Jump to content
House Price Crash Forum

Am I a dreamer? Will house prices come down?


Recommended Posts

  • Replies 163
  • Created
  • Last Reply

Top Posters In This Topic

5 hours ago, TheCountOfNowhere said:

Why ?

1998: Buy a house

2007: Sell house, buy gold

2010: Sell gold, buy shares/bonds

2014: Buy £1000 of bitcoin

2020: Sell bitcoin buy a private jet/island a 100 yacht. ( miss this one out )

2020: Sell share in Jan, buy them all back in May

2021/2022: Cash everything in buy house

You need to be desperate to buy the right stuff at the right time, not the wrong stuff at the wrong time.

It's pretty simple.

House prices simply don't matter if you can do all of this correct! LOL

Link to post
Share on other sites
2 minutes ago, renting til I die said:

Yep, I wonder if the Government will do some sort of bail out for all the poor LLs who can't get tenants! Nice to see that you are still here winkie.

Yes, a sort of "set-aside" scheme for empty rentals.

Link to post
Share on other sites

I am fairly certain that the stamp duty holiday will not be extended.  If it isn’t, it’s game over.  Multiple chains will break and the bubble will pop.  It’s unbelievable that the bubble has continued to inflate over the last year.  A 3 bed terrace in my area is £350.  How is this even possible?  Who are buying these?  Furlough will not finish, it will be transferred to UBI.

I am 100% certain that house prices will fall this year.  There will be greater falls next year.  I still stand by my theories, from the start of Covid, that the economy will crash and reset in 2025.

At the end of the day, TPTB have control of the housing market and will do what with it what suits.  I think they will let it go.  It’s just a question of when they stop kicking the can.

Link to post
Share on other sites
6 hours ago, winkie said:

Falling rents will be the catalyst of falling property prices......one thing leads to another.;)

The talk is rents will increase.  There will be a huge demand for rental properties as mass unemployment hits.  HMO’s will be popular for renters and are the creme of the crop for investors right now.  

Link to post
Share on other sites

I have no idea what’s going to happen. I saved enough cash to buy the place I want for cash but the prices in the area have gone up 30% in the last year. So a drop in some areas only brings us back to where we were. At the moment it seems madness to buy in these areas as there is a shortage of supply as anything for sale sells fast. I assume these people are not on Furlough. What is possible is that many of these houses never compete before the SD holiday ends. People may then pull out of sales as Furlough ends and things get harder.

Link to post
Share on other sites
3 minutes ago, xxxx said:

It’s just a question of when they stop kicking the can.

No once you kick the can you cannot always stop it at the exact point you want to stop it. Government can interfere buy the Jennie out of the bottle takes on its own life.  

Link to post
Share on other sites
5 minutes ago, xxxx said:
6 hours ago, winkie said:

 

The talk is rents will increase.  There will be a huge demand for rental properties as mass unemployment hits.  HMO’s will be popular for renters and are the creme of the crop for investors right now

ūüėÜ ūüėā ūüėĻ¬†

Link to post
Share on other sites
56 minutes ago, renting til I die said:

majority

Hey there,

This is my first post (well, first visit) here for quite some time! Pretty much stopped visiting HPC because of all the Brexit moaning! 'its going to be the best thing' 'its going to be the worst thing' ect ect! (I was always of the Mervyn King school of thinking, that Brexit won't really make much of a difference, up or down, in the long term!).

Anyway not going to rant over that and thought it might be safe to come back now that Brexit is finally done!

So, your question...

House 'Prices' may never come down! OF course the real question is in relation to what do you want to them to come down too? Your salary? Your savings?

I still believe that house 'values' are too high but prices do not need to come down as such. Although it is certainly not impossible, the Government have shown that they will pretty much pull out all of the stops to stop house prices falling. For most people their home is still a majority of their wealth and I tend to think that the Government will destroy the currency before letting nominal house prices drop by anything over say 5%! LOL.

Of course the other question is what value do you want houses to drop too? How will you know they have dropped enough for you? Generally, if there was a large drop in prices, no-one would want to buy because they would think that prices would drop more, etc.

The main thing I learnt here was that worrying about what you can't control is a complete waste of time. If you have funds to buy somewhere you want to live and you are not getting yourself up to the eyeballs in debt, then do what you want to. Don't worry about something that may or may not happen. If you can't afford to buy, then stop lamenting and start making enough cash to buy that home you want or just live the best life that you can!

