House Prices Depress Me - My First Post

[CleverBear]

Hi guys,

This is my first post, and I just wanted to say what a great site and it is great to find a site with people who share my views on the corruption present in the housing market at present.

I am in my 20's and simply cant buy because housing is so expensive (the average house where I live was £60k in 1997 and now it is £175k- even after 2008/9 price drops). I just dont understand how this can happen? How can the price of a house where I live go from £60k to £175k. It simply makes no sense and it really makes me sad because I feel like I have nowhere to call home and I am just rolling through life with nothing to my name except thousands of pounds worth of rent paid

I had decided to work in business but I have since decided to train for a job which will allow me to emigrate to canada once I have one years experience. I dont want to go so I hope we can have a housing crash (15% would be a start) over the next 2 years before I actually am in a positon to emigrate.

I cant wait for the day when I can buy a nice flat for £90k and not £120k. That would be amazing for me and make me so muc happier.

I was thinking we need the following "fuel" for a further plunge in house prices:

1, Interest rates rise - looking possible

2, Some inflation - by squeezing household budgets we can get more repossessions. I am happy with inflation as long as HPI is not going up. Again looking good.

3, Tight lending - low mortgage approvals means this is looking good.

4, Job loses - April is going to be the first big wave of people being made unemployed in the public sector

In the longer term we need more houses being built and that isnt looking good. BUT in the short term it is looking like all the factors above are going converge in around June or July. I expect rates to raise around then, lending will still be tight, unemployment will of risen (with a high turnover too which is what we need) and inflation will still be squeezing household budgets in general.

It is looking like the perfect storm where people's budgets are being squeezed by higher mortgage repayments and inflation (espically on food and petrol). Meanwhile people will lose their jobs and struggle with their mortgages and the inflation even more, and lending will be very strict so there will be a shortage of buyers.

A crash is coming, it has taken longer than I wanted, but I am more confident that I have ever been. Inflation seems to of been the final straw that will break the camels back. July 2011 through to december 2012 could see 25% declines.

This time though, unlike in 2009/10, the decline cannot be stopped by government policy (low IR, QE and fiscal stimulus). The government is out of tricks, there is no more they can do to prevent this crash.

It is coming!!!

Wow, I managed to convince myself through this post. It is coming!!!

[MC Fur Q]

Yeah it is coming and you just have to be patient to get your flat.

Don't let this situation depress you though. You're only talking about a place to live. Yes it'll be nice to have your own place but it's not going to change your life - it's how you live in it that matters.

Unless of course you're desperate to get your affordable flat and then turn bullish so you can flip it for £200k in a year?

[Englaender]

Unless of course you're desperate to get your affordable flat and then turn bullish so you can flip it for £200k in a year?

That pretty much describes my mate. Was looking for flat in E14 as he was looking to move back from Jersey. Started looking early 2009 and was throwing around offers around 25% below advertised price on repos and places with supposedly 'motivated sellers'. Tended to get dismissed out of hand but was adamant the market was overvalued. Needless to say, as soon as he found somewhere, despite paying 20k more than he initially said it was worth, suddenly changed his outlook to bull and is hoping for house prices to rise in the short term. Despite claiming this was somewhere he could see himself living for the next 10 years. Hmmm....

[catsick]

I don't know why you think Canada is a land of milk and honey as far as housing goes, if you want to live somewhere decent like Vancouver you will find it is just as pricey as the south east of England and in parts its much much more expensive, couple this with a currency that has appreciated from 2.5 to the pound to 1.6 over a few years and any money you take over will not go far, of course you could argue that there are places where houses are cheap in Canada but then they are really in the middle of nowhere and it would be easier just to move to barnsley where its also cheap in the UK ......

[longtomsilver]

I don't know why you think Canada is a land of milk and honey as far as housing goes, if you want to live somewhere decent like Vancouver you will find it is just as pricey as the south east of England and in parts its much much more expensive, couple this with a currency that has appreciated from 2.5 to the pound to 1.6 over a few years and any money you take over will not go far, of course you could argue that there are places where houses are cheap in Canada but then they are really in the middle of nowhere and it would be easier just to move to barnsley where its also cheap in the UK ......

Sounds to me like this... the lad is just starting out in life and will be packing his suitcase with clothes and bags of enthusiasm not much more in the way of transferable wealth. So for him 2.5 or 1.6 is less of an issue. Can won't run out of food or fuel in the near future, the same can't be said for Blighty.

[RichB]

A crash is coming, it has taken longer than I wanted, but I am more confident that I have ever been. Inflation seems to of been the final straw that will break the camels back. July 2011 through to december 2012 could see 25% declines.

This time though, unlike in 2009/10, the decline cannot be stopped by government policy (low IR, QE and fiscal stimulus). The government is out of tricks, there is no more they can do to prevent this crash.

It is coming!!!

Wow, I managed to convince myself through this post. It is coming!!!

Yeah, that's what I thought 5 years ago. Still waiting. Still getting more depressed.

Get on your horse while you can. Just go. Soon as. If it doesn't work, it doesn't work, but you'll have tried something new. Might '******up' your life, might not. So might staying.

Best of luck either way

[chrismar]

We too are in the "prices in our area also ... have got to drop soon" camp.alas we seem to. Be on one of the southern end of mainland towns wfere prices in the nice part of the town are holding their end up too strongly.

However we watch and sit tight knowing the cash which hs in the banks is not making much interest ... But it Is also not depreciating

Out time like yours willcome ... Just be patient

[Misanthrope]

Back to basics:

Keep it legal.

Stay true to yourself.

Seize the day.

Quit obsessing about houses, it'll only hold you back - it's just a roof over your head.

Get ahead by endeavour.

Houses don't make you. There a place to put what you make.

