pslewis

Pretty Hot Topic always .....

Wondering where everyone thought prices will go from here on in?

I have got it wrong over the past 2 years, I thought the correction would have happened by now - but, no, it still powers ahead.

Reading in the Sunday Times about a chap who is selling and going to rent for a couple of years as he believes that the market is just about at it's peak and will fall back ...... nothing unusual in that I hear you say - well, this chap happens to be a Director of a Mortgage Broking Company, which makes me sit up and listen a bit more closely.

It's true that Humberside and Yorkshire have seen falls recently, London has moved ahead strongly and the rest of the UK is generally stagnant.

With another Interest Rate hike expected in August and pay rises being pegged back ...... what do you reckon?

I have been wrong for so long that I guess I have to be right soon and a fall will happen - or will it?????????????????????

stevebt

iTrader: (8)

the market wont drop but it may stabalise ?? there is still a huge shortfall in homes needed by about 5million and considering all the top house builders can only manage to build about 30,000 homes a year, i cant see the housing market going backwards

njkmrs

I reckon oop North we still have a lot of catching up to do.
The prices darn sarf are still on the up .
There is still a major shortage of housing ,with the country being flooded with people.

My money is in property and will be longterm .

When you see the prices of property down south ,compared to up here ,I still feel we will see a steady increase in the price of houses,for some time to come .

I bought a property about four years ago for (wait for it) 27500 .It is a belting back to back house in a reasonable area ,with two beds on first floor and a gigantic 3rd bedroom in the loft (22ft by 18ft ).
This property if down south would be a couple of 100 k at the least .
I think I will hold on to it .
I dont see any looming crash in the near future .Unless we lose some of our population,which is not going to happen .
The best investment by far ,for those who do not like to gamble too much !!!

Petem95

The latest reason for prices staying high is the "shortage myth"!. A couple of years back the main thing EA's and mortgage lenders used to say was "high employment and interest rates wont top 5% for the rest of the decade"... now they cant use these reasons anymore, so its just the shortage arguement!

To discount that instantly you look at what happened in Japan. They have a GENUINE shortage of property and land to build on! Otherwise very similar situation to here (prices rocketed, crazy multiple mortgages etc) but prices crashed massively - up to 80%.

The level of debt is currently insane, repos and bankruptsies constantly on the up. Once the cheap credit dries up pricely will be hit. Even if there were 100 buyers after every house - if nobody can borrow the required sum to buy, the asking price HAS to fall....

Sadly in the UK there seems to be a chav-factor with house prices though "I've made a fortune on me ex-council house, worf 'alf a million innit" etc!

There is also the social impact of the high prices. Young couples cant afford to buy, so are putting off having a family. To replace these babies, and to also stoke housing demand and keep wages low the government has been allowing massive-scale immigration from poor countries.... bodes well for the future of the UK doesnt it...

J4CKO

iTrader: (1)

Yeah, people cant afford to breed if they want to own a house so the mutants and immigrants breed instead.

David Lock

I don't see why they can't release more land to build on. Why should people have to pay over the odds for some box built on a brownfield site near the railway?

There's plenty of land around and I am not talking about concreting the rolling countryside either. Near me they have squashed 4 properties in a corner overlooking a busy roundabout and the area is surrounded by some scruffy fields which are no real use to anyone and no Great Crested Newts lounging around either.

A house in the SE which costs £500k actually costs less than £200k to build and this is all because they say there is no room for any more in the area.

As soon as some land is released prices will fall dramatically and people can start to enjoy life in a decent place with a garden if they want one.

But I appreciate it won't happen!! dl

njkmrs

Agree with some of what you say .
But I do not think we will see a crash.
Also dont know of any half a million ex council houses up here.!!
But if someone has made, in theory, a few bob buying their council house then good luck to em .
Regards

Jerome

There doesn't seem to be any shortage of new developments in some of the places I visit. Between Crowthorne and Bracknell they are currently building a massive estate. The Lowestoft area also has had masses of development in recent years. After spending 2.5 years in Canada (2003-2005), I couldn't believe the amount of houses that had been built when I got back.

