House Market Crash

[Tommy G]

Unless you've been living in a cave in the for the last few months you will have noticed that house prices are gradually falling.

Fortunately I am not a home owner currently, but it begs the question to others how will you cope if the inevitable happens?

House prices are on average about 11% lower that a year ago. So if you were a first time buyer who bought about 12-18 months ago then it would be the most worrying for you

All is not gloom, I'm sure those who bought houses 25 years ago will still have made a massive return on their investment in real terms. I think the governments move in the last week has been desperate and will only make the issue worse. Many houses valued at around 200k by estate agents will now have to be dropped to the stamp duty threshold just to tempt buyers.

Then there is the problem is lost tax revenue, I think it's costing the government 600m to do this, and is currently unfunded? It's a worrying thing, coupled with the shared equity scheme, which is just another desperate attempt to prop up an already over valued house market. This is unfortunately politically popular to those who can't see through the spin. With the FTSE 100 dropping to a 6 year low yesterday, it is certainly a worrying time for this country economically.

[Alexikokopops]

All is not gloom, I'm sure those who bought houses 25 years ago will still have made a massive return on their investment in real terms.

True that. My parents bought their house for £35500 and it's worth about ten times that now. Ridiculous.

[James.]

Everything's f**ked.

[Webbo]

My house may have gone down in value recently but it's still worth far more than what I paid for it. I'm not planning to move why should it bother me?

Personally I'm glad prices are going down and giving first time buyers a better chance.

[stez]

i don't think the govenment should be encouraging first time buyers into a market that's still to high. houses are vastly over valued; i bought my house 6 years ago for just over 37 grand, sold it two years later for just under 60 grand and those houses are now valued at around 100 grand. there is no way that house is worth that. when you think my mum and dad got theirs for 7 grand 30 years ago, my mate got his place for 19k 15 years later and i paid 37k for mine 10 years after that (the 19k one was a flat) the recent hike in house prices have just been silly.

there needs to be a re-adjustment of prices and sadly the people who bought at the height of the market will lose out. i've been sitting tight for several years now waiting for a more realistic valuation of properties so i can get a little flat to keep my hand in the market (i currently have a tied house with my job, but i'd need somewhere if i got the sack!) looks like i'l hav e to keep waiting for a while yet though.

[davieG]

True that. My parents bought their house for £35500 and it's worth about ten times that now. Ridiculous.

It's only paper value though unless you've owned more than one house, you never benefit from it personally because it's always tied up, the only people that benefit are whoever you leave it to and the government.

I've never understood this media frenzy and positivity over rising house prices even for someone who 'got in early' it make it more difficult to move because the next step up gets more difficult in real terms as dearer houses rise by ever greater amounts then you add in the extra selling and buying cost which are based on the increasing value of the house - I just don't see the benefit

[Tommy G]

My house may have gone down in value recently but it's still worth far more than what I paid for it. I'm not planning to move why should it bother me?

Personally I'm glad prices are going down and giving first time buyers a better chance.

You are one of the lucky ones, lots of people are either facing negative equity or reposession.

The governments move this week will end in to disaster, mark my words. It's encoraging people to buy. If you are worrying about the 1,750 you could save on stamp duty then really you aren't in the position to buy. The housing market is still massively over valued.

[Webbo]

You are one of the lucky ones, lots of people are either facing negative equity or reposession.

The governments move this week will end in to disaster, mark my words. It's encoraging people to buy. If you are worrying about the 1,750 you could save on stamp duty then really you aren't in the position to buy. The housing market is still massively over valued.

A lot of those people are facing negative equity because they paid off large credit card bills or bought a car by putting it on the mortgage. It was always a stupid idea and I have very little sympathy for people like that.

[stez]

It's only paper value though unless you've owned more than one house, you never benefit from it personally because it's always tied up, the only people that benefit are whoever you leave it to and the government.

I've never understood this media frenzy and positivity over rising house prices even for someone who 'got in early' it make it more difficult to move because the next step up gets more difficult in real terms as dearer houses rise by ever greater amounts then you add in the extra selling and buying cost which are based on the increasing value of the house - I just don't see the benefit

unless you're selling up and getting a job with a tied house

or moving down the market, which the elderly (living in a near empty 4 bedroom detached (for example)) should do instead of moaning about the high council tax

You are one of the lucky ones, lots of people are either facing negative equity or reposession.

