FlightMan

http://news.bbc.co.uk/1/hi/business/...ey/4844226.stm

Looks to me like this is the last tranche of desperate 1st time buyers, prepared to do anything to get on the ladder. When this source dries up, as surely it has to, the whole market collapses.

Anyone care to predict when?

Hanslow

From reading that, no time soon. In fact, is that even worthy of a news story? When we bought our first house about 10 years ago, we saved solid for 18 months. No holidays, no luxuries, used bike more than car, etc. If people expect to be able to afford deposits and fees, they're going to have to save. The percentage figures of people cutting back surprise me in that they are so low. Looks like most FTBs can afford to live as they normally do whilst saving/purchasing their first house.

If lenders are prepared to offer 100% mortgages with no deposits, people will buy them. The sensible people will save for at least a 5% deposit before buying.

Tiggs

According to SN its due anytime around.....

2001
or
2002
or
2003
or
2004
or
2005
or
2006
or.....errr soon?

Still plenty of FTB getting on the ladder....many are older than before or sharing/other options or divorced couples down sizing (when you realise nearly half of all couples get divorced theres a nice stream of buyers for FTB style props!

Petem95

Always surprises me when people come out with comments like this. FTB's have usually made up approx 35% of homebuyers, but now the figure is under 8% - an all time low. Thats plenty is it?

Simple fact of the matter is that for house prices to remain high we need a constant source of new money coming into the market. As Flightman comments, where will this come from now? BTL returns are poor, so not much more from there. FTB's priced out so not much from them either....

We always hear estate agents banging on about "strong underlying fundamentals"... are they really that strong?..

* Ever increasing unemployment
* Constant big rises in council tax, electricity, gas, oil, petrol
* Rising numbers of repos and people going bankrupt
* Markets factoring in interest rates rising
* Desperate schemes like shared ownership etc being pushed, just like they were before the last crash

Most economists predict the housing bubble will burst at some point, most estate agents dont... I wonder why, maybe they have a vested interest?..

swtmerce

Hi. I don't think there will be a crash. Straight forward economics - demand outstrips supply. One million homes shortage in this country! No matter what the Government does to build new homes (and that's fu*k all so far) they will never meet the demand. Especially when you consider our open borders, whether through legal or illegal immigration.

AudiLover

We need to completely close our borders for a good decade or so and scrap that EU BS where anyone can come over. Too many eastern european gangsters and too many african scammers too.

They should only allow proffesionals over like doctors teachers and nurses. The rest can go away.

camk

Maybe some English teachers as well, improve the spelling.

penfold118

I have been moved in for about a month, i was lucky enough to get a great deal, already have 10k equity ( although not planning to sell anytime soon ) I would have loved to buy sooner but the simple fact was I couldnt afford to ! I took loads of advice from so called experts :-) and some said the crash was near upto -25% others said it wouldnt happen due to shortage of houses and would rise. In the end the house that i wanted came along and I just went for it, whatever happens short term I think (hope) I will be ok long term.

Going back to the original post I think people always strugle at first, I know my parents did and most generations since then have aswell, I know I am :-)!!!!

AudiLover

Spelling.m There are no spelling mistakes. Maybe some work on grammar and punctuation. Looks like you will need some english lessons too.

Tiggs

ok...you must be right, no doubt the market will crash in...errrrr 2001 or 2002...etc, etc

where are all the FTB homes not being sold?

KiwiGTI

How is this for straight forward economics - there is no such thing as a one-way market, never has been. I see hugely inflated house prices driven by borrowed money.

Is everyone on here honestly believing that there will never be a recession again, that interest rates will never rise?

Smart money (ie: banks, investment houses etc) have moved their money out of real estate.

hades

I'm hoping for a big crash in about a month's time, as I'm about to exchange on sale of my house and move into rented in the short term . . . . .

*Cino*

I predict, in your dreams in the year of never

I could be wrong, could happen sooner

penfold118

If this is the case why are banks still lending people massive amounts of money 4/5 times there yearly wage on 95/100% mortgages ?
Surely they stand to loose big time if the prices do crash and houses start getting repo'd.

ScooBStu

"The housing market is going to significantly correct itself with a 30% fall within the next year or so" - This was all I heard when we bought our first house in 2004. Paid £94500 for it and it has just sold for £126500 to a FTB - We did improve the house with the addition of GCH, DG and a new kitchen but still I dont see any 30% drop - or any drop at all - In fact it has risen quite a lot!!!

Historically the housing market has increased over the long term - Yes with a few down turns but it has always happened at times when interest rates were rising.

In my opinion I dont believe that the market will crash unless interest rates increase by some margin.

Daryl

Petem95

Many economists did predict the market would crash happen sooner, but as FTB's began to get priced out, they were replaced by BTL which has been given massive coverage by get-rich-quick property programmes and general media interest.

The market has clearly turned - even by Halfiax's (known to put a postive spin on everything) own figures my county (Somerset) fell by ~10% last year, but as Northern areas have continued to show growth, the overall change for the country was something like +3%.

Well if FTB's arent buying them, then people who already own homes are buying them and probably letting them out.

Theres still a surprising amount of people out there who are a bit behind the times - one of my mates was telling me about his "great idea" - hes going to "buy a flat and let it out, and make a mint" - he reckons the 155k flat will rent for 650 a month, so thats a 4% yield before repairs, and assuming its ALWAYS being rented.... I pointed out property prices are likely to fall over the next few years, but he comes back with "they always go up in the long-term" - quote straight the property programmes

The smart money has been in emerging markets for the last few years - India's stock market was up something like 20% last year, China 40%, Japan 25% - so if he put his 50k deposit into these markets, and say they rise on average 15% over the next 5years, then he'd double it to 100k...

Tiggs

i invest money for a living....i'm well aware of what Chinas economy is doing.

there will be no house crash this year......come back in 12 months, i'll be right.

Luan Pra bang

Think some of you are missing an option here the high current prices don't mean a crash becuase there is shortage of houses, it just means the house price rises will just about hover around the rate of inflation for a few years.

davegtt

Ive been hearing about a housing crash since about 2001 shortly after we bought our first house (which btw has doubled in value since we bought, god I wish we kept hold of that place)

Its a joke, who seriously cares what the value of property stands at unless they're investors? Most people by a home for long term housing rather than making money, the worlds gone crazy.

MikeCardiff

iTrader: (2)

#20 - Cant happen - house prices have gone up hugely above the rate of inflation - over 150% in the past 4 years in some places - wages havent.

Very simple maths, but when house prices rise at a much higher rate than wages the market stalls. This has already happened in the areas where the houses started going up first, and houses are actually selling for less than they were 12 months ago. ( Up to 15% less near me ).

So apart from Oop North where the price rise didnt start for 12 - 18 months after it did in the South, house prices peaked about a year ago. Wait a year from now and houses in the North will be worth the same or less as they are now.

BTL has kept the market going longer than it would have otherwise, but this is coming to an end now as people realise that it isnt such a great investment.

davegtt

Yes Mike I understand all that, doesnt mean we're going to see a crash though does it?!?

MikeCardiff

iTrader: (2)

#20 - Agree that once you own a house, the value is pretty much irrelevant unless you are moving ( or you die and your kids inherit it ) - as long as you can afford the repayments, its all just pub talk.

But... problem is : if you got on the property ladder 5 years ago, then you bought the house very cheap compared to what the same house would cost you now.

Vastly inflated house prices hurt people who are FTB's - would you want to be buying your first house now ?

I think a lot of the people who are praying for a big crash are FTB's who are hoping to be able to not saddle themselves with a massive debt for the next 25 years.

davegtt

No I wouldnt want to be buying now, I admit that, but same could be said from someone from 25 years ago, if asked the same questions about buying in 2001.... Its all relative.

what ever type of morgage you take out its going to be a massive debt. Aslong as you can afford the monthly payments everything is fine.

Im not arguing about whether there will be a crash or not, Im saying just because lots of people want to see a crash doesnt mean there will be one.

Northern Scoob

Im still living at home, some of my friends have move out but theyre getting mortgages on houses at 120k a 2 bedroomed semi on a rough estate, to be honest im considering emigrating as the state of the country is beginning to **** me off - immigration laws - political correctness gone mad taxes etc!

just my thoughts - im probably wildly off track but thats the way it looks to me!!

Phil

SimonGawthorpe

The main fact to remember here is that FTB's cant afford to buy houses. This is a big problem for the rest of the market!

Whether there is a crash or a gradual (sp?) fall is debatable but they will go down. From a personal point of view, I am a copper and my mrs works for a bank and we cant afford to buy a house that we actually would feel safe/comfortable to live in in our area. We both have a reasonable wage and we are forced to rent.

Something has to give.

Si

Tiggs

wrong....there are plenty of FTB...they are just 30 nowadays...not 19.

and the divorce rate and buy to let market is easily filling the rest - there are NOT ENOUGH houses for buyers. Go find a new development...people are still buying off plan ( i know because i have sorted loans for people to do it)

rmtypeR

2 graphs, top one is average house price from 1952 to today, the lower one shows how that relates to average earnings over the same period...

Looking at the lower graph, it seems historically that a rise in asking price compared with avg earnings is followed by an drop at a similar rate. Attempting to get on the property ladder as I am, I hope this trend continues!

Ben v7

There is going to be a correction... it's the fact that first time buyers can't get on the ladder - it will be this that causes the knock on effects that will force prices down. Most transactions keeping the house prices high are from people who have already seen big rises in their own properties. Do agree though that the high levels of demand for reasons mentioned above helping keep them high... bit of a vicious circle for people like me... high prices... many properties bought in this price bracket on buy-to-let's again keeping demand artificially high... difficult. It will take a big rise in unemployment before the bottom drops out.

TopBanana

Bubbles always burst!