Who thinks the property market will crash
30 October 2003, 04:29 AM
#2
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Not sure about a crash although I find it difficult to believe it will continue the way it is. Property prices are just crazy in the UK.
I`ve been in Canada since February, the sort of houses you can get here for the price of a three bedroom semi is unbelievable.
I`ve been in Canada since February, the sort of houses you can get here for the price of a three bedroom semi is unbelievable.
30 October 2003, 06:21 AM
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It wont really effect me so I don't care - although every thread I have seen goes like this...........
People who are buying hope/think it will crash, people who have property with a big mortgage hope/think it wont.
People who are buying hope/think it will crash, people who have property with a big mortgage hope/think it wont.
30 October 2003, 07:40 AM
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Short term, The rate of growth will slow down or even cause prices to fall slightly.
Long term, no.
There are more people who need a house than houses available. So according to supply and demand how can they ever come down until the supply meets the demand?
We either need to pump everything into building more, over the next 10 years or recognise that, for the ordinary guy the days of owning your own house are coming to an end.
Long term, no.
There are more people who need a house than houses available. So according to supply and demand how can they ever come down until the supply meets the demand?
We either need to pump everything into building more, over the next 10 years or recognise that, for the ordinary guy the days of owning your own house are coming to an end.
30 October 2003, 07:47 AM
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Whatever you do, don't ask Roger Bootle of Capital Economics!
He's the biggest UK property market bear out there, and is predicting some rather unpleasant times ahead, backed up by some rather compelling evidence, if statistics are your thing.
The next interest rate hike by the Bank of England could be a bit of a catalyst.
He's the biggest UK property market bear out there, and is predicting some rather unpleasant times ahead, backed up by some rather compelling evidence, if statistics are your thing.
The next interest rate hike by the Bank of England could be a bit of a catalyst.
30 October 2003, 07:50 AM
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Interest rates are only going one way. When they rise lots of people will suddenly realise that they have overstretched and when that happens the bubble will burst. It's not complicated economic theory, just common sense.
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30 October 2003, 08:20 AM
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Surely a crack dealer is the only type of person that would actually want to live in central London?
30 October 2003, 08:31 AM
#10
Crash? Yes.
When? Don't know
It is indeed about supply and demand. Demand side is being driven by [investment] greed and not the need for people to buy somewhere to live. Once the market starts to look wobbly there will be a hell of a lot of sellers out there trying to cash in their unrealised gains before it all turns sour. I would expect the supply will overtake demand fairly rapidly and prices will fall rapidly to tempt 'real' buyers. Once prices start to fall, new 'investors' will probably stay well clear!
Good luck.
Suresh
When? Don't know
It is indeed about supply and demand. Demand side is being driven by [investment] greed and not the need for people to buy somewhere to live. Once the market starts to look wobbly there will be a hell of a lot of sellers out there trying to cash in their unrealised gains before it all turns sour. I would expect the supply will overtake demand fairly rapidly and prices will fall rapidly to tempt 'real' buyers. Once prices start to fall, new 'investors' will probably stay well clear!
Good luck.
Suresh
30 October 2003, 08:36 AM
#11
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I can see a small downturn in prices over the next 2-5 years starting in December 2003. However I dont see a crash in the proportions we've seen in the past. I am predicting (and hoping) that property prices won't fall to less than 90% of their current value. Regional variations are inevitable and I see London and other cities that have seen unprecedented rises in prices taking the biggest hit in terms of residual value (% wise).
That reminds me I must go and sort out a new fixed rate on both my mortgages!
Fingers crossed - although one benefit of a reduction in prices will be the better buy to let profit margins. Swings and roundabouts if you ask me.
That reminds me I must go and sort out a new fixed rate on both my mortgages!
Fingers crossed - although one benefit of a reduction in prices will be the better buy to let profit margins. Swings and roundabouts if you ask me.
