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House prices to crash
- Thread starter Uncle C
- Start date
Correct,and I speak as somebody who was fortunate enough to pay his mortgage off before the age of 50.I regard our house as a home and not a 'cash cow'.I just want young people to be able to afford to buy a house,like many of us 'older' posters on this board did years ago!
I know the deposit is a problem,so all the more reason for prices to drop to a reasonable level of 'affordability'.
- Jul 10, 2003
- 29,020
But US, if it was your money, would you give out a 100% mortgage on a property in Brighton ? Because i know that with the market as it is at the moment, i sure as hell wouldn't.
Absolutely spot on!
Nobody should offer 100%+ mortgages. If someone isn't prepared to put some of their own money towards a property then it seems weird that they think a bank should put anything towards it.
Blue and White Tiger
Exiled to Exeter
- Jul 6, 2010
- 927
...
...and for a 100% mortgage on a small flat in Brighton, you'd need to be earning £50,000. This is why prices need to fall.
- Jul 10, 2003
- 29,020
And with the market as it is at the moment it appears that most institutions believe that the worst scenario would be a crash of 25% hence the 75% mortgages.
I believe it is this that US strongly disagrees with ?
*edit* seeing Notters reply, i believe that most people are now wanting/expecting a further fall. The only exceptions will be people who have bought with little or no deposit in the last few years and will be put into negative equity and people (like US) who rely on the market for their business.
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Uncle Spielberg
Well-known member
We want stable house prices rises in line with inflation Bozza. A House price crash now is not going to aid the fragile recovery so lets stop this self fulfilling prophecy.
Uncle Spielberg
Well-known member
I would allow 90% mortgages with reasonable rates and reasonable fees. 100% mortgages are gone forever.
I'm certainly wanting it; but not expecting it.
Uncle C
Well-known member
- Thread starter
- #33
If mortgage availability was restored overnight this would merely take us back into the bubble. The biggest problem is that houses are far too expensive relative to wages.
The housing crash was postponed due to Quantatative Easing and historically low interest rates. As night follows day it is inevitable.
House price ned to fall by about 50%.
I mean is as first time buyers house in Hangelton really worth near 300 grand? No its not. Its worth just under 100 grand. But, as people stopped moving they start to build exstentions and rooms in the roof further destroying the first time buyers market.
There are no more first time buyers. No first time buyers noone else can move. What you are left with is stagnation.
I'm not saying I want a house price crash.
What I'm saying is that as a nation we seem to have an obsession with house prices soaring. Higher house prices means higher mortgages.
What other 'cost of living expense' do we obsessively encourage to go higher and higher? I don't recall people getting quite so excited when petrol becomes ever more expensive.
Arthritic Toe
Well-known member
Well its just fine wishing that now, after the biggest house price boom in history, but how many people were wishing that 10 years ago, when it would have been achievable with the right interest rate policies and lending criteria.
No, this is a problem, but not the biggest problem by any means.
The biggest problem is that house prices are artifically high - they are way in excess of a level which is affordable to someone on the average wage. Once prices come down, then we can worry about mortgage affordability, and it stands to reason that they should fall.
The problem with them falling too significantly is that it will put a lot of people in negative equity, so perhaps the best outcome will be for house prices to remain flat in actual terms for the best part of a decade while inflation rises at a reasonable rate of 2 or 3% p.a.
Personally I don't understand why a tax isn't made on second homes. Owning a second home needs to be made an unattractive investment opportunity because it contributes nothing to the economy and has driven prices up stupidly.
It's not that bad.
There are one-bed flats available in Brighton for £100,00 - someone on £30k could get one of those on 100% mortgage. Blimey, I live in a big 4-bed house in a lovely area near an Ofsted-rated outstanding school and that's valued at £215,00 - well within the range of a couple on average earnings.
I agree that house prices are too high and it's tough for first-time buyers and there needs to be some adjustment but don't exaggerate the problems,
larus
Well-known member
Why this desire/obsession for house prices to rise faster than inflation? Most insane.
Really think about it.
Someone buys a house 40 years ago in London for £100,000. Now it's worth £1,000,000 (excluding the effects of inflation). This person is now a millionaire, for doing jack-shit. Who ends up in debt; the younger generation.
No-one with half a brain-cell can really think that asset inflation is good. If you do, then you really don't understand the basics of economics and you've been fooled into the trap of 'debt is good'.
Really do yourself a favour and learn more about the foolishness of the system as it currently works. A starting point would be http://notayesmanseconomics.wordpress.com/.
Also, read some of the posters comments on the BBC Website on the articles by Robert Peston/Stephanie Flanders. Some interesting insights into the failings of the current 'debt' culture.