<Dads army>

We are all dooooooooooooomed

</Dads army>

One of the UK's most respected money men has forcast the slump over next coupla years. Apparently house prices in London have already started to drop.

I have already calculated what a 30% drop in prices on my two houses would be and I'm luckily still in very good positive equity on both. I guess a lot of people will not be so lucky if they bought expensive houses recently..

 

Sounds good to me. Stand to lose a bit of money, but it'll be a good opportunity to move up the ladder

 

I guess that's an easy thing to "predict" after the increases we've seen in recent months, to be honest.

With the new Governor of the Bank of England (Mervyn King) a lot more hawkish than outgoing Eddie George, there's a strong possibility that the next interest rate move will now be up, rather than down, as had been widely anticipated.

Having said that, you can find plenty of people who will tell you that the only reason the UK economy is holding up is because of the perceived "wealth" effect from appreciating house prices. Take this away, they say, and the pack of cards collapses...

 

> I guess that's an easy thing to "predict" after the
> increases we've seen in recent months, to be honest.

Yep - agree totally. Last week there were predictions of low rises for the next 2 years, this week its a 30% drop.

The guy who gets it right will be able to claim that he predicted it, while those who got it wrong will be forgotten - there's no downside to making a spurious claim...

 

But, on the other hand, people reckon it will still keep going up...

 

Hehehe, just bought a house Chris...??

 

well i just hope they do drop and drop soon cos they are so ridiculous i am not even entering the market atm.

something has to give sometime.....but how much and when is the 64k question.

keen to buy, buy wont pay the prices being asked esp if a drop would then put me in a negative equity position or interest rate hike make payments difficult.

 

Saw this this morning - it was up by 12% in the next year then a drop of 30% over the next three years they reckon, although London's started already and the rest of the country is set to follow them.... however I believe the figures were quoted as " a bit optimistic for the next year and a bit drastic for the following years" - so they think it's a bit exaggerated...still, I'm glad I've got somewhere to live at least, I'd just be paying a landlord otherwise

 

Oh, and based exactly on those figures - our house would still be worth £848 more than we paid for it

 

I would break even!

 

Tel.

Nope. I have zero exposure to the propery market, so I'll be quite happy if it dives a bit just in time for me to buy...

 

Likewise... i sold up earlier this year and i'm just hoping/waiting for the prices to drop again before I buy. Just hoping I get lucky soon cuz i'm not too keen on this paying rent caper.

 

I heard this on the radio today and they said:

"Prices in *some* parts of London have started to fall"

"*Some* experts have said that house prices *may* fall up to 30%"

Seems like ifs and maybes to me!!!

House prices will fall anywhere just inside or just outside of the conjestion charging zones!!! Who wants to live somewhere where they can't afford to park their cars, or drive about their local areas, or where all the spaces are full of commutors, or where they won't be able to use public transport as it will be full of people (and the infrastructure unable to cope with the increase in demand!!)????

 

As long as yu can afford to stay put, then the ups and downs don't matter that much. I am just about to buy a house (after not moving for three years cos I kept saying - oh this bubble will burst soon ) So I might be paying more than if I waited another year, but by then the price of the place i'm selling would go down, and interest rates would be up so it would probably end up costing the same. As it is I've got a fixed deal for 5 years, and by then things should have sorted themselves out in any case. Well that's how I justify paying these ridiculous prices...

Charlie.

 

In my unqualified opinion prices will drop, there is no question about that and probably by more than 30% in the SE as we have seen a growth in the last 6 years of over double and prices are just not sustainable at the level they are at now.
The big question I think is not "if" but "when" it happens, will it be an overnight slump or a more long term thing.

ian

 

Ian,

In fact, i'd say that house prices are sustainable at their current levels, if nothing else changes. The percentage of mortgage repayments to income is still not alarmingly high.

But what is different today from 1988 is people's personal debt, excluding mortgages. It's a lot higher. So any threat of a downturn in the economy will put an end to the rampant consumer spending we've seen over the last year or so, thus having a knock-on effect in the property market. Like all these things, the public's perception is key. If that falters, nothing anyone can say, even estate agents (), will keep prices at these levels.

 

History is a great educator, Those who ignore it do so at their peril. House prices will stagnate before they drop - They are already doing this so its just a matter of time IMHO.

I think that many people will catch a cold. Estate agents, Builders, etc
I personally hope things don't stay high as I want my kids to be able to afford to get a place of their own when they are old enough. It doesn't look likely at the moment.

 

Ok so house prices will drop.... nice for me
No doubt the morgage rates will go up though, and while you can get a fixed rate morgage at 2.5-3% just now it could rise to 5% or more and that should level things out a little.

Tony

 

I think it depends on where you are.

We have seen a hefty increase in prices in lincoln over the past 5 years,more in the last 10 months but lincoln has a lot more going for it than it did 10 years ago,new university constantly expanding over 5000 new students spending their borrowed money.Industrial sites being built,new business's,dual carrige way to newark being built,new ring road go ahead, big shortage of houses for sale.

You can get decent terraced houses in the city for 70/80k and 3/4 bed detatched in nice villages starting at 120k odd.At these prices i think they are good value and not really over priced as the area has a lot going on unlike the crash we saw here 12 years ago when i thought it was overvalued and would not buy.

There is a shortage of houses for sale with people queing up to buy each house so there will always be someone willing to pay the price so long as its not silly money ,also lincoln is a nice low crime area offering good value compared to other areas and people are moving into the area bacause of this.

 

Terraced houses round here start at £15k/£20k!

 

My brother in-law bought one in Stoke for 5K.
He paid for it on his credit card....LOL

 

They start at 40 odd if you are lucky and dont mind a bit of work.

Year ago 30's maybe bought one 35k exactly year ago spent less than 1.5k tidying,new doors,central heating, decorating etc,nice house now,people queing up for these over 60 now and still good value imo though.

Where abouts are these cheapo's,is there a college or uni near by and whats the area like.

Cheers Paul

 

I may move to Billing Aquadrome and get a static caravan, at least I'll get a parking spot at the next jap car show.

 

I used to live near billing aqa,local village was wollaston and grendon,now prices were getting silly there 2 years ago.

 

Paul,

There's lots of terrace houses in Stoke-on-Trent. Some areas like Shelton are student-land. There's the Stoke campus of Staffs Uni, as well as Stoke-on-Trent College. Large ethnic population as well.

 

Chris,

What is the area of shelton like?

I worked with some lads from stoke over the summer they came from an area called mere said it was a bit dodgy and dont visit them in the scoob!!!!

 

I went to college there and, IMO, it's no worse than any other student area. That said, S-o-T station is there and I never left the Scoob in the car park when I go down to London on the train.

In fact, compare Shelton to where my Sis lived in Bradford whilst at Uni and it's positively upmarket...

 

Cheers Chris,

Will have a look on the net at houses there.

 

I agree, property elsewhere in the UK represents far better value than the south east.

I recently bought a couple of houses in Cleethorpes for about 32k each, to rent out. Same house in London = 320k , utter madness!

 

Alarmists

Hey guess, what, in 1972 you could buy a house for a couple of grand. 5 years later the same house was worth £20k and yet people somehow managed to be able to buy houses, and so did their children, so let's just calm down a little, shall we?

Prices have started to level (or "stagnate" if you prefer ) but the foreseen collapse probably won't be as bad as suggested (South-East excepted, but then if you buy a bed-sit for £200,000 you get what you deserve j/k).

Personally, I bought my 3 bed detached house in an "up and coming" area for £48,500 and had it valued at £100,000 last week, so even with a 30% drop, I'll have plenty of equity in the property.