Will UK property prices crash in the next 1-2 years and do you want this to happen? Watch

ByEeek
Badges: 19
Rep:
?
#21
Report 1 month ago
#21
(Original post by Arran90)
, so FTB are competing with landlords for houses in these areas to a degree far greater than back in the 1970s and 80s.
True. But landlords tend to want cut price because they need to make a profit. Ftb prepared to pay market rate can always outbid a cash buyer. We sold our first house for £118k. We had an offer from a cash buyer for £107k. No chance.
0
reply
paul514
Badges: 21
Rep:
?
#22
Report 1 month ago
#22
There is zero chance of a property crash whilst demand is so high and supply to low.

Yes if the banks all failed then it would go down but it would just mean people weren’t selling or buying until it was over in reality.
Posted on the TSR App. Download from Apple or Google Play
0
reply
paul514
Badges: 21
Rep:
?
#23
Report 1 month ago
#23
(Original post by lionelmessi123)
Question, BTW i'm new to The student room and this is my first chat-typical lol. Anyway i live in the southfields wimbledon area and am moving to surrey soon my house here will be going on rent, if we sell it in a few years time and Britain's out of the EU will it be sold on a very cheap price?
No it won’t make a blind bit of difference
Posted on the TSR App. Download from Apple or Google Play
0
reply
harrysbar
Badges: 18
Rep:
?
#24
Report 1 month ago
#24
I can't see property prices crashing - they may suffer a temporary fall and at the moment they are pretty much stagnant in my area, but in the long run, house prices always seem to rise. I bought my first property in the 90's with my husband - the mortgage was 3 times our joint salary which seemed tough at the time but I believe is nothing by today's standards. Since then we have bought and sold various properties, at certain times we have lost a bit of money on them, at other times we have made good amounts of profit. Over that 25 year period, prices have never crashed, only staggered about for a year or two sometimes before picking themselves back up again.

People in other countries may laugh about our huge mortgages and the banks owning the property not us, but we do own them in the end and I believe that property remains one of the best investments you can make.
0
reply
Burton Bridge
Badges: 12
Rep:
?
#25
Report 1 month ago
#25
(Original post by ByEeek)
True. But landlords tend to want cut price because they need to make a profit. Ftb prepared to pay market rate can always outbid a cash buyer. We sold our first house for £118k. We had an offer from a cash buyer for £107k. No chance.
You're always going to get investment buyers making silly offers, trying to pray on the people who are desperate for a quick sale. However fir the right property.

I don't mind paying market value one bit. Property investment is a risk, like any investment at the moment I'm nervous about investing anymore in UK property because of brexit uncertainty. Lets not forget the real money is made on property is made or lost in appreciation or depreciation.

Negative equity is not the way forward in the buy to let industry.
0
reply
Burton Bridge
Badges: 12
Rep:
?
#26
Report 1 month ago
#26
To the OP, It depends what happens politically.

If you get my ideal socialist politics (unlikely) then house prices will fall because I would replace all council houses. However that's unlikely to happen.

And do I want it to happen, well in my head no because I will lose a lot of money, in my heart yes because its the best thing for the country and young.
Last edited by Burton Bridge; 1 month ago
0
reply
UrBusted
Badges: 12
Rep:
?
#27
Report 1 month ago
#27
(Original post by illegaltobepoor)
The only new homes which have been built are those for people who can afford a mortgage. The need for social housing has increased year on year and the banks love it because renters have had to borrow more to keep a roof over their head. Mean while mortgage rates have remained low and mortgage holders have been sheltered from these increases.

Let me put it this way, my house has increased in value from £60,000 in 2014 to £100,000 in 2019. In my area rents have increased from £350 to £530 for a 3 bed semi. 13% rise in house prices per year and 10% rise in rents per year.

I can't see any neo-liberal Government building social housing because it will burst the property bubble. There isn't much chance of Corbyn getting in. All Brexiteers are moving towards the Brexit party and Remainers are divided amongst Labour, the Greens and the Liberal Democrats. Tories on the other hand are finished woo hoo!