I still rent. Currently at a rental yield of 3.2%, so very reasonable. This is the main way I value property over the longer term. I invested the small deposit that I had saved into stocks and over the last 10 years have accumulated equity to a similar/if not a bit more than others have in buying a home. People mostly misunderstand compounding but the biggest cost to buying a home is the opportunity cost! Property investors use interest only mortgages for good reason. It is the only way to make above average returns from property in the longer term, you need the leverage!

I have gone over the average post word count now so will stop there and I may check in again sometime.

"I invested the small deposit that I had saved into stocks and over the last 10 years have accumulated equity to a similar/if not a bit more than others have in buying a home."

and the rest quite considerably.

 

"biggest cost to buying a home is the opportunity cost!"

and the cost of ownership compared ro renting.

Link to post
Share on other sites
1 hour ago, renting til I die said:

The main thing I learnt here was that worrying about what you can't control is a complete waste of time. If you have funds to buy somewhere you want to live and you are not getting yourself up to the eyeballs in debt, then do what you want to. Don't worry about something that may or may not happen. If you can't afford to buy, then stop lamenting and start making enough cash to buy that home you want or just live the best life that you can

I think the main issue is that most people on this forum (and the wider country) can't afford to buy which does restrict the type of life you an lead - that was certainly the case for me.

Its also not that easy to save up the cash if you're giving a big chunk of your monthly salary to a LL. I can understand why people are bitter and this forum is somewhat of an outlet.

Ironically this pandemic has been good for me in terms of savings as I moved out of London and am staying with my sister living rent free. I am now in a position where I would have a deposit for a flat in London and the longer my office stays closed and me WFH, the more I am saving. 

 

Link to post
Share on other sites
24 minutes ago, Sprrite said:

I think the main issue is that most people on this forum (and the wider country) can't afford to buy which does restrict the type of life you an lead - that was certainly the case for me.

Its also not that easy to save up the cash if you're giving a big chunk of your monthly salary to a LL. I can understand why people are bitter and this forum is somewhat of an outlet.

Ironically this pandemic has been good for me in terms of savings as I moved out of London and am staying with my sister living rent free. I am now in a position where I would have a deposit for a flat in London and the longer my office stays closed and me WFH, the more I am saving. 

 

true, I will be leaving the south and moving back up north - better standard of living and less stress in regards to disposible income. 

Link to post
Share on other sites
2 hours ago, renting til I die said:

majority

Hey there,

This is my first post (well, first visit) here for quite some time! Pretty much stopped visiting HPC because of all the Brexit moaning! 'its going to be the best thing' 'its going to be the worst thing' ect ect! (I was always of the Mervyn King school of thinking, that Brexit won't really make much of a difference, up or down, in the long term!).

Anyway not going to rant over that and thought it might be safe to come back now that Brexit is finally done!

So, your question...

House 'Prices' may never come down! OF course the real question is in relation to what do you want to them to come down too? Your salary? Your savings?

I still believe that house 'values' are too high but prices do not need to come down as such. Although it is certainly not impossible, the Government have shown that they will pretty much pull out all of the stops to stop house prices falling. For most people their home is still a majority of their wealth and I tend to think that the Government will destroy the currency before letting nominal house prices drop by anything over say 5%! LOL.

Of course the other question is what value do you want houses to drop too? How will you know they have dropped enough for you? Generally, if there was a large drop in prices, no-one would want to buy because they would think that prices would drop more, etc.

The main thing I learnt here was that worrying about what you can't control is a complete waste of time. If you have funds to buy somewhere you want to live and you are not getting yourself up to the eyeballs in debt, then do what you want to. Don't worry about something that may or may not happen. If you can't afford to buy, then stop lamenting and start making enough cash to buy that home you want or just live the best life that you can!

I still rent. Currently at a rental yield of 3.2%, so very reasonable. This is the main way I value property over the longer term. I invested the small deposit that I had saved into stocks and over the last 10 years have accumulated equity to a similar/if not a bit more than others have in buying a home. People mostly misunderstand compounding but the biggest cost to buying a home is the opportunity cost! Property investors use interest only mortgages for good reason. It is the only way to make above average returns from property in the longer term, you need the leverage!

I have gone over the average post word count now so will stop there and I may check in again sometime.

Hi I'd like 2016 prices. I think they were fairly reasonable.

For example there is one house I like and it's up for sale for £250k in 2016 the same house was up for sale for £165k. Before Covid it probably would have gone up for sale for £210k.

I cant afford £210k. I thought oh they might come down after brexit or new year. Wasn't expecting £40k to be added on. There is no way I can afford £250k.

