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othello

Is A House Price Crash Really Beneficial?

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There is a view that a house price crash will benefit many people but in particular first time buyers and those who are currently out of the market.

However it is quite likely that a crash in house prices would either coincide with or put the whole economy in to a recession, resulting in job losses, reduced pensions, reduced investment, bad debtors, bancruptcies etc.

If that were the case would a crash be of any benefit, even to the FTBs who are currently waiting for the crash to happen?

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There is a view that a house price crash will benefit many people but in particular first time buyers and those who are currently out of the market. 

However it is quite likely that a crash in house prices would either coincide with or put the whole economy in to a recession, resulting in job losses, reduced pensions, reduced investment, bad debtors, bancruptcies etc. 

If that were the case would a crash be of any benefit, even to the FTBs who are currently waiting for the crash to happen?

Yes, without a crash majority of FTBs have no hope of ever securing homes big enough to have families in. If they do it will be by incurring huge amounts of debt that will reduce the amount of money they can spend elsewhere and providing for their retirements, childrens education etc. Those that won't benefit are those that borrowed too much and frankly that is their fault, they shouldn't have been so stupid to borrow only considering todays low IRs. Survival of the fittest.

Edited by munimula

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Yes it would be a benefit simply because people could move without real financial risk from doing so.

The real benefit would have been if the boom had been stopped in its tracks before it began but lets no go down that road.

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If they have been sensible and bided their time by saving what they can...YES.

If they have both ignored the possibilty of buying and spent their disposable incomes on holidays, cars, clothes and plasma screen tellys....NO.

Speaking on behalf of some of my friends and colleagues...these are people resigned to not buying at the moment, but equally are not doing much about saving. Perhaps they're right and I am wrong.

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There is a view that a house price crash will benefit many people but in particular first time buyers and those who are currently out of the market. 

However it is quite likely that a crash in house prices would either coincide with or put the whole economy in to a recession, resulting in job losses, reduced pensions, reduced investment, bad debtors, bancruptcies etc. 

If that were the case would a crash be of any benefit, even to the FTBs who are currently waiting for the crash to happen?

I have nothing to lose and im the only person i care about, so the worst the better as far as im concerned.

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However it is quite likely that a crash in house prices would either coincide with or put the whole economy in to a recession, resulting in job losses, reduced pensions, reduced investment, bad debtors, bancruptcies etc. 

Even when the economy was doing well pre-dotCom boom, companies took "pension holidays", and worker's pensions were stuffed.

Only those with unrealistic debt will suffer if they lose their jobs. You can always get another job, whether it will service your debt or not is a problem of your own making.

Recessions are part of economic cycles, as are price corrections. Anyone who "never saw it coming" really shouldn't be allowed to borrow money.

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There is a view that a house price crash will benefit many people but in particular first time buyers and those who are currently out of the market. 

However it is quite likely that a crash in house prices would either coincide with or put the whole economy in to a recession, resulting in job losses, reduced pensions, reduced investment, bad debtors, bancruptcies etc. 

If that were the case would a crash be of any benefit, even to the FTBs who are currently waiting for the crash to happen?

Yes. :)

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It's personal now - I am beyond caring whether there are unforeseen consequences or that it will coincide with job-losses etc.

I feel like I and my kind have been laughed at for too long and now is the time to STOP and face the bullies whether or not we end up hurt in the ensuing fight,

Bring it on I say - let's bring this filthy house of cards crashing down and start again.

We're British and can cope. Don't be afraid - this is something we cannot avoid any longer.

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There is a view that a house price crash will benefit many people but in particular first time buyers and those who are currently out of the market. 

However it is quite likely that a crash in house prices would either coincide with or put the whole economy in to a recession, resulting in job losses, reduced pensions, reduced investment, bad debtors, bancruptcies etc. 

If that were the case would a crash be of any benefit, even to the FTBs who are currently waiting for the crash to happen?

Hi Othello,

I think you are right that, unfortunately, all of these side effects are fairly likely to accompany a house price crash. I don't think any (well, not many) HPC regulars wish this on people.

But the problem is that we have got ourselves (here I mean the UK as a whole) into a real pickle and I think the HPC (with these uncomfortable side effects) is actually desirable... to get the UK back onto the "straight and narrow" and away from an economy sustained by debt (i.e. borrowed from the future) etc.

The HPC would merely correct an unpleasant side effect of loose credit and human greed. I'd like to say that "if I wanted to get there, I wouldn't start from here" but it doesn't help much.

Oh, by the way... don't kill your missus, she didn't do anything wrong, that Iago's a liar etc, etc...

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If that were the case would a crash be of any benefit, even to the FTBs who are currently waiting for the crash to happen?

In the short-term, maybe not. Recessions are often painful.

However, in the long-term a more balanced, stable and sustainable economy would benefit the country as a whole, and first-time buyers (who have been the biggest losers in the recent property bubble) would be far better off.

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othello

The HPC would be a good thing it would destroy new labour!!!!

A lot of people voted for this party (36% of the stupid population).

