GOLDMAN 555

So it's pretty clear we are at the start of the house price crash how much do you think house prices will fall over the next 18 months?


I reckon 25%

Even the most optimistic estate agent reckon house prices are only going to grow 1% this year and we all know once you've added the estate agents filter that equates to about 10% in their optimistic reckoning.


I wouldn't want to be owning a buy to let right now…..


There's nothing safer than bricks and mortar

OllyK

At what point does a dip become a slide become a crash?

scoobynutta555

Pretty clear eh? Nothing is pretty clear at all when it comes down to the housing market, they might even rise this year. There has to be somewhere for all the immigrants to live I own property that's rented out and rents have actually increased by as fair bit in this area recently.

BTW interest rates are significantly lower now than at the last crash and look to be going down further. Housing markets are all about supply and demand and I don't see much fall in demand at the moment, with a finite supply I doubt there will be a crash, maybe a modest adjustment downwards as there does seem to be an elemnt of overpricing at the moment.

Regarding what looks like your last sarcastic comment, it is true that there's nothing as safe as bricks and mortar investing long term. I've owned my properties for over 10 years and even if there was a drop of 70% I'd still be quids in

Account deleted by request

I work in/around property and I think it will be somewhere between -5% and +3%.

It is so hard top predict and truth be told there is no guarentee, what I will say is to people who don't have to sell it doesn't matter. Some people have to sell houses, jobs/death/marigages etc and those are the people that may feel the pinch. I have just negotiated to buy a property that started life on the market circa 300k and I am paying just over 200. Its a wreck and is being sold by the charity it has been left to. They have to sell and 200 in the bank is better that potential 300. They probably feel the market has dropped by 25% but actually they always wanted to much cash for it as estate agents had over valued. I will tart it up ban it back on the market at a realistic price and sell it quickly. The profit will be double some peoples yearly wages.

I should add I sold 2 properties in November in a supposedly quiet market, they were priced competively and finished to a good standard. I made profit, money is now in bank and I ain't worried about the market at all.

This kind of market isn't all bad for us investors no matter how much some try and talk it down.

chop

Brit_in_Japan

Sentiment has changed since the credit crash, so the expectation is that prices will not keep going up at the same rate as the past few years. Sentiment affects both what sellers ask for and what buyers are prepared to pay.

Demand and supply are key, so it largely depends on the health of the economy and the continued migration of workers to the UK.

Although there is a credit crunch, interest rates will likely inch downwards in the next 6 months (especially as the US is expected to significantly lower interest rates) so interest rates will not be as much of a factor as once feared.

And it also depends on what type of property you're talking about and which part of the country. Some BTL landlords will bail out because of falling 2 bed flat rental income, but how many? We'll have to wait a few months to find out about that as they'll wait for the lower CGT rates in April before selling up.

So it could drop a "significant" amount in the next 2 years (i.e. >10%), it might stay level or it could increase.

HTH

Eddie1980

I agree its all about supply and demand, the demand is there and unlikely to go away but there are not many people who can afford there first house. On that basis demand could be as high as you like but until it becomes realistic for people to invest it will only ever be demand.

Its like saying there is demand for a housing development on Mars, yes there is but no one would buy at its current costs.

So while its all about supply and demand, you have to remember in a market where supply is either brand new, or through big inheritance tax, and a demand of first time buyers and immigrants. (Ignoring all the people moving from A to B) there may be supply and there may be demand, but will there be money to buy.

Personally I find that people with no money and or debt don't make the best customers no matter how much they might want something.

I have no idea what will happen, only that it will be "interesting".

scoobynutta555

Your point about house prices being too high for first time buyers. Well seeing as they can't live on Mars and they cannot afford to buy a house, and they HAVE to live somewhere, they'll likely live in rented accomodation owned by a BTL investor

mart360

not abreast of the market are we

the crash is over, the first rise has allready been reported in the press today.

Figures show rise in house prices - MSN News UK - news & weather

pissys scaremongering came to nowt

Mart

Brit_in_Japan

I wouldn't say that Mart, there are always peaks and troughs and the general trend is downward right now. I'm in the process of buying a house and I got a nice amount lopped off

Fuzz

What a bloody pointless post tbh.

How long is a piece of string?

Petem95

Seeing as the credit crunch means people cant borrow anywhere near what they could previously, and the fact that the economy looks like its hitting a bit of a tough period house prices will clearly be hit.

Can't say I have any sympathy for the greed-driven BTL'ers who've stopped young couples being able to buy a home and start a family.