I remember back in 2016 think wow £165k for that house, jeez expensive. As 2 years before that they were £135k.

Please bear in mind I never had a deposit between 2012-2021. 

Only now do I have a good deposit. 

 

Link to post
Share on other sites
1 hour ago, Sprrite said:

I think the main issue is that most people on this forum (and the wider country) can't afford to buy which does restrict the type of life you an lead - that was certainly the case for me.

Its also not that easy to save up the cash if you're giving a big chunk of your monthly salary to a LL. I can understand why people are bitter and this forum is somewhat of an outlet.

Ironically this pandemic has been good for me in terms of savings as I moved out of London and am staying with my sister living rent free. I am now in a position where I would have a deposit for a flat in London and the longer my office stays closed and me WFH, the more I am saving. 

 

Yes I know lots of people working from home or on furlough who have saved loads of money.

Link to post
Share on other sites
1 hour ago, satsuma said:

I have no idea what’s going to happen. I saved enough cash to buy the place I want for cash but the prices in the area have gone up 30% in the last year. So a drop in some areas only brings us back to where we were. At the moment it seems madness to buy in these areas as there is a shortage of supply as anything for sale sells fast. I assume these people are not on Furlough. What is possible is that many of these houses never compete before the SD holiday ends. People may then pull out of sales as Furlough ends and things get harder.

This is true yes I agree. I also have another friend who tried to get a big mortgage for a cottage but the lender withdrew the offer after their valuation person went and valued the house.

Link to post
Share on other sites
1 hour ago, xxxx said:

The talk is rents will increase.  There will be a huge demand for rental properties as mass unemployment hits.  HMO’s will be popular for renters and are the creme of the crop for investors right now.  

True. I'm seeing alot of house shares. I'd hate to live in one. Rents near where I live are about £550 for a flat. £625 for 2 bed terrace. £875 for 3 bed semi-detached. 

These house shares are £375 for a bedroom. 

Link to post
Share on other sites
4 minutes ago, Rachel88 said:

Hi I'd like 2016 prices. I think they were fairly reasonable.

For example there is one house I like and it's up for sale for £250k in 2016 the same house was up for sale for £165k. Before Covid it probably would have gone up for sale for £210k.

I cant afford £210k. I thought oh they might come down after brexit or new year. Wasn't expecting £40k to be added on. There is no way I can afford £250k.

I remember back in 2016 think wow £165k for that house, jeez expensive. As 2 years before that they were £135k.

Please bear in mind I never had a deposit between 2012-2021. 

Only now do I have a good deposit. 

 

house prices = household income +rates + supply/demand 

look at the rates in 2016 compared to 2021, there's your answer on why they have increased. 

Link to post
Share on other sites
2 hours ago, xxxx said:

I am fairly certain that the stamp duty holiday will not be extended.  If it isn’t, it’s game over.  Multiple chains will break and the bubble will pop.  It’s unbelievable that the bubble has continued to inflate over the last year.  A 3 bed terrace in my area is £350.  How is this even possible?  Who are buying these?  Furlough will not finish, it will be transferred to UBI.

I am 100% certain that house prices will fall this year.  There will be greater falls next year.  I still stand by my theories, from the start of Covid, that the economy will crash and reset in 2025.

At the end of the day, TPTB have control of the housing market and will do what with it what suits.  I think they will let it go.  It’s just a question of when they stop kicking the can.

I hope your right. I'm 33 this year and would like to start a family. These house prices, scare me. I fear we won't be able to afford children.

The terraces are not too bad near me. Between £125-£135. 3 bedroom semi-detached are £195- £250k

I'm not rich. I have a low paid job and my partner is not earning mega money. 

Link to post
Share on other sites
2 hours ago, mrlegend123 said:

I use homelet to track rents on a monthly basis. only London has turned negative. 

when all areas turn negative, you know the end is near. 

This is interesting. I'll do this. I'll look up Edinburgh. Rents have always been high there. Dublin will be interesting to look at too. Thanks.

Link to post
Share on other sites
7 hours ago, Smiley George said:

Welcome @Rachel88, strap yourself in!

The Covid pandemic perhaps should've been the pin to ***** the uk housing bubble. Unfortunately for those wanting/needing a house price correction the government and central bank interventions have conspired to pump an illogical bubble even further. The SDLT holiday, furlough scheme, $50k bounce back loans, further QE have all flooded the country with a stash of free money which was only ever going to go one place - assets.