[Unsafe As Houses]

Thanks to the OP for the share - it encapsulates a lot of the probs with the UK today from a young person's perspective. I'm a bit older than you but emphasise with your situation.

I'm not sure how great Canada is though based on my anecdotal experience - my trade is research and data analysis and my last 2 managers have been Canadian - if Canada's the land of milk and honey what the hell are they doing here? Perhaps the grass is greener on the other side of the fence but when you get there ...

Edited February 27, 2011 by Unsafe As Houses

[Frank Hovis]

I can see how depressing it is for somebody who doesn't remember the last one.

I started working in 88, and even before that had received media coverage of house prices only ever go up and, moving to work in London on a starter wage, couldn't see how I could afford anything.

Some of my peers were going in with friends to buy somewhere, others had their parents chip in (before the phrase "Bank of mum and dad"), some were buying remote places guaranteeing a long commute (Reading, somebody was even looking at Telford because it was cheap!).

We were all envious of those who could afford to buy. Prices were going up, they were on the ladder and we weren't. We had missed our one chance to buy somewhere. That was it.

Only it wasn't. It all came tumbling down. All those people got stuck in these starter homes in grotty areas and had to wait years before they had enough money to clear the negative equity and sell up to move into rented somewhere nice. The financial wizards now looked like mugs.

I ending up buying the flat I was renting in '96 or so because it was nearly half the cost of renting it. My landlady had been trying to sell it for about four years IIRC and it was about 2/3rds what she had originally asked for it.

And in all that time since the first falls the papers had been saying buy now before they go up again.

The majority of the media and property "experts" will always say "now" is the time to buy. Make your own mind up. When I was paying £650 rent and could pay £350 mortgage, then I bought.

[silver surfer]

Hi guys,

This is my first post, and I just wanted to say what a great site and it is great to find a site with people who share my views on the corruption present in the housing market at present.

I am in my 20's and simply cant buy because housing is so expensive (the average house where I live was £60k in 1997 and now it is £175k- even after 2008/9 price drops). I just dont understand how this can happen? How can the price of a house where I live go from £60k to £175k. It simply makes no sense and it really makes me sad because I feel like I have nowhere to call home and I am just rolling through life with nothing to my name except thousands of pounds worth of rent paid

I had decided to work in business but I have since decided to train for a job which will allow me to emigrate to canada once I have one years experience. I dont want to go so I hope we can have a housing crash (15% would be a start) over the next 2 years before I actually am in a positon to emigrate.

I cant wait for the day when I can buy a nice flat for £90k and not £120k. That would be amazing for me and make me so muc happier.

I was thinking we need the following "fuel" for a further plunge in house prices:

1, Interest rates rise - looking possible

2, Some inflation - by squeezing household budgets we can get more repossessions. I am happy with inflation as long as HPI is not going up. Again looking good.

3, Tight lending - low mortgage approvals means this is looking good.

4, Job loses - April is going to be the first big wave of people being made unemployed in the public sector

In the longer term we need more houses being built and that isnt looking good. BUT in the short term it is looking like all the factors above are going converge in around June or July. I expect rates to raise around then, lending will still be tight, unemployment will of risen (with a high turnover too which is what we need) and inflation will still be squeezing household budgets in general.

It is looking like the perfect storm where people's budgets are being squeezed by higher mortgage repayments and inflation (espically on food and petrol). Meanwhile people will lose their jobs and struggle with their mortgages and the inflation even more, and lending will be very strict so there will be a shortage of buyers.

A crash is coming, it has taken longer than I wanted, but I am more confident that I have ever been. Inflation seems to of been the final straw that will break the camels back. July 2011 through to december 2012 could see 25% declines.

This time though, unlike in 2009/10, the decline cannot be stopped by government policy (low IR, QE and fiscal stimulus). The government is out of tricks, there is no more they can do to prevent this crash.

It is coming!!!

Wow, I managed to convince myself through this post. It is coming!!!

I can go to Canada anytime I want (dual nationality), but I'm staying here. Overall I think Canada's marginally better than the UK, but the key word is "marginally". And if your main reason for moving is affordable housing then think again. Yes there are some lovely homes at astonishingly low prices in Canada, but there's a reason for that, they're hundreds of miles from the nearest job! If on the other hand you want to live in beautiful and thriving Vancouver then house prices aren't that different from the nicer and more commutable bits of Surrey.

[Superted187]

Gonna throw in my 2 pence here.

I'm in the same age bracket as the OP - and am basically in the same situation, except that I grew up in Ealing West London, where a 3 bed house will cost you around £450k. (The area where my parents live is now full of rich men in their 60's on their second marriages with 40 something trophy wives).

Anyway, about 18 months ago I moved to Reading as I would be paying less rent, and I have actually worked in Oxfordshire (still do) for years - my gf is a Teacher in Reading.

We're now looking at Relocating, but out of the South East and not to another country! We currently rent a small, noisy 1 bed flat. We have been looking for a new place to rent in Reading for about 6 months, but nothing is perfect, which is massively frustrating as when you rent you can't improve the property (e.g. I find a perfect flat but discover that the shower pressure is ********. Sounds trivial but the fact is I have to live there!)

I also feel that our problems are compounded by Local Authority and Government's lack of conviction to re-develop or to improve town planning. For example, in Reading, building another Bridge over the River Thames at the very western edge of the city, they would massively reduce congestion in the town centre, and would make a stack of housing more desirable to a lot of people. But they won't ever do it - instead they'll just keep forcing everyone over the two Victorian bridges in the town.

We're not willing to pay much more than what we pay now - I do not see the point in working and renting and having nothing left in the bank at the end of each month. So now we're looking at relocating to the Midlands, which is where my gf is originally from.