I think once it becomes apparent that the falls are going to continue, and not a temporary blip, then things will snowball - especially after April when CGT changes mean a lot of BTL'ers are likely to offload after than.

My guess would be a 10% fall over 2008, so feel free to drag out this post in a years time anyone

PaulC72

Well I also think it would depend on what area pricewise you are in, houses under 150k may not drop and may even increase whereas houses of larger value may stay static or drop in value the reasoning behind this is the demand for lower priced properties will probably stay the same {first time buyers etc} whereas higher value ones will not be in as much demand due to people not wanting to move and lower sale prices being used to shift them.

Ok but everything is relative it is really a finger in the air situation as if you search hard enough you will be able to find conflicting information either way.

For now we are looking at our BTL situation but are not panicing as interest rates will be coming down once again and it may be a better time to sell

_Meridian_

iTrader: (1)

If house prices are lower at all in June 2008 (averaged over the whole of England) than they are now, I will buy the OP a drink.

Sorry, but there are still too many people and not enough houses. All you are looking at is the standard winter stagnation. The worst you will see is a slowdown.

M

merlin

The Telegraph have an interesting article on this subject from yesterday - see Property market: Brace yourselves for the crash - Telegraph

The Snug Rhino

lol - might as well start your post "i'm a fool" - would get you more credibility!

Suresh

If I could be bothered I'd dig up all the previous times you said it and were wrong over the last 5 years.

10% is not a 'crash' in any case. I expect the UK housing market will end 5% up in the year 2008.

GC8

They cant crash, the market just stagnates. If you have a Ł200,000 house which has now lost 25% of its value, you simply grit your teeth and hold out. People cant afford to sell and lose Ł50,000 of equity (or in many cases, sell for Ł50,000 less than theyve mortgages for...). There will be some distress sales of course, but mostly people will have to stay put and tough it out.

Terminator X

iTrader: (7)

They won't crash ... the increases may slow down though

TX.

Terminator X

iTrader: (7)

What about any of your "crash" posts from the last 5yrs

TX.

Edit - oops, just seen post #16.

slicksterjam

I bought my property in 2005 (170,000), on a valuation calculator it says that at the moment my property is worth 14% (193,800) more than at time of purchase, if prices crash 25% (145,350) that is from the 2007 inflated figure. That is 14.5% lower than my time of purchase figure not an ideal situation I know but I think 25% crash is the absolute maximum. I'm not going anywhere for a few years the market is dictating that (fair enough) I can handle that. You could say I have spent thousands on my mortgage for my investment to de-value but tell me another way I could live in my own property without paying someone for the privelige, I will also be reaping the benefits in years to come. Tell me a reason why I shouldn't tighten the belt a bit and weather the storm for a few years, all these so called forecasters seem to think I should be suicidal. Unless my calculations are wrong WHATS ALL THE FUSS ABOUT!

GOLDMAN 555

Im a fool along with most of the cheif economist's around the world.......

I said this is the beginin and it is the begining lets re open this post in a year

kingofturds

iTrader: (1)

Around 1.21 jigawatts

scoobynutta555

Yes, maybe we'll see an improvement in your English by then as I doubt many "cheif economists" (sic) have such poorly written views

Dream Weaver

It wont change where I live, may level out but it wont drop.

25% - PMSL

Petem95

Lets see who's right at the end of the year then Tx

My guess is you've overstretched yourself with a big mortgage on a pokey property as you seem rather concerned by the prospect of a housing crash!... "oh prices wont crash, dont be silly [nervous laugh]"

Trout

iTrader: (1)

Why not? Rents are rising in most areas, especially for houses where people are sheltering from ownership and the supposed crash. Of course this is increasing yields for buy to let, increasing demand and, oh, putting pressure on prices!!

jjones

on the other hand you are lining someone elses pocket in rented accommodation praying that the prices crash so that you can clamber onto the ladder that you deride so many others for already being on.

for the record if a decent sized crash happens i will be buying buy to let properties as a long term investment, after all those people who have no house owing to repossession will need to live somewhere.

Petem95

I don't plan to buy in the UK at all. People always assume that just because you 'think' there will be a house price crash means you are saving cash and praying for prices to fall so you can buy a better house, but this isnt always the case. I dont like the way the UK is going, so as I've said before, plan to move overseas, hopefully before Sterling completely slumps against other currencies (seems to be already tho )

IMO BTL is a sitting duck for some tax revenue for the government when times get harder, and I think a lot of people will welcome the introduction of taxes to prevent property speculation and amatuer BTL's in the future.

jjones

why are income tax and CGT tax not enough already?