shortfall in housing in the City and the rest of the SE.

Having said that, I'm hoping he's right - a 35% nationwide fall in about 6-8 months' time would suit me just fine.

Tiggs

find ANY housing development in the SE.....now find one that hasnt sold all the plots before the walls are 4ft high! not easy!

T

roadrunner

Chopper - No offence taken

Marko - I used to work in the City so I know the state of play down there How can I be scare mongering. I didn't write that article about house prices falling so don't shoot the messenger and if any one believes a "non-housing expert" that the house prices are falling to 30% then they should apply for dumb'n'dumber 2

IMO I would rather see prices settle down than tumble because it would be affect my business. I need happy customers wanting to spend money not depressed customers thinking about their negative equity. But I do know this. With every positive there will always a negative

MarkO

I wasn't shooting the messenger. When I referred to the bloke who originally wrote it, I meant the guy who penned the article, not you.

mbc

i will believe it when it happens

Vate

How many of the recent buy-to-let bandwagon are actually landlords?
Very few. When rents continue to come down due to oversupply and watertanks burst or similar the idiot muppets trying to make a quick buck will come unstuck. A few lucky/shrewd people will take the capital gains they have made realise them pay their tax and see a small profit against the set up costs of a buy-to-let. The majority will probably be left crying. A lot of the recent people jumping on the bandwagon have the same sort of mindset to those who piled into tech stocks etc. They believe in the opportunity to make huge returns without any risk. The only difference is that before they expected a big ahort term return whereas this time they expect a long term reward in the shape of a property asset paid for by someone else. It is an old addage but there really is no such thing as a free lunch. I doubt there will be a crash in property prices more likely a 'death by 1000 cuts' fall in values.

JoeyDeacon

Vate,

A friend of mine is doing exactly that at the moment. Buying two more houses for 157K and 120K to rent them out. Only problem is he doesn't have a deposit so is borrowing the 70K needed. I think he is borowing 60K against his current house and borrowing the other 10K on his egg credit card.

He sees it as a licence to print money and keeps going on about how he will own properties worth £450K

He is doing it as a long term investment not hoping to make a quick profit but I still think it is damn risky. I asked him what he would do if interest rates went up to 6 or 7% and he just replied that it will never happen.

MarkO

LOL. What a plonker. Sounds like he's into negative equity before he's even started, which is a recipe for disaster.

As for the comments about rates, I'd bet my hat that they won't get into double-figures in the next 12 months (or longer). But I've made absolutely certain that if a 747 hit parliament tomorrow, or something else similar happened which kicked up an economic collapse, that I'm able to cover my mortgage even if interest rates do breach 10% again.

care3

[Edited by care3 - 7/31/2002 6:16:32 PM]

ADP

I would love this to be true, but this is just ONE mans opinion.

I do think the market has probably peaked now, however as for taking a dive? well I think it may fall a bit.

Dave Thornton

Nobody's mentioned seasonal changes. The market always peaks in July. But the fact is that the longer you stay in property the more you will make. Also, there is no relationship whatsoever between property and investing in Tech stocks. Property prices are being driven up by supply and demand. If we all sold our properties like Tech stocks the market would collapse, but we'd all have nowhere to live.

Vate

Thanks Dave,
If you actually read the post I didnt mention anything about a relationship between tech stocks and real estate as assets.
I merely implied the behaviour of amateur investment strategy undertaken by people on the back of a bubble, be it in tech stocks, property or anything else.
Of course it is likely that property prices are liable to stabilise and decline slowly unless all the buy-to-let folks decide to sell at the same time (not likely). If one looks at the collapse of real estate values in Japan the fall continued over a prolonged period of time and people who were forced to sell to meet other financial obligations had a hard time deciding when to sell as the amount of pain they could realise became greater and greater. People sometimes can't help but wait for the corner to be turned. Unfortunately sometimes it is not.
One thought. If people end up in the situation where their loan may be called by the bank and the equity in the property doesn't cover the debt then I reckon banks will start restructuring rather than repossesing. Your loan may become everlasting.