I also don't think the housing market will crash. Instead it will slowly stagnate. Depends on how long the down term is. Demand isn't going to suddenly decrease in the snap of a instance from Brexit or a House building program. If this was the case the Russians would be moving their money out the country.

If the trend continues in 10 years time most families will be living in bedrooms because they wont even be able to afford a flat. A 3 bedroom house will be shared and have 3 families living in it.

Mean while mortgage holders will be millionaires.
Same, my house increased in value by 40% since 2014, and is now over 400% of the original cost from 2000, partly to do with an extension. People are already struggling to live here with financed lifestyles, a lot of people will have to end up moving out if prices continue increasing like that
0
reply
Arran90
Badges: 20
Rep:
?
#28
Report 1 month ago
#28
(Original post by ByEeek)
True. But landlords tend to want cut price because they need to make a profit. Ftb prepared to pay market rate can always outbid a cash buyer. We sold our first house for £118k. We had an offer from a cash buyer for £107k. No chance.
Not all landlords are cash buyers. Have you heard of BTL mortgages? The majority of rental properties have a mortgage on them.

Not all private buyers have mortgages. Some are cash buyers.
2
reply
ByEeek
Badges: 19
Rep:
?
#29
Report 1 month ago
#29
(Original post by Arran90)
Not all landlords are cash buyers. Have you heard of BTL mortgages? The majority of rental properties have a mortgage on them.

Not all private buyers have mortgages. Some are cash buyers.
Of course. But as a private buyer you can always outbid the btl landlord because they have to leave a margin for profit. Which is why privatisation rarely saves money!
Last edited by ByEeek; 1 month ago
0
reply
Fullofsurprises
Badges: 20
Rep:
?
#30
Report 1 month ago
#30
There is some chance of a serious crash now. Actually London has already been suffering a sharp reverse in property prices at the higher end and that effect is bound to spread. When Brexit really bites in 1-3 year's time, depending on the nature of the leave (a hard Brexit is looking increasingly plausible), unemployment will surge and the number of buyers will plunge, particularly in the North and Midlands, but also in the SE and SW regions. If the Bank of England are forced to raise rates due to runs on the pound, a likely outcome, then we will also see very large numbers of repossessions, since many mortgage holders are only just hanging on even now with low rates, due to stagnant or declining real wages since 2008. A big spike in repos will also add to a price plunge. In addition, many EU workers who were previously demanding housing here will be quitting the UK.

Adding these things together, a price plunge of something like 1/3 is not unlikely, probably in 2020/21.
0
reply
Burton Bridge
Badges: 12
Rep:
?
#31
Report 1 month ago
#31
(Original post by Fullofsurprises)
There is some chance of a serious crash now. Actually London has already been suffering a sharp reverse in property prices at the higher end and that effect is bound to spread. When Brexit really bites in 1-3 year's time, depending on the nature of the leave (a hard Brexit is looking increasingly plausible), unemployment will surge and the number of buyers will plunge, particularly in the North and Midlands, but also in the SE and SW regions. If the Bank of England are forced to raise rates due to runs on the pound, a likely outcome, then we will also see very large numbers of repossessions, since many mortgage holders are only just hanging on even now with low rates, due to stagnant or declining real wages since 2008. A big spike in repos will also add to a price plunge. In addition, many EU workers who were previously demanding housing here will be quitting the UK.

Adding these things together, a price plunge of something like 1/3 is not unlikely, probably in 2020/21.
Screenshot taken, apart from a hard (true) brexit I don't think virtually none of it will happen. Watch out for me starting a thread in Jan 2021, it will be entitled 'I told you so'
1
reply
ajj2000
Badges: 18
Rep:
?
#32
Report 1 month ago
#32
(Original post by ByEeek)
I don't think that is true. Back in the 70s getting a mortgage was pretty hard and only one person's salary was taken into account. Rich people still lived in big houses and those struggling had to