One for Rave

[schmunk]

I can remember the last housing crash at the end of the 1980's - the properties that lost most money weren't the expensive, top end properties but the one bed maisonettes and small flats -

Which would make sense, as the properties which have gained the most in the last few years are those towards the bottom end, and particularly in cheaper areas.

[TheAnimus]

I can remember the last housing crash at the end of the 1980's - the properties that lost most money weren't the expensive, top end properties but the one bed maisonettes and small flats -

Also there was a small change in the higher end, this is currently been felt a little in london, if you want a large family house in dulwich (which marreid city workers seam to love) the flow of people moving in/out has of course dried up of late. I'd be tempted to say there may well be a fall in the higher end, not by much thou.

The biggest loosers in a fall will of course be those at the bottom of the ladder, who will fall off completely. Ask yourself this, if all the flats/houses on the street where the same price, would anyone want mine? if your in the lower 30% of what you'd choose to live in on that street, then you'll be burnt by any fall.

[Lee H]

Where are you looking round bolton for that?

I'm not looking round Bolton - more round the Walkden, Worsley, Swinton area where I live now

[chicken]

And the people who have bought houses as buy to let landlords are finding that the rents will not cover the mortgage.

I find it odd that people seem to expect it to. At the end of the day you're buying a 2nd, 3rd, 4th, etc, property. It's an investment, a multi-thousand pound item that you OWN at the end of the mortgage. No one should be expecting to never have to pay anything for it!

[nimbu]

Well that "calculator" should be taken with a a small mountain of salt.

We run a small mortgage brokerage and on the side between my parents and I we have a small portfolio of properties. From our customers and our own point of view there is still confidence in the housing market.

Here is the way I see it.

If interest rates continue to rise, there could be a dip in the housing prices, however investors with capital and sufficient equity accross their portfolio will still purchase property further pushing people off the housing ladder.

Its the people that got onto the buy to let market later on that used equity release schemes to increase their portfolios that will suffer or those that lacked the forsight to plan for such dips. Property is a very long term investment, in some cases its not the current generation that will benefit.

I understand the situation that a lot of potential first time buyers are in, and the Government should really do something about it. What I think they need to do it.

1) More developement with schemes aimed at helping first time buyers.

2) Taxation, there are so many buy to let investors that have no clue that they need to pay on the income they get. The Government has the means to find out how many properties any one person owns, and they should use this to enforce the taxation that is due. (When you pay your stamp duty you have to provide your NI number) Also the amount of relief you receive, currently lets say your buy to let mortgage is £500 and your rent is £800, you pay tax on the difference. (very simply put as there are other allowances that come into play too). This needs to change.

[greenalien]

I've always reckoned that when you buy a property, the real value is in the land, not in the building. That's why flats and maisonnettes - which already seem to be in over-supply in many areas - are the first to lose value if the market slows down. Leasehold? No thanks!

[userdefinable]

What a load of rubish that calculator is. There's a growing population in most areas and it doesn't account for inflation. It's just naive scaremongering in my opinion

[userdefinable]

Flats are just a modern soulation to overpopulation. As long as it's a 2 bed and the rooms are of a good size, they have many advantages. There easier to sell for a start. Also a lot of people are eligable to buy the shared freehold. Ths price may well be in the land, but thats why we take buildings insurance

[Rave]

It's not really a great calculator TBH- its only use is to show you how much average prices have increased in your area in a given timeframe.

You've got to factor in inflation. If in a given year, the value of a house stays the same in nominal terms, then it has actually fallen in real value by the same amount that the value of the currency has fallen through inflation.

It's a great time to be a property bear though- barely a day goes by when I don't see a story to warm the cockles of my heart. I'm rubbing my hands with glee at the thought of the carnage that's going to start next year.

[schmunk]

I'm rubbing my hands with glee at the thought of the carnage that's going to start next year.

Now now, Rave, keep both hands on the wheel.

[Sinizter]

Rave's got it easy with the prediction. A house price crash at *some* point in the future as all markets are cyclical.

He should give a precise date range when this fabled crash is supposed to happen. And I dont mean a range covering the next 3+ years.

[Rave]

It's starting now, and will be in full flow by next year. Precise enough for you?

[0iD]

America's now feeling it, only a matter of time before we do.

It's insane, purchased my current house for 52k in 2000, now they're selling for 180k. Now despite the 'ooo look at all that equity' factor, something's just got to give for first time buyers & poeple who want to stay in the village/town/city they've always lived in. The average house should be within everyone's reach @ 3 to 4 times income.

[Sinizter]

It's starting now, and will be in full flow by next year. Precise enough for you?

Yes. The first time I have heard you be precise about this fabled "crash" - sorry if I missed a thread or a post.

Now lets sit back and watch what happens. If a crash happens, it just means I will be able to afford a better house.

[Sinizter]

The average house should be within everyone's reach @ 3 to 4 times income.

Not if there is a shortage - simple supply and demand.

[0iD]

Well imo the deamnd is being fuelled by the banks making people think they can afford mortgages with silly terms. IF the economy takes a nose dive then it'll be a repeat of the repossesion frenzy we had last time & which America is currently experiencing.

If renting here was easier & fairer, such as it is in some europen countries, Germany being a good example, perhaps we wouldn't be quite so obsessed with home owning.

Soon food prices will start to go up. Meat supplies will be down owing to disease in the uk, so more imports. The imports won't be so cheap any more owing to an exponentially gowing world population. Same goes for food crops, poor growing conditions worldwide & now the increasing demand for bio fuel will see a shortage in supply. There have already been protest in Mexico over the price of bread as the US has curtailed many expots to cope with high home market demand & low production. People can't afford to eat because if extortionate prices, supply & demand in action.

All of which reduces everyones free income, reducing the amount they can afford for housing etc. It all has a knock-on effect. Household bills are on average going up more than the average persons wage. The "I'm alright jack, sod the rest" attitude of some will be the downfall of many.