This country has gone to the dogs and it is time the people claimed

it back from those white liberals who gave the terrorists refuge here.

On a serious note my two kids both medical professionals one an

unemployed Dr after 1st year foundation training and the other a

dentist cannot afford house.

Sad situation where professionals cannot afford houses.

Up with the HPC2005.

Edited by E Powell

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On a serious note my two kids both medical professionals one an

unemployed Dr after 1st year foundation training and the other a

dentist cannot afford house.

Sad situation where professionals cannot afford houses.

An unemployed doctor isn't a professional, he's unemployed, social class E. There is no such thing as a working dentist who can't afford to buy a house (5x mortgage, one hour commute to work radius), although I am sure there are plenty who won't.

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Lets be honest house prices are waaaaay overvalued, the ecomony it's going down the toilet, it may take a while the gain momentum but we are on a slipperly slope, every day the number of high earners becomes less & less

So in my opinion it will be the ecomony that causes the housing market to go pop in a big way..

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There is a view that a house price crash will benefit many people but in particular first time buyers and those who are currently out of the market. 

However it is quite likely that a crash in house prices would either coincide with or put the whole economy in to a recession, resulting in job losses, reduced pensions, reduced investment, bad debtors, bancruptcies etc. 

If that were the case would a crash be of any benefit, even to the FTBs who are currently waiting for the crash to happen?

It's a risk I'm willing to take.

Most people with marketable skills (that "marketable", not "marketing") won't be overly worried about job losses to be honest. A wealth-transfer from speculators to people with wealth-generating jobs would be a good thing IMO.

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The minority who thought it was their god-given right to borrow extravegant quantities of cash over the past couple of years will be affected. These are the people who expect the government and Bank Of England protect their interests. "They won't let it happen!"

These people can go to the wall IMO.

The people I feel sorry for are those who had nothing to do with this price bonanza, who stand to lose their jobs because of ensuing downturn / recession, and anyone who will see poor returns on their savings as banks increasingly service defaults.

In line with my continuing observations of the housing market in my local area, I'd say the correct FTB action at the moment is to stay put and observe.

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I have nothing to lose and im the only person i care about, so the worst the better as far as im concerned.

You don't think that an economic recession would affect you personally then? What about your job, pension, savings etc? Or do you see the benefit of getting an affordable house to be the highest priority?

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Home ownership is traditionally associated with poverty.

Pre-1990 the countries with the highest private home ownership in europe were Spain, portgual and ireland.

Why?

Because the government could not afford to build social housing so people had to buy houses. In the rich countries people were happy to rent (germany, nordics, switzerland, etc..)

What your seeing is not really a HPC or a credit crunch but a gradual readjustment of the economy to the "european model".

I have no opinion as to whether this is a good or a bad thing, but people should realise that this is what is happening.

Please dont post that the german economy is not doing well because people dont own houses. The german economy is not doing well because (1) East germany 42k sq miles, population 20million has been successfully integrated and modernised in less than 20 years and (2) the employment laws are too strong.

(If anyone thinks that britain could take a country of 15million people and modernise it in less than 20 years without entering a major recession - then feel free to post about it......and we'll just laugh at you)

Edited by needle

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Or do you see the benefit of getting an affordable house to be the highest priority?

We'll all be far better off in the future if this crash is so bad that it discourages governments from pursuing credit bubbles for another generation. Hopefully 'doing a Gordon Brown' will become an insult used against any future Chancellor who pursues such policies.

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An unemployed doctor isn't a professional, he's unemployed, social class E. There is no such thing as a working dentist who can't afford to buy a house (5x mortgage, one hour commute to work radius), although I am sure there are plenty who won't.

The unemployed Dr situation is caused by not enough post graduate places

being available. That is the two year training as a SHO. So the Dr is

considering emmigrating.

The dentist has just qualified on mid 20k for a year however has

to commute 1hrs.

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You don't think that an economic recession would affect you personally then?  What about your job, pension, savings etc?  Or do you see the benefit of getting an affordable house to be the highest priority?

If you're interested in buying a house, job and savings have seen ~50% erosion in about five years.

... However, all this is distraction from the important issues: Where are we now, and where does a typical FTB go from here? To get caught out by a massive house price rise, and then to get caught out by a massive correction?

Not nice.

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In a situation in which young ftbs can't buy a property, and middle-aged + old homeowners have so much equity that they can live in luxury simply means that the young generation is paying for the 'good-living' of the older. In any well balanced economy, the young should learn new skills and start business projects (instead of working to make ends meet, paying a huge mortgage or rent). An HPC is definitely beneficial for the whole country.

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othello

The HPC would be a good thing it would destroy new labour!!!!

A lot of people voted for this party (36% of the stupid population).

This country has gone to the dogs and it is time the people claimed

it back from those white liberals who gave the terrorists refuge here.

On a serious note my two kids both medical professionals one an

unemployed Dr after 1st year foundation training and the other a

dentist cannot afford house.

Sad situation where professionals cannot afford houses.

Up with the HPC2005.

I agree with what your saying, but no previous government has lost power as a result of a house price crash during their incumbency

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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