Visiting estate agent web sites, there seem to be plenty of places for sale, so, apart from Central London, where exactly is the shortage?

Also in the Sunday Times, they predict that the average house price will be 10 times the average salary (in 2026 IIRC). It's bad enough at 7 times now, but how can people afford to borrow 10 times their salary?

jjones

the shortage is mainly in "affordable" TM housing

UK's 'desperate' housing shortage will not mean loss of countryside

Terminator X

iTrader: (7)

If you'd sold 2 years ago & been renting since then ... you'd have lost a fortune!!

TX.

Terminator X

iTrader: (7)

FFS! Is there nothing that you guys won't accuse the Govt of ...

TX.

Mitchy260

Out of a group of around 20 close friends, there are only 3 of us who have mortgages. (Aged 22-25)

The rest are still living with parents, and are desperate to get onto the housing market.

I guess there are many millions all around the UK in the same boat! (Professionals in mid 20's still living with folks)

As soon as property prices begin to fall, these people will flood the market and push the prices back up. House sales will get into bidding wars and there will always be someone who is going to offer more than you! (Scottish mortgage system for example)

They may stagnate in the south of England. Rest of UK will come into line with the south.

I would only be worrying about property prices if i were living in the south as current prices are definitely not sustainable. £200k for a 2 bed box house easy!

Average Joe on £26k per year cant afford a £1300pm £200,000 mortgage. Pay the bills, run a car, feed himself and still have a life! 7.5x his salary.

I think its madness going for anything over 4x salary.

lem6

hahahah....true

OllyK

House down the road for us sold for £130K, 2 years ago, back on the markey now for £165K. Don't know if it will sell at that, but the market seems pretty bouyant round our way.

marky1

You have to remember it's a two tier market. London is different to the rest of the country, yet is included in nationwide average prices. The wealthy in London aren't so sensitive to rates because many of them pay cash. I can see the market continuing to strengthen in London, but coming under pressure in all other places.

stilover

Appartments seem to be starting to suffer up North.

New house builder is selling it's second phase of Appartment for less than the first phase, as they couldn't get anyone to buy them. The sales woman recconed there is a significant drop in investers wanting to purchase appartments as the prices now, mean that the rent won't cover the mortgage repayments. House prices up here seem to be still pretty strong, but have heard about a few builders giving away as much as £40K on a new house.

InvisibleMan

gerrards cross had some very nice houses knocked down and replaced with some, as quoted 'affordable' 2bed apartments.....for £500k

its too many people buying property, selling them off for vast profit thats why prices are going up and reducing the number of affordable properties.
Its pointless building more only for 'property developers' to get in there first. And so the cycle continues...

Fantom

You are incorrect. There are plenty of people with plenty of money who will invest and rent these properties out. We will turn into a nation of tenants and landlords.

paul-s

exactly. maybe its necessary to restrict the sale of properties to investors, etc. limit the maximum number of places or something along them lines?

stilover

I disagree with you but agree with Petem95.

If someone buy's a house to rent out, and buying that property costs them £800 a month, but the top rental income for that type of property is £650 a month, who is going to buy it to rent out and lose £150 a month? An idiot is the only one who would.

The only properties that are available for first time buyers these days are the very same homes that 7 years ago you wouldn't be paid to live in. They're mainly run down ex-council / terraced houses in not very nice area's.

As I said in my post earlier, a sales women told me that they struggled to sell appartments as investers couldn't buy them and rent them out without making a loss. First time buyers could not afford them full stop.

TBH I really hope interest rate hit 6% by the end of the year, and hopefully maybe more next year. This way it should, I hope, start the property price fall. Like Petem95 says, if no one can afford to buy a house, the price has to fall to meet the affordable value.

