borat52

This poll is a 'put your money where your mouth is' poll. Please don't riddle this thread with opinions or why 'I am right and your wrong' as there are plenty of other threads on the forum already running for that purpose. This is something to look back on in 2 years time to see how things panned out and who managed to call it correctly. If you want to say why you voted as you did please post a little comment on your take on things.

davegtt

About where it is now tbh....

stilover

Wheres the poll?

My opinion is ............. it will be on it's @rse. Just like the rest of the country. Interest rates will keep on rising to curb inflation, meaning more people who've got mortgages 5 times their wage will struggle to meet their repayments. Once the housing market falls, lots of people are going to be in negative equity. Lots of people going backrupt.

Just my Opinion

Tidgy

its gonna crash eventually, go back before the 90 and house prices were sky rocketing, then they crashed and you could pick up a mansion for a bag of walkers lol

joking aside though, the price is rising so fast it will eventually come to a screetching halt and they will stop selling, so prices will come down

borat52

I'm saying down 20% or more. Think inflation will lead to higher interest rates to such an extent that people have to sell up as there mortgage repayments will become beyond there means to pay them. Will probably also cause a short recession.

Tidgy

think your right, can't wait for it to crash and buy a place lol

TelBoy

I want a quid for every time somebody asks "where's the poll" before realising it takes time to compile after the initial thread is posted

And PLEASE can you remove the a from plenty

lozgti

Only those with 95% -110%mortgages think/hope it will rise relentlessly.

B9GLY

if people are on fixed mortgages then interest rates rising wioll not have any effect on them while in there fixed period!! when i bought my first house last year i took a fixed term for 5 years as i wanted security that it wouldnt go up!!!!!

106rallye

What happens after 5 years though if the rates are a lot higher than what you took your mortgage out at? Instant additions to your payments - fine if you have budgeted for this or get significant pay rises - not if you have borrowed to the hilt and inflation goes through the roof along with interest rates.

Andy

MattW

Middle option.

Abdabz

up 10% me thinks - couldnt see that option so unable to vote, but I am right

Freak

Crash like Richard Hammond in a rocket car.... only with probably less media coverage

jaytc2003

iTrader: (1)

I reckon an increase still (hopefully where I am anyway) new development area

fatherpierre

They'll only crash if interest rates go to 15%+ as per the late 80s/early 90s.

I think they will hit the wall and then increase year on year roughly inline with inflation.


My house has gone up 18% in year I've had it . Not that it matters as every other house in the area has too.

OllyK

https://www.scoobynet.com/non-scooby...sh-coming.html

AudiLover

in my personal portfolio

hades

The thing there is that if "inflation goes through the roof", wage increases will also go through the roof (wage inflation is generally a touch higher than RPI on average). If wage inflation is at an average of 10%, a loan of 5* your salary now is only about 3 3/4 times your salary in 3 year's time, or 3.1 times after 5 years.

To a certain extent, it's self regulating - or at least has "negative feedback" in the system. If interest rates go up far enough for people to be struggling/failing to pay their mortgage, consumer spending will have to fall (and with higher interest rates s it can't be propped up by people cashing in on their equity by remortgaging!). Consumer spending falling will lead to recession and inflation falling, so interest rates will be lowered. I'd probably really struggle to pay the mortgage if interest rates went close to 15%. However, by that time 2/3rds of the country would have been repossesed,, so I can't see that happening.

ethanrob

iTrader: (3)

Im selling very soon

I have a two bed semi located right on the edge of the pennines in north sheffield,my mother lives in the house at present,but she is getting a bungalow all being well within a few weeks,so time to cash in

Bought it 5 years ago for £39995,needed renovating,which it has been

estate agent came today,marketing at £149,950

Oh bless the £110,000 profit for doing bugger all

Unfortunately,the missus(who i moved in with)has plans
selling her house,again we will clear about £80,000 profit after morgage has been cleared

so a budget of £190,000 to buy a new house

she has set her sights on a barn conversion,a large one
So im just hoping she leaves me enough to swap my 03 sti for a spec c

I cannot see much more movement on house prices,as said above,people will stop buying as houses become un-affordable

mark

106rallye

What about the impact of a recession though? Low consumer spend, Bankrupcy, Redundancy, wage freezes, less tax revenue for the government. higher unemployment payouts etc etc etc.

hades

Sure recession will have all kinds of impact. However, I posted in response to your talking about high inflation rates, which tend to come before a recession (generally during a period of spending led growth), rather than during a recession. High inflation rates actually have significant benefits to people with large mortgages, economic growth obvioiusly has benefits for the country as a whole.

Throughout much of modern history, economics has tended to work on a 7 year (ish) boom - recession cycle where periods of large economic growht, high inflation etc have been followed by periods of low economic growth, lower inflation, higher unemployment etc. At the moment, Gordon has been artificially propping up the economy by high Public Sector Borrowing, so we're not really in the recession we arguably should be (although we aren't in a boom either). The debatable thing is whether that can actually last or whether a recession might kick in when various bubbles burst

Dracoro

Also, bad debt will mean mortgage lenders will have to be much tigher with their policies as to who and how much money they lend. Go back to 3/3.5* salary and only offering the good rates to 'safe' buyers asking a small proportion of money.

All well and good prices coming down but if you can't get enough mortgage to capitalise then it's irrelevant. Obv there will be some who can be cash buyers etc. but we need to look at the position that what the majority of people are in.

Dunno why people like their property going up in value so much, it just means it's harder to get up to the next rung. The lower prices become, the cheaper it is to buy/upgrade to a bigger house.

Petem95

Its make people "feel" rich, so they go out and spend and also sadly there's a chav-factor to it as well "oh my house is worth £xxx - I've made a killing on it etc etc"

IMO prices will be firmly heading south in 2 years time, but I think it will take longer than 2 years from now to knock 20% off todays prices as I think prices could still increase for another few months before turning.

Along with the housing crash there'll be mass bankruptsies, increased unemployment, higher interest rates due to inflation, a higher tax burden and probably recession.

Also if China revalues its currency and sterling crashes (both likely to happen at some point), then the price of imports would rocket and we'd have massive inflation and possibly back to 20% interest rates even. It would boost exports however as they'd become more competitive.

Anyone who thinks we can continue like we have for the last decade (ie everything fuelled by debt) is living in a dreamland. The cycle will complete at some point. It'll be a very long time until we see double digit growth in house prices again too.

hades

Slight flaw in your theory of gloom and doom is that according to most economic theories is that high inflation and high unemployment don't tend to occur at the same time. This fits intuitively in that unemployed people can't afford to keep spending so demand falls and so will inflation. Admittedly, recession can and often does coincide with currency movements, leading to import prices going up, but the increased competitiveness of exports can help lead a recovery.

The other point is that higher interest rates will tend to prop sterling up rather than lead to it crashing. Again, there's a degree of negative feedback.

That's not to say there isn't a recession coming - they do come from time to time and almost certainly we'll continue to have cycles for a long while to come.

The worrying thing of the "everything fuelled by debt" comment is that the government/country as a whole is the worst offender in this case. 12 years ago, the national debt was at it's lowest for a long while, now it's massively higher than it has ever been. With that borrowing ever more to prop up the economy, anyone suggesting Gordon is a great chancellor is also living in a dreamland.

As for the massive crash in house prces, I'm still not convinced. Demand is higher than ever as more and more people seem to feel a "need" to get on the housing ladder by age 20. More and more single/divorced people own houses, more and more wealth is spread into the economy as our parents and grandparents (often the first home-owning generation) die and we inherit the cash to buy. I've long believed that's what props up present house prices. And it does seem to be a world-wide trend; in a lot of the traditionally "cheap" countries, prices are rising 30-40% a year - they're heading towards UK/Western Europe type prices rather than us coming down tto meet them.

badboy-scoob

prices aint gonna crash!! im gonna get a buy-2-let with one me mates this year and when we got more money get more - then we can stop working and live from the money from them

borat52

RPI now the highest since 1991, CPI also at very high levels. Any further increase in CPI means Mervyn King wil have to write to the G to explain why inflation is running so high.

BBC NEWS | Business | UK inflation rate increases to 3%