The governments move this week will end in to disaster, mark my words. It's encoraging people to buy. If you are worrying about the 1,750 you could save on stamp duty then really you aren't in the position to buy. The housing market is still massively over valued.

negative equity will only matter if you're hoping to move, if you sit tight your house will be worth more than you paid, even if it does take a few years more. the repossesion thing is more worrying, because when i was looking years ago the banks were being fairly careful who they lent to and what they would lend. but because of the recent massive valuation hike, they've lent too much to people who would struggle to pay in the good times, let alone now! (easy to say now but) they should've refused more this would've put the brakes on the market sooner because f(first time buyers especially, the fuel of the market) couldn't get on the ladder so prices would have to stay lower.

[davieG]

unless you're selling up and getting a job with a tied house

or moving down the market, which the elderly (living in a near empty 4 bedroom detached (for example)) should do instead of moaning about the high council tax

I don't think those points are valid - rising prices do not benefit either.

Rising house prices would be the worst case scenario for you if your moving out and planning to move back later - stability would be much more beneficial.

You can downsize in a stable market in fact, I could do that but the costs of moving are not worth it now that prices have risen so much forcing up the fees.

In fact estate agent and solicitor costs measured as a % and based on rising prices are a total rip off. It doesn't cost them anymore yet they get an increase every time prices rise and then moan like buggery when prices drop or the market stagnates - put some of your big profits aside for a rainy day FFS

[James.]

It's not a bad time to move up in the market.

[stez]

unless you're selling up and getting a job with a tied house

or moving down the market, which the elderly (living in a near empty 4 bedroom detached (for example)) should do instead of moaning about the high council tax

I don't think those points are valid - rising prices do not benefit either.

Rising house prices would be the worst case scenario for you if your moving out and planning to move back later - stability would be much more beneficial.

You can downsize in a stable market in fact, I could do that but the costs of moving are not worth it now that prices have risen so much forcing up the fees.

In fact estate agent and solicitor costs measured as a % and based on rising prices are a total rip off. It doesn't cost them anymore yet they get an increase every time prices rise and then moan like buggery when prices drop or the market stagnates - put some of your big profits aside for a rainy day FFS

beive me, buying at 37k selling at 60k and moving to a rent free tied house with 15k (or there abouts) clear profit benefited me!

if you move from a 4 bed 250k house into a 1 or 2 bed terrace, for example, you're gonna come out with some money over, and cheaper council tax if you've paid off your mortgage.

[davieG]

I don't think those points are valid - rising prices do not benefit either.

Rising house prices would be the worst case scenario for you if your moving out and planning to move back later - stability would be much more beneficial.

You can downsize in a stable market in fact, I could do that but the costs of moving are not worth it now that prices have risen so much forcing up the fees.

In fact estate agent and solicitor costs measured as a % and based on rising prices are a total rip off. It doesn't cost them anymore yet they get an increase every time prices rise and then moan like buggery when prices drop or the market stagnates - put some of your big profits aside for a rainy day FFS

beive me, buying at 37k selling at 60k and moving to a rent free tied house with 15k (or there abouts) clear profit benefited me!

if you move from a 4 bed 250k house into a 1 or 2 bed terrace, for example, you're gonna come out with some money over, and cheaper council tax if you've paid off your mortgage.

but not if the house prices rise by 40 to 50% by the time you want to get back in to the market - yes a short term benefit but longer term I don't think so.

First of all your scenario of moving from a 4 bed house to a 1/2 bed terrace wouldn't be my idea of downsizing apart from the fact that the house change itself is too dramatic I'd suspect the locations would be entirely different and unacceptable, of course you'd come out with some money but the costs would still leave you, on a net basis well out of pocket.

Besides that's not the point the point is you could do that just as easily and probably cheaper in a stable house market.

[Nationwider]

Unless you've been living in a cave in the for the last few months you will have noticed that house prices are gradually falling.

I believe the price of caves has dropped as well.

Fortunately I am not a home owner currently, but it begs the question to others how will you cope if the inevitable happens?

What is the inevitable?

House prices are on average about 11% lower that a year ago. So if you were a first time buyer who bought about 12-18 months ago then it would be the most worrying for you

You could just not move house? To an owner, your house is worth what you paid for it, generally speaking. Coming off a fixed rate you set 3-5 years ago and on to the bank's variable might be a eyebrow-raiser, but people ought to exercise more financial restraint and not go balls out. What goes up must come down.

All is not gloom, I'm sure those who bought houses 25 years ago will still have made a massive return on their investment in real terms. I think the governments move in the last week has been desperate and will only make the issue worse. Many houses valued at around 200k by estate agents will now have to be dropped to the stamp duty threshold just to tempt buyers.

My home is a building I really liked that I decided to buy and live in. A house doesn't have to be purely a financial investment.