30 October 2003, 09:01 AM
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Ok - even if there is a crash, it will be followed by a recovery. The only people who will suffer are those looking for short term gain or people who massively over burrowed. Anyone see interest rates going much above 5%? If not, then house prices as they were 12 months ago will be sustainable IMO.
30 October 2003, 09:04 AM
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"Anyone see interest rates going much above 5%"
YUP - thats why I'm sorting out some fixed rate deals as we speak!
2 x 3 bedroom semi's went for £350k (each!) down the road from me about 6 months ago!
YUP - thats why I'm sorting out some fixed rate deals as we speak!
2 x 3 bedroom semi's went for £350k (each!) down the road from me about 6 months ago!
30 October 2003, 09:23 AM
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do a search on this subject and laugh at all the bears who said CRASH every time the question is asked.
some of the proffesional bears are now so desperate to excuse their ramblings of doom and gloom that they are blaming the recent case of advisers egging ppl into false income statements to get bigger loans!!! "ooh nooo, we were right....if it hadnt been for the advisers the market would have crashed....those pesky kidddds"
some of the proffesional bears are now so desperate to excuse their ramblings of doom and gloom that they are blaming the recent case of advisers egging ppl into false income statements to get bigger loans!!! "ooh nooo, we were right....if it hadnt been for the advisers the market would have crashed....those pesky kidddds"
30 October 2003, 09:29 AM
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Take a look at the swap rates, banks can still do deals where they lock in the right to pay 5.25% fixed and recieve floating (so linked to base rate effectively) for 20 years! If rates were a sure thing to go up then we'd(us bankers) all rush into this trade and make a mint...so the market doesn't really anticipate any great rise in rates.
Saying that I've just got rid of my 'extra' property as I don't see the return being too worthwhile over the next few years once 40% capital gains and income tax is taken into account. I'd love to see a price crash like the good old one of 1989ish.
Chuck
Saying that I've just got rid of my 'extra' property as I don't see the return being too worthwhile over the next few years once 40% capital gains and income tax is taken into account. I'd love to see a price crash like the good old one of 1989ish.
Chuck
30 October 2003, 09:34 AM
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PC, theres speculation (as there will always be) that rates are likely to steadily rise for the next 10 (yes TEN!) years. However I think its likely to be a shorter downturn but possibly getting to the same point in 5 years.
MHO is that I think rates will make an initial jump of say .5% and then rise at .25 every 3-6 months. Overall I can see rates topping out at 7-7.5% worst case scenario but more likely it'll be 6-6.5.
I'm hoping to get 2 fixed rate deals on 2 properties at around 5-5.5 tops fixed for "at least" 5 years just to be safe. As one of these will be a buy to let arrangement I might not get what I'm after ideally. I'm after anything that gives me peace of mind for the forseeable at a reasonable cost.
I could be horribly wrong and end up paying over the odds but stick with something that has a reasonable early redemption penalty and I'll still be happy.
MHO is that I think rates will make an initial jump of say .5% and then rise at .25 every 3-6 months. Overall I can see rates topping out at 7-7.5% worst case scenario but more likely it'll be 6-6.5.
I'm hoping to get 2 fixed rate deals on 2 properties at around 5-5.5 tops fixed for "at least" 5 years just to be safe. As one of these will be a buy to let arrangement I might not get what I'm after ideally. I'm after anything that gives me peace of mind for the forseeable at a reasonable cost.
I could be horribly wrong and end up paying over the odds but stick with something that has a reasonable early redemption penalty and I'll still be happy.
30 October 2003, 10:28 AM
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greedy gordan will not let the bank of england put intrest rates up to much as it would ultimately cost him in stamp duty etc if the housing market slows down
i dont care my mortgage is only 22k
i dont care my mortgage is only 22k
30 October 2003, 10:33 AM
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Just seen the money programme last night about how many mortgage 'advisors' are telling people to lie about their earnings on a self-certification mortage which the building society doesn't check up.
This is a major problem right now, and could be a contributing factor to how people continue to buy more and more expensive housing - artificially raising house prices in the short term.
Long term it could lead to a nasty crash.