If you add in continued record low interest rates and the ongoing conversation around negative interest rates, you can see that TPTB are not quite done yet in their efforts to support asset (house) prices - it's all we have in terms of an economy.

Personally I don't see how the govt can defend continued tax payer subsidies to allow people to purchase overpriced housing stock given the parlous fiscal position this country currently finds itself. If anything, the govt has the perfect fall guy in Coronavirus to allow for a large correction in prices - but they're sh*t scared of upsetting boomers and the bankrupting the country.

So to answer your questions:

1. Are you a dreamer? Maybe, but you're not the only one.

2. Will house prices come down? Yes - but don't ask me when; a crash could start in 6 months or 6 years or 60 years.

It's the hope I can't stand.


I think you and others greatly over-estimate the influence these external factors have had on prices this year. 
 

Transactions were down 50% in 2020 and the only people I know that moved house were 30/40 something couples with young kids looking to have a better set up for future lockdowns.

I quizzed these people about their thoughts on prices, interest rates and the stamp duty savings but most were completely oblivious to these wider issues relating to property prices or an elusive crash. 
 

The stamp duty saving is buttons to the overwhelming majority of people that buy and sell. I don’t see how you can argue it’s influenced prices by more than a fraction of a percent. 

Prices will fall 5% this year but recover very quickly. There’s still plenty of affordable housing across the majority of the UK.

Link to post
Share on other sites
1 minute ago, mrlegend123 said:

house prices = household income +rates + supply/demand 

look at the rates in 2016 compared to 2021, there's your answer on why they have increased. 

You mean the interest rate?

Yes I'm always shocked that it went down in 2009 and never went back up. 

America tried to increase theirs but we didn't. Or Europe. 

I think Africa has one of the best interest rates at the minute. 

I just don't know if it would ever go up. It would need to go up to 5% to really start affecting people.

Link to post
Share on other sites
2 minutes ago, Pmax2020 said:


I think you and others greatly over-estimate the influence these external factors have had on prices this year. 
 

Transactions were down 50% in 2020 and the only people I know that moved house were 30/40 something couples with young kids looking to have a better set up for future lockdowns.

I quizzed these people about their thoughts on prices, interest rates and the stamp duty savings but most were completely oblivious to these wider issues relating to property prices or an elusive crash. 
 

The stamp duty saving is buttons to the overwhelming majority of people that buy and sell. I don’t see how you can argue it’s influenced prices by more than a fraction of a percent. 

Prices will fall 5% this year but recover very quickly. There’s still plenty of affordable housing across the majority of the UK.

It has to be affordable to my salary. And I wouldn't move away from my family and I don't think my partner would either.

I agree about the 30/40 year old be the ones who are moving. There are streets that I would love to live on but all- and I really do mean all are owned by older people 65+. I drive down the streets nearly every day. 

Link to post
Share on other sites
6 minutes ago, Rachel88 said:

You mean the interest rate?

Yes I'm always shocked that it went down in 2009 and never went back up. 

America tried to increase theirs but we didn't. Or Europe. 

I think Africa has one of the best interest rates at the minute. 

I just don't know if it would ever go up. It would need to go up to 5% to really start affecting people.

mortgage rates not the base rate. However, rates are now higher than 2016. who knows what will happen 

Link to post
Share on other sites
59 minutes ago, Rachel88 said:

I hope your right. I'm 33 this year and would like to start a family. These house prices, scare me. I fear we won't be able to afford children.

The terraces are not too bad near me. Between £125-£135. 3 bedroom semi-detached are £195- £250k

I'm not rich. I have a low paid job and my partner is not earning mega money. 

Ok. Out of the three typical life goals (home ownership, children and retirement) it is doable for most to achieve only 1 or 2 (and retain a decent standard of living) out of 3 at the moment if you play conventionally.

Now a little story which you might want to research.

Two families.  Both have identical circumstances apart from income. 2 kids, rent. One has a household income of 50k, one 18k. 

gross difference 32k in salary.

net difference - 8k.

Huh? That can’t be right.....

the key is universal credit. Taxes taketh away the earnings from the 50k earners. 

universal credit tops up the 18k earners, including paying practically their entire rent.

But .... pension contribs are 100% deductible from earnings for the purposes of UC. 

So, 50k earner Salary sacrifices 32k into pension every year. The whole lot goes into the pension. And they qualify for the same amount of UC as the other family.

now they have kids, their housing is paid for and their retirement is. Yes, they have to economise, but it’s doable.

DYOR. I could be wrong and this is not advice. 

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.