Then there is the problem is lost tax revenue, I think it's costing the government 600m to do this, and is currently unfunded? It's a worrying thing, coupled with the shared equity scheme, which is just another desperate attempt to prop up an already over valued house market. This is unfortunately politically popular to those who can't see through the spin. With the FTSE 100 dropping to a 6 year low yesterday, it is certainly a worrying time for this country economically.

The government can rustle up £600M in the blink of an eye - you wouldn't even notice. Why is it a bad thing to help people buy their first house? Nobody's going to vote on the issue of stamp duty anyway.

[Tomassi]

all i know is that im gonna have to find a rich bitch if im gonna move out anytime soon

[Guest]

A lot of those people are facing negative equity because they paid off large credit card bills or bought a car by putting it on the mortgage. It was always a stupid idea and I have very little sympathy for people like that.

This has happened to a good friend of mine. If it's any consolation, she is regretting every penny spent.

[Webbo]

This has happened to a good friend of mine. If it's any consolation, she is regretting every penny spent.

Perhaps I came across little harsh. I didn't mean to sound smug and superior. I know some people who have put unnecessary expenses on their mortgages and I tried to tell them at the time.

It just annoys me slightly that while the govt. are talking about helping those people out they'll never learn any better.

[Guest]

Perhaps I came across little harsh. I didn't mean to sound smug and superior. I know some people who have put unnecessary expenses on their mortgages and I tried to tell them at the time.

It just annoys me slightly that while the govt. are talking about helping those people out they'll never learn any better.

The last thing she wants is another handout. What she really wants is to go back 5-10 years and decide she really didn't need to buy all that crap.

I don't have any sympathy either, if I am honest, but opted to keep my mouth shut at the time my mate and her ex went on their spending spree. My mate is big enough to know she only has herself to blame, which is fine. It's the people who blame everyone else who reet piss me off.

[dave_the_fox]

I bought my first house in Feb of this year, and do I regret it?

NO!

My mortgage is fixed for five years (4.63%) and I am coping fine with it so whats the problem?

[Babylon]

I bought my first house in Feb of this year, and do I regret it?

NO!

My mortgage is fixed for five years (4.63%) and I am coping fine with it so whats the problem?

Indeed. It's forced sellers, Buy to let people who wanted to make a quick buck, and those who had pinned their hopes on changing mortgage every two years so their repayments stayed low. For the normal person on the street it all means very little, i'm sure they are more worried about food and gas prices.

Personally it has worked out great for me. I'm looking to buy around June next year, prices will still be dropping or at worst stagnating. I will also save a couple of grand on stamp duty. Because i've got a HUGE deposit I will also be able to get any mortgage I want... happy days, i'm sure there are many like me too.

[davieG]

I bought my first house in Feb of this year, and do I regret it?

NO!

My mortgage is fixed for five years (4.63%) and I am coping fine with it so whats the problem?

Well having a fixed interest rate during a period of rising interest rates protects you quite a bit.

I guess the problem is for those that have bought at the peak with 100% or more mortgage and with a variable interest rate. On paper they're down quite a bit on equity. Their main problem is that they are unlikely to have sufficient funds day to day to pay their mortgage and will have the house repossessed.

But even there if they can keep up the payments and sit tight for a few years I'm sure the prices will rise again.

I don't understand the haste at which these repossessions take place, what use is a house that can't sell to a bank, they might as well come to some arrangement and let the people live their paying a reduced rate and letting the debt rise a little. This at least might restore some confidence in the market or at the least not exacerbate it.

[Zingari]

not just daily mail readers interested in effects of house prices then

[Guest]

I don't understand the haste at which these repossessions take place, what use is a house that can't sell to a bank, they might as well come to some arrangement and let the people live their paying a reduced rate and letting the debt rise a little. This at least might restore some confidence in the market or at the least not exacerbate it.

From my understanding, a repossession is very much a last resort, and there are certain criteria that need to be met before the lender can apply. I can only assume that more lenders are taking this action as they have no confidence in the debtor's ability to pay back even at a reduced rate?

[davieG]

From my understanding, a repossession is very much a last resort, and there are certain criteria that need to be met before the lender can apply. I can only assume that more lenders are taking this action as they have no confidence in the debtor's ability to pay back even at a reduced rate?

That seems logical but repossessions seem to start fairly early on and sometimes even before a slump gets up a head of steam.

[Benji]

Question:

if there was no such thing as the media (newspapers, tv and radio), how would the every day person know whether to ask for more or less on their house?

I'm sure there are economic equations to work all of it out, but at the end of the day it seems as though whent he media says jump we say how high (or how low at the minute)