House Crash

brian pearson · 18-10-2007, 10:28 AM

I have long thought that a house price crash inevitable. Not a bottoming out of the market or a price rise slowdown, but a nasty 30% reduction in prices and the neg equity causing many to drop the keys off at the bank. The economy which many believe is credit based will shrivel and the whole house of cards will start to fall.

Then again I thought this last year and still prices continue to rise. Just get a strange feeling though that troubled times are round the corner. No houses where I live are selling, and new home builders are starting to dish out incentives. Just watch, this time next year prices will be up 15% and I will be proven wrong again.

John Carter · 18-10-2007, 10:36 AM

Don't count on a fall. Supply and demand is driving the prices, and in case anyone hasn't noticed we're a small island with limited land supply and unlimited numbers of buyers entering the country each year.

harryaldridge · 18-10-2007, 11:27 AM

Yep. I think a fall is unlikely. I think price stagnation is more likely with rises of perhaps a few %, but not a fall, and not a crash.

eublues · 18-10-2007, 02:03 PM

I went to an auction this week and a plot for a single detached house sold for £455,000!

brian pearson · 18-10-2007, 02:14 PM

What about if house prices remained as they are but the market just stagnated ? People will be reluctant to sell for less than they paid if they have bought in the last few years because that will leave them with neg equitity. So they stay put and convince themselves their house is worth what they paid. Meanwhile the billions pumped into the economy from stamp duty, re-mortgages and new furnishing etc will slow.

Then when the economy starts to slip and mortgages go unpaid the glut of reposessed houses will bring prices down. Or, this time next year I will still be predicting another housing crash !

Mikeuk · 18-10-2007, 06:20 PM

Quote:

Originally Posted by brian pearson

I have long thought that a house price crash inevitable. Not a bottoming out of the market or a price rise slowdown, but a nasty 30% reduction in prices and the neg equity causing many to drop the keys off at the bank. The economy which many believe is credit based will shrivel and the whole house of cards will start to fall.

Then again I thought this last year and still prices continue to rise. Just get a strange feeling though that troubled times are round the corner. No houses where I live are selling, and new home builders are starting to dish out incentives. Just watch, this time next year prices will be up 15% and I will be proven wrong again.

I think it's extremely unlikely. I've been in the business for 37 years and I've only seen it happen once - around 1989 when there were sky-high interest rates and extensive unemployment.

The market is very quiet at the moment - partly because of scare stories - but it will pick up.

g hall · 22-10-2007, 06:19 PM

Quote:

Originally Posted by Mikeuk

I think it's extremely unlikely. I've been in the business for 37 years and I've only seen it happen once - around 1989 when there were sky-high interest rates and extensive unemployment.

The market is very quiet at the moment - partly because of scare stories - but it will pick up.

Wasn't this when Lawson changed the mortgage relief to being based on the property whereas before 2 or more non related people could each get mortgage relief which caused a mini bubble which then burst quite spectacularly

brian pearson · 22-10-2007, 10:30 PM

http://www.telegraph.co.uk/money/mai...nuksham122.xml

And when it all starts to grind to a halt house prices will imo crash. Try bursting a bubble slowly.

Link is supposed to be about the German view of our economic miracle but my IT skills arent up to it !

Anthony Butcher · 23-10-2007, 03:29 PM

You are not alone: House price news, information and discussion - HousePriceCrash.co.uk

Mikeuk · 25-10-2007, 07:35 PM

Quote:

Originally Posted by g hall

Wasn't this when Lawson changed the mortgage relief to being based on the property whereas before 2 or more non related people could each get mortgage relief which caused a mini bubble which then burst quite spectacularly

That was one of the catalysts. Added to which we had high unemployment, phenomenally high interest rates and of course the stockmarket crash.

High unemployment and high interest rates led to a very high rate of repossessions which flooded the market. Repossessions are significantly higher than a year ago but there is no way that market conditions resemble those of 1989.

A quiet market for months with prices flatlining is the obvious scenario.

18-10-2007, 10:28 AM	#1 (permalink)
brian pearson Senior Member Join Date: Dec 2005 Location: nottinghanshire Posts: 758	House Crash I have long thought that a house price crash inevitable. Not a bottoming out of the market or a price rise slowdown, but a nasty 30% reduction in prices and the neg equity causing many to drop the keys off at the bank. The economy which many believe is credit based will shrivel and the whole house of cards will start to fall. Then again I thought this last year and still prices continue to rise. Just get a strange feeling though that troubled times are round the corner. No houses where I live are selling, and new home builders are starting to dish out incentives. Just watch, this time next year prices will be up 15% and I will be proven wrong again.

18-10-2007, 11:27 AM	#3 (permalink)
harryaldridge Senior Member Join Date: Oct 2005 Location: West Sussex Posts: 1,912	Yep. I think a fall is unlikely. I think price stagnation is more likely with rises of perhaps a few %, but not a fall, and not a crash. __________________ http://vindicovindico.blogspot.com

22-10-2007, 10:30 PM	#8 (permalink)
brian pearson Senior Member Join Date: Dec 2005 Location: nottinghanshire Posts: 758	http://www.telegraph.co.uk/money/mai...nuksham122.xml And when it all starts to grind to a halt house prices will imo crash. Try bursting a bubble slowly. Link is supposed to be about the German view of our economic miracle but my IT skills arent up to it ! Last edited by brian pearson; 22-10-2007 at 10:34 PM.

23-10-2007, 03:29 PM	#9 (permalink)
Anthony Butcher Administrator Join Date: Sep 2004 Location: Long Ashton, Bristol Posts: 10,205 Party: None	You are not alone: House price news, information and discussion - HousePriceCrash.co.uk __________________ If you care about what's in your food and where it comes from, then get it labelled! Label My Food - http://www.labelmyfood.org.uk

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

18-10-2007, 10:36 AM	#2 (permalink)
John Carter Uber Member Join Date: Mar 2005 Location: On Sabbatical Posts: 5,110	Don't count on a fall. Supply and demand is driving the prices, and in case anyone hasn't noticed we're a small island with limited land supply and unlimited numbers of buyers entering the country each year.

18-10-2007, 02:03 PM	#4 (permalink)
eublues Uber Member Join Date: Nov 2004 Posts: 3,128	I went to an auction this week and a plot for a single detached house sold for £455,000!

18-10-2007, 02:14 PM	#5 (permalink)
brian pearson Senior Member Join Date: Dec 2005 Location: nottinghanshire Posts: 758	What about if house prices remained as they are but the market just stagnated ? People will be reluctant to sell for less than they paid if they have bought in the last few years because that will leave them with neg equitity. So they stay put and convince themselves their house is worth what they paid. Meanwhile the billions pumped into the economy from stamp duty, re-mortgages and new furnishing etc will slow. Then when the economy starts to slip and mortgages go unpaid the glut of reposessed houses will bring prices down. Or, this time next year I will still be predicting another housing crash !