The so-called 'credit crunch' & house prices falling...

[1Man&hisBMW 10]

I think its fair to say that with credit becoming harder to get it will directly affect the prices people are willing to pay for property.

 

Also, bear in mind the rising cost of living in general. For example, fuel prices directly affect most things we buy as well as the fuel put into our vehicles.

 

You can stil find the odd gem amongst properties, however you need to be realistic now as a buyer and seller. Increasingly mortgages are being refused to those on lower incomes unless they are willing to absorb higer interest rates into their monthly.

 

Ultimately, property cannot keep increasing year on year. There has to be a point where it finds an average level.

[Guest]

When I hear people saying that they are sturggling to sell or not getting what they want for their house - I think - boo hoo - at least you have property and now all you can do is cry about how much LESS profit you stand to make! No one is forcing you to sell, likewise no-one is forcing me to buy - so I wont and will definately wait for the prices to drop.

 

Its not that black and white I'm afraid.

 

In 2004 we were worried that we would never get on the housing ladder so we stretched ourselves to buy a gorgeous 2 bed city centre pad (an older silversmiths conversion) Now last year we had a baby so our circumstances have changed and we NEED to move (especially since our family might be expanding soon too;) ) we put the flat on the market before our son was born and had no interest, other than 3 viewings.

 

If we had reduced the price any further, we would have not even paid off the mortgage, let alone make any profit.

 

Luckily we've now sold out flat under a part exchange on a new home - but Cala homes are trying to sell in at a SIGNIFICANTLY reduced rate and have only had one viewing - very worrying (but not for us anymore)

 

I just wish we'd never bought this flat and just rented, we'd have rented something like this for prob £750 a month instead of paying a £1000 a month mortgage, now we'd have been in a great position as 1st time buyers with a big deposit and a fall in house prices.

[chem1st 10]

If you own a property you should do so for one reason, to put a roof over your head and that of your family. The £ value is irrelevant.

People look at property and see £, the ones that do so are the ones that will lose out, some members of my family included, and it serves them right, I've told them this but they do not listen.

Personally I want children so owning a property would be beneficial in order to pass it on, but renting a council property would be just as effective in meeting my prospective families needs as that could be passed on.

When it comes to credit/borrowing in general, I only borrow what I can pay back or what I know I do not need to pay back. I know many people whom borrow without the intention of paying back and that is the problem, not for the borrowers, but the lenders.

The lenders will suffer, and in turn the people whom see property as £ and not a roof over their heads.

[Baz1 29]

I think this is a sign of the truth= overlending and capitalism showing failure. The charging of interest has created a nation of debt- some of the headlines over the last few months like:

 

In the UK, the Bank of England increases aid to Northern Rock bank to keep it afloat (initially £22 billion, now £57 billion)

 

European Central Bank injects $500 billion at lower rates to banks!

 

Various banks around the world doing the same:

http://news.bbc.co.uk/1/hi/magazine/7148494.stm

 

It reminds me of the phrase "chickens coming home to roost".

[handypandy 14]

At any one given time in the general scheme of things, house buyers will pay roughly the same, whether by the asking price of the property or the interest charged. Demand, generally will always outstrip supply. Banks basically control house values, as they still own most of them its in their interests to do so. While money is cheap to borrow on the world market, they lower the interest rate and the prices go up (securing their investment) when the prices peak( determined by average incomes) and subsequently begin to fall then the bank raises the interest rate to ensure their investment is still paying dividends. Thats why there is never a 'good' time to buy, for Joe Public its always the same. You buy in the buyers market and pay a higher interest rate or buy in the sellers market and pay a higher asking price. Either way the banks make money and Joe Public hopefully maintains the status quo.

[Quagmire 10]

At any one given time in the general scheme of things, house buyers will pay roughly the same, whether by the asking price of the property or the interest charged. Demand, generally will always outstrip supply. Banks basically control house values, as they still own most of them its in their interests to do so. While money is cheap to borrow on the world market, they lower the interest rate and the prices go up (securing their investment) when the prices peak( determined by average incomes) and subsequently begin to fall then the bank raises the interest rate to ensure their investment is still paying dividends. Thats why there is never a 'good' time to buy, for Joe Public its always the same. You buy in the buyers market and pay a higher interest rate or buy in the sellers market and pay a higher asking price. Either way the banks make money and Joe Public hopefully maintains the status quo.

 

Nonsense.

 

Anyone smart enough to see the ups and downs in the housing market can save an awful lot of money. You have to time it right. Save a big deposit in the housing "boom" years, and unleash it during the crash.

 

If this wasn't the case, how have so many BTL'ers made so much equity in the last 5 years.

 

The problem is, Joe Public is dumb, he watches the property porn on TV, and goes with the flow, landing himself with a crippling mortgage.

 

An investor sells to the optimist and buys from the pessimist.

 

And I just have to say it, now is the most awful possible time to buy, higher interest and stupid property prices. So claiming its always the same for "Joe Public" is completely ridiculous.

 

You are either:

 

* An estate agent.

* A mortgage broker.

* A BTL leveraged up to your ears.

* Shackled with a crippling mortgage and just hoping a housing crash wont happen.

 

No doubt.

[handypandy 14]

Nonsense.

 

Anyone smart enough to see the ups and downs in the housing market can save an awful lot of money. You have to time it right. Save a big deposit in the housing "boom" years, and unleash it during the crash.

 

If this wasn't the case, how have so many BTL'ers made so much equity in the last 5 years.

 

The problem is, Joe Public is dumb, he watches the property porn on TV, and goes with the flow, landing himself with a crippling mortgage.

 

An investor sells to the optimist and buys from the pessimist.

 

And I just have to say it, now is the most awful possible time to buy, higher interest and stupid property prices. So claiming its always the same for "Joe Public" is completely ridiculous.

 

You are either:

 

* An estate agent.

* A mortgage broker.

* A BTL leveraged up to your ears.

* Shackled with a crippling mortgage and just hoping a housing crash wont happen.

 

No doubt.

 

None of the above. Apart from very welcome private customers, I do carry out building and refurbishment projects for very wealthy btl landlords, developers etc. Yes they have done very well thank you. But Joe Public they aint, which was precisely my point. As its his home and probably his only property, Joe Public is always in the same market, he needs somewhere to live. If he sells during the boom he mostly has to buy during the boom. If he buys during the crash he mostly has to sell during the crash. This my friend doesn't make him 'dumb' it makes him Joe Public.

[handypandy 14]

Having loads of cheap 1 and 2 beds on the market pulls the whole market down.

 

Anyone in the first-time-buyer market right now is frankly a mug. They will find themselves in negative equity within a year.

 

Why not wait a year and save tens of thousands of pounds? Prices have fallen 1.5% in the past three months. Thats a couple of grand saved already!

 

And during your three months you have paid about the same in rent on a similar property....... whats your point?

[nightrider 13]

And during your three months you have paid about the same in rent on a similar property....... whats your point?

 

if you buy a house with say a 5% deposit the interest you pay is similar to the rent you pay or perhaps less. In this scenario *if* house prices are falling it makes no financial benefit to buy at all until you have a large enough deposit so that rent is more than the interest you would pay on a mortgage each month. Once that happens some of the rent you pay would be giong towards the purchase of the house so it gives some benefit to buy (though not neccessarily if prices were in meltdown, which they are not at the moment).