Mind you they could hit 15% next year for all I care. I hope to be mortgage free by the end of the year. All going well.

davegtt

Not being funny here but why not? theyre not losing £150 a month, theyre putting £150 a month technically into a savings account. 25 years down the line they will have put £45k away into a saving account. what interest would that have given you? Alot less than what the property would be worth by the end of it all thats for sure. All depends if you have £150 disposable income to be able to afford it.

There are plenty of people who put away alot more than £200 a month into savings accounts and just leave it sitting there for a rainy day FACT.

rossyboy

iTrader: (8)

Actually thats kind of what I'm doing. Live with the g/f in her flat and I have no share in it. I bought a flat last year (my only property) that costs £550 a month in mortgage payments and only recovers £425 a month in rent.

I can quite happily live with a repayment mortgage of only £125 a month though

Its gone up £30k in that time aswell, which I would otherwise have missed out on.

davegtt

Exactly, point proven, presuming I could afford to buy another decent house round here and give up the extra income its something I would do, unfortunately now Im living on my own and only have 1 income to the house I cant do that.

Pretty simple maths really.

Good luck with it rossyboy

rossyboy

iTrader: (8)

Thanks Dave. I had to do something before everything became unaffordable.

That sort of investment assumes that house prices will continue to rise though. Had they fallen since I bought, then negative equity would have resulted in a seriously bad investment!

davegtt

True but if its a long term thing (25 years) I doubt you'll have too much issue if its only costing £125 a month presuming its not left unrented for a period of time I doubt the flat will be worth less than £37500 so its not all bad. And off course you can fall back onto it if you ever need a place to live in the future

stilover

All that's assuming your able to rent it out 12 months every year. What happens if you can't rent it out? You then have to pay the full mortgage amout yourself, lower your rental price and hope you get a tennent. Everyone thinks it's easy to rent. There comes a time too when there are too many properties in an area for too few tennents.

You also assume that there will not be a property price fall. If it comes, that £200k property you're trying to rent is now worth £100K. You can't say it'll never happen. History tells us it has, and probably will again.

It is a risk, and one that could either pay off very well, or pretty much lose you everything.

Bakerman

The only issue with using houses as an investment is if you are tied to selling your investment at a specific time, providing you are flexible and can sit out any drops then houses are a sound investment. I for one would rather live in a really nice house than own a lesser house and an investment property (which is what I am doing now) but believe me there are soooooooooooo many people out there with plenty of cash who will always be able to afford houses and keep the market going. Just take a look at the cars on the road nowadays and it shows the affluence of the country, i do agree however with some kind of restrictions/financial penalty for multiple home owners but then again who am I to decide what other people should do with their cash ? I do feel sorry for 1st timers though as the figures are horrific.

An example, down my road eight new 1 bed flats were sold within a week for over £150k all to investors and all have subsequently been let. Nice area in Oxon.

davegtt

I actually covered in an earlier post about it being empty for a period of time. Im not blind to the pit falls of renting but thanks for pointing that out.

Nobody assumes there will be a pricefall buti'll come back in 25 years and tell you that his flat is not going to be worth £37500 or under. Sure, if we see a massive crash thats bad enough to drop a 200k property to 100k I would like to think over the next 25 years its going to climb somewhat again (as history tells us it has )

stilover

True, but most of the high end motors are probably leased through their companies.

Were currently in the process of taking a company to court as they owe us £35k for a contract. The guy swears he hasn't got the money to pay us, or all the other sub-contractors what he owes. Yet in the 2 years we've know him he's had a 996 C4S, a 4.2 V8 RS4, and currently driving around in a porsche Cayenne Turbo. All through leasing.

Terminator X

iTrader: (7)

Property is ALWAYS a good investement. If you buy an average house today (£168k?) it will worth an average of £600k ish in 15 years time. No brainer really ...

TX.