West Bromwich Albino Posted May 23, 2006 Share Posted May 23, 2006 A quick question: When prices do start droppping when will everyone know when to buy and surely if there are mobs of us with savings ready to purchase when the time IS right, won't this create competition, pushing prices up? Quote Link to comment Share on other sites More sharing options...
MarkG Posted May 23, 2006 Share Posted May 23, 2006 I don't remember a lot of competition in the bottom of the last crash: the reason why prices continued to drop for years was that no-one gave a crap about houses anymore. No-one I knew who bought a house had to fight off armies of STRs and BTLs... they just took their time finding a house they liked at the right price and bought it. Quote Link to comment Share on other sites More sharing options...
Cornwall Sceptic Posted May 23, 2006 Share Posted May 23, 2006 I don't remember a lot of competition in the bottom of the last crash: We had a house for sale in 92/93 for 18 months it wasn't that we were asking too much just nobody wanted to buy we had about 4 viewings in 18 months luckily the 4th bought it CS Quote Link to comment Share on other sites More sharing options...
crash 2005 Posted May 23, 2006 Share Posted May 23, 2006 A quick question: When prices do start droppping when will everyone know when to buy and surely if there are mobs of us with savings ready to purchase when the time IS right, won't this create competition, pushing prices up? THERE ARE INFINITELY MORE PEOPLE ON THE LADDER OF DOOM, COMPARED WITH THE LIKES OF US TRYING TO BUY AT A REASONABLE PRICE, SO NO PROBLEM THAT I CAN SEE. Quote Link to comment Share on other sites More sharing options...
jonathan trees Posted May 23, 2006 Share Posted May 23, 2006 This is precisely what I have been arguing. As soon as there is a slight fall in house prices this will encourage all the FTBs and STRs who have been patiently waiting on the sidelines waiting for the crash to take advantage of falls in house prices and get back onto the property ladder which will force house prices back up. This is why there won't be a crash in property prices like in the past. The property market does not need FTBs to prop up the market and instead it is the recent emergence of the BTL landlord who will view any falls in house prices as a buying opportunity and snap up properties causing house prices to rise back up. This is all very bad new for the STRs because they had assumed that a property crash would result in significant falls in house prices which would enable them to buy a property very cheaply but it is very unlikely that house prices will fall by more than 10% from the peak and the housing market is far more stable now than it was in the past. Quote Link to comment Share on other sites More sharing options...
AteMoose Posted May 23, 2006 Share Posted May 23, 2006 the argument is, the existance of the HPC website, means prices havent gone up as much as they should, so they wont crash asmuch. Disband HPC and you will get your crash, too many believers and you dont get a crash Quote Link to comment Share on other sites More sharing options...
MarkG Posted May 23, 2006 Share Posted May 23, 2006 The property market does not need FTBs to prop up the market and instead it is the recent emergence of the BTL landlord who will view any falls in house prices as a buying opportunity and snap up properties causing house prices to rise back up. Blah, blah, blah. BTLs won't have a hope in hell of getting vast mortgages in a property crash, and few would want to anyway. It takes a real sucker (or a very brave man) to take out a huge leveraged bet on a depreciating asset in a bear market... and by that point the banks will have no interest in lending to them. Quote Link to comment Share on other sites More sharing options...
Ethel Posted May 23, 2006 Share Posted May 23, 2006 A quick question: When prices do start droppping when will everyone know when to buy and surely if there are mobs of us with savings ready to purchase when the time IS right, won't this create competition, pushing prices up? There are far too many morons who are currently clambering over themselves to buy a "safe bet" investment at the height of the market who will also be running for the hills when prices crash, seeing it as a "fools game". Suckers! Quote Link to comment Share on other sites More sharing options...
teddyboy Posted May 23, 2006 Share Posted May 23, 2006 (edited) Blah, blah, blah. BTLs won't have a hope in hell of getting vast mortgages in a property crash, and few would want to anyway. It takes a real sucker (or a very brave man) to take out a huge leveraged bet on a depreciating asset in a bear market... and by that point the banks will have no interest in lending to them. Mark, This is prime example of the narrow-mindedness of most people. They cannot even see that IT DOES NOT MAKE SENSE TO BUY SOMETHING THAT IS FALLING IN PRICE!!!! As a business or investment that is. Its a risk for a buyer who wants a home. Should he buy now, on the offchance that they wont drop any further, or wait a little longer? The difference is, us SENSIBLE FTB's and STR have a shit load of cash, which to a bank is a shit load of RISK. If we are prepared to cover a big chunck of that risk then we have a great chance. I personally think that the BTL mortgage will be redefined in a FALLING MARKET. I just cannot see where the Mortgage Lenders are going to benefit? I could get a BTL and if it goes wrong could I just hand back the keys to the mortgage lender? Or would it be left to me to sell the house to pay them back what I borrowed? TB Edited May 23, 2006 by teddyboy Quote Link to comment Share on other sites More sharing options...
MarkG Posted May 23, 2006 Share Posted May 23, 2006 I could get a BTL and if it goes wrong could I just hand back the keys to the mortgage lender? You could, but you'd still have to repay the difference with interest. As someone said earlier today, the banks were still hounding people for money years after the last crash. Either you pay up, come to an agreement to pay part of the money if they write off the rest, disappear abroad and hope they don't find you, or go bankrupt. Quote Link to comment Share on other sites More sharing options...
the_duke_of_hazzard Posted May 23, 2006 Share Posted May 23, 2006 This is precisely what I have been arguing. As soon as there is a slight fall in house prices this will encourage all the FTBs and STRs who have been patiently waiting on the sidelines waiting for the crash to take advantage of falls in house prices and get back onto the property ladder which will force house prices back up. This is why there won't be a crash in property prices like in the past. The property market does not need FTBs to prop up the market and instead it is the recent emergence of the BTL landlord who will view any falls in house prices as a buying opportunity and snap up properties causing house prices to rise back up. This is all very bad new for the STRs because they had assumed that a property crash would result in significant falls in house prices which would enable them to buy a property very cheaply but it is very unlikely that house prices will fall by more than 10% from the peak and the housing market is far more stable now than it was in the past. 1) Your average punter will not buy into a falling market (cf dot com crash, or indeed any crash in any market previously). 2) Where will BTL'ers get the leverage to buy more property? They'll be too busy trying to offload their properties to minimise their losses as prices fall. 3) If prices do fall, it'll most likely be because interest rates rise and/or liquidity dries up (ie the cash taps are stopped). In this event, getting loans will be much harder, and the competition to buy property and push prices up will disappear. Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted May 23, 2006 Share Posted May 23, 2006 This is precisely what I have been arguing. As soon as there is a slight fall in house prices this will encourage all the FTBs and STRs who have been patiently waiting on the sidelines waiting for the crash to take advantage of falls in house prices and get back onto the property ladder which will force house prices back up. There is plenty of news coming out of Australia about FTB's re-entering the market now that prices have dropped. Is it pushing prices back up again? Is it f*ck. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted May 23, 2006 Share Posted May 23, 2006 A quick question: When prices do start droppping when will everyone know when to buy and surely if there are mobs of us with savings ready to purchase when the time IS right, won't this create competition, pushing prices up? Look at the inertia in the belief that house prices will only ever go up and up. Why shouldn't there be similar inertia in the belief that house prices will only ever keep dropping? And how did prices get so low before and stay so low? And most importantly, how many of the sheeple, who far outnumber anyone actually prepared to research the market, are going to spot when the time is right? Me personally, I'll be watching to move before BTL makes sense again. Billy Shears Quote Link to comment Share on other sites More sharing options...
Robbrent Posted May 23, 2006 Share Posted May 23, 2006 I think the point you miss with he FTB argument is that if and when the market crashes it tends to take the economy with it, this time more so as so much is dependant on HPI, retail spending etc, so everyone is feeling poorer, my experience of last time was that property just did not sell for ages, Quote Link to comment Share on other sites More sharing options...
BillyShears Posted May 23, 2006 Share Posted May 23, 2006 There is plenty of news coming out of Australia about FTB's re-entering the market now that prices have dropped. Is it pushing prices back up again? Is it f*ck. Yep. Not much use having lots of potential purchasers if they're all offering a bit less than the previous market values, and who believe that if they don't get that price, the market will come to them. The opposite of thinking that if they don't buy now at an expensive, more than the previous market price, it'll only get more expensive. Billy Shears Quote Link to comment Share on other sites More sharing options...
Samuel Whiskers Posted May 23, 2006 Share Posted May 23, 2006 Many people who had been holding off last year have crumbled at the start of this year - including some prominent posters on this site. This is the last gasp of the market, and what Fred Harrison forecast as the "Winners Curse". Those of us who are holding out are very much in the minority. We are now heading for higher IRs. I was talking to a very experienced accountant today, and he said that in his opinion, the level of "lie to buy" is massive and will make this crash very painful for many who are already up against the wall. There will be plenty of houses to go around. Quote Link to comment Share on other sites More sharing options...
North London Rent Girl Posted May 23, 2006 Share Posted May 23, 2006 A quick question: When prices do start droppping when will everyone know when to buy and surely if there are mobs of us with savings ready to purchase when the time IS right, won't this create competition, pushing prices up? I should think that most people won't be able to afford to get in after 10 or 20 percent falls and those that can have held out this long and are hardly like to go rushing into anything. Extraneous factors like ability to borrow wads of cash to one side, which they very much are not, flats round here have a long way to go before any kind of giddy euphoria will be in order. I'm getting quite comfy in my dug-out - even thinking of putting up some pictures on those sandbags! Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted May 23, 2006 Share Posted May 23, 2006 I should think that most people won't be able to afford to get in after 10 or 20 percent falls and those that can have held out this long and are hardly like to go rushing into anything. Extraneous factors like ability to borrow wads of cash to one side, which they very much are not, flats round here have a long way to go before any kind of giddy euphoria will be in order. I'm getting quite comfy in my dug-out - even thinking of putting up some pictures on those sandbags! Yeah, may as well dig in NLRG, could be some time before the troops arrive! Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted May 23, 2006 Share Posted May 23, 2006 I should think that most people won't be able to afford to get in after 10 or 20 percent falls and those that can have held out this long and are hardly like to go rushing into anything. Extraneous factors like ability to borrow wads of cash to one side, which they very much are not, flats round here have a long way to go before any kind of giddy euphoria will be in order. I'm getting quite comfy in my dug-out - even thinking of putting up some pictures on those sandbags! Unfortunately around where I live the Council have declared the space underneath the railway stairs a no-go area for homeless people. I think they are saving it to flog off to a developer, thereby crushing my dream of a dug-out of my own. Quote Link to comment Share on other sites More sharing options...
Guest Guy_Montag Posted May 23, 2006 Share Posted May 23, 2006 Right now banks don't give a toss who they lend to, knowing they will get their pennies back should the "owner" fail to keep up repayments. On the other hand if prices are falling, they will be more careful knowing that they could start lsoing money. Well that's my tuppence worth. Quote Link to comment Share on other sites More sharing options...
Johnney Posted May 23, 2006 Share Posted May 23, 2006 All that have posted to this string, The question was in brief, "As prices fall will everyone run in and storm the housing market? Therefore keeping prices buoyant". I have a small phrase - "MARKET SENTIMENT". I learnt this phrase on this forum, so I suspect all that have posted just forget it! In brief - this mean everyone runs for the hills fearing that if they enter the falling market they will loose money hand over fist. Normally market sentiment takes a little while to take hold, the housing market can't and will not ever act like the stock market, but even stocks can take a day or two for sentiment to take affect. House prices will fall, by how much – that’s up to the likes of us and everyone else wishing to by a house. So don’t expect huge falls until economic conditions are such that normal people start feeling poor (even if they already own)! Hope this helps JJ Quote Link to comment Share on other sites More sharing options...
North London Rent Girl Posted May 23, 2006 Share Posted May 23, 2006 Unfortunately around where I live the Council have declared the space underneath the railway stairs a no-go area for homeless people. I think they are saving it to flog off to a developer, thereby crushing my dream of a dug-out of my own. And another des res apartment with great transport links is added to the UK's housing stock! Quote Link to comment Share on other sites More sharing options...
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