Fast Crash Or Slow Crash - Poll

[renting til I die]

No crash

That's right, because everyone is just going to rent to each other innit.

I'm voting for a bit of both. However, if IR's go up fast and people start losing jobs, it could be very fast indeed.

[winkie]

Depends.....what alternatives to invest in, the cost of debt, the supply of cash.....to be honest if living in a place the value is zero, it costs money to keep.

......the only price that matters is what it costs to buy and the hyperthetical future selling price......when the price goes down everything will go down apart from the debt outstanding.

[AvoidDebt]

Think it's all down to brexit to be honest. In which case it should be lightening quick for the first two years and then shoot up again as the moneylenders adjust themselves to the new reality and the UK (London) positions itself as the new Singapore. Failing brexit may well need some other lehmans type event to topple.*

* This is not financial advice. I am the most clueless person in property investment.

[winkie]

Telling the young who are more likely to vote to stay in the EU that house prices will fall if we leave is an odd thing to promote to the public....now't so queer as folk.

[Venger]

On one level I say 'fast', as in I believe a house could appear on market today, where seller accept a HPC price. Fewer BTL buyers on the scene (my view) for seller to sell to.

Saw that happen in 2012, where seller (inheritor) cut and cut asking price by total £65K-£70K... down from £250,000. Then accepted a cheeky FTB's offer some £27K below that. He wanted it gone, to get the money, in a patch of time where market was slow / coolish.

However that 1 sale against a slow market didn't impinge at all on wider values/indices at all. The FTBs got great HPC value. 2001 price. Now probably worth £300,000 in the minds of many in the market, after 2013 HTB, which really was only a signal for greedy BTLers to go on a mad double down speculation fest.

Willing to accept some areas (North) had some decent correction already. Saw a house in the North just the other day that I would have bought in an instant some as a younger man. Wrong area for me now. It's quite good HPC value. Sold STC. Got me sort of excited, for in previous years the BTLers would have been all over it. Looks like a flipper that's been caught out. Not going to list it up for I'm sending details out to a few contacts first.

Slow for indices. Speedy plunge at higher end, but slow grind after that. Also suspect indices will be 'managed' anyway to not show extent of the HPC, and keep banks looking good/very solvent for markets and investors. Avert panic, and allow banks to fresh lend. Auction sales not often included in making up LR house price records are they? What other sales might they keep off records to monitor the HPC. Bank repos where offer made?

[MrMonkey]

Even a small interest rate rise would (in my view) shake confidence. When IRs were 5% a rise of 0.5% was a relatively small rise. Now that rates are 0.5% a rise to 1% would be a doubling of the base rate, with a large impact on payments for trackers and SVRs. People are now conditioned to think of a 0.5% base rate as 'normal', and any challenge to this paradigm would force people to consider things differently, inevitably calling into question just how affordable current prices are. This is why we will probably not see a rise anytime soon.

We may see the BoE and Government pumping more air into the market, but I can not see BTL continuing with its recent enthusiasm. Changes to interest relief will change the sums, banks are tightening lending criteria, and that extra 3% needs to be found on top of the mortgage financing (so if you buy a £200k flat then £6k will need to be paid on top of the 20% deposit and higher IRs). Maybe rents will be raised to cover the difference, but I think that they would already have been if it were possible. Prospective landlords may want to join the fray, but if they can not make the numbers add up on paper then will they be able to secure the finance to do so?

[renting til I die]

Government could always backtrack and relax the interest relief. Has anyone thought of that? Of course that would just be more can kicking but wouldn't put it past the government.

[Si1]

Government could always backtrack and relax the interest relief. Has anyone thought of that? Of course that would just be more can kicking but wouldn't put it past the government.

Exactly. I wouldn't be surprised.