This is a major problem right now, and could be a contributing factor to how people continue to buy more and more expensive housing - artificially raising house prices in the short term.
Long term it could lead to a nasty crash.
30 October 2003, 10:36 AM
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It is a fact that property prices are at a ridiculous level compared with incomes. Cheap interest rates of course have encouraged that and the rest of the dreadful debts people have due to over borrowing.
The interest rates may well go up I think, the Bank of England has control of that, and then people who are struggling to service their debts now will have a very hard time. Property prices will fall then because the house market will drop away.
Les
The interest rates may well go up I think, the Bank of England has control of that, and then people who are struggling to service their debts now will have a very hard time. Property prices will fall then because the house market will drop away.
Les
30 October 2003, 10:55 AM
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No crash will happen, a slow down certainly will occur though. Demand far outstrips supply and that is not as someone suggested caused purely by investors.
I am currently looking at places at the moment and the lack of affordable housing in the south east, ie below 200k in my case is ridiculously low unless you want a flat or maisonette. New housing is not being made available unless you want to pay £350k+ for a nice new house
or live way out from London (60 miles +).
For all those who insist their is going to be a crash, I'd like to know when you think this will happen? Ask all the people who have been holding off buying for the last 2 years+ due to crash rumours as to their thoughts on what they could have bought then to what they can buy now!
The economy can not afford a property crash the same as it can't afford a fast rise in interest rates. It simply cant and wont happen. If the economy heads further back into recession then unemployment will rise dramatically and the Government just isnt going to let that happen, no matter who is in charge.
I am currently looking at places at the moment and the lack of affordable housing in the south east, ie below 200k in my case is ridiculously low unless you want a flat or maisonette. New housing is not being made available unless you want to pay £350k+ for a nice new house
or live way out from London (60 miles +).For all those who insist their is going to be a crash, I'd like to know when you think this will happen? Ask all the people who have been holding off buying for the last 2 years+ due to crash rumours as to their thoughts on what they could have bought then to what they can buy now!
The economy can not afford a property crash the same as it can't afford a fast rise in interest rates. It simply cant and wont happen. If the economy heads further back into recession then unemployment will rise dramatically and the Government just isnt going to let that happen, no matter who is in charge.
30 October 2003, 10:57 AM
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Saying that I've just got rid of my 'extra' property as I don't see the return being too worthwhile over the next few years once 40% capital gains and income tax is taken into account.
Where would I stand? I have a property which is fine and my fiancee has a flat. If we sold the flat, would she be liable for the tax, even though it is in her name and the only property she has a mortgage against?
30 October 2003, 11:05 AM
#28
in the south east im pretty much boned, a mate just bought a 1 bed flat with his fiancee, for around 120k, what chance does a first time buyer have??
now once my gf finishes uni (end of the year), and gets a job we can start to think about moving out. House prices are crazy.
now once my gf finishes uni (end of the year), and gets a job we can start to think about moving out. House prices are crazy.
30 October 2003, 11:32 AM
#29
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In the words of Bob Dylan...
"there's a hard rain a gonna fall"
All these tw@ts swanning about in their expensive 4 x 4s who are 2nd mortgaged up to the eyeballs just in order to 'keep up with the Jones's' (who are also in debt to their limits) are going to catch cold badly.
UB
"there's a hard rain a gonna fall"
All these tw@ts swanning about in their expensive 4 x 4s who are 2nd mortgaged up to the eyeballs just in order to 'keep up with the Jones's' (who are also in debt to their limits) are going to catch cold badly.
UB
30 October 2003, 11:35 AM
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"All these tw@ts swanning about in their expensive 4 x 4s who are 2nd mortgaged up to the eyeballs just in order to 'keep up with the Jones's' (who are also in debt to their limits) are going to catch cold badly."
Good, I'll be there laughing at them as they are hopefully turfed out onto the streets. About time people like that had a reality check.
Good, I'll be there laughing at them as they are hopefully turfed out onto the streets. About time people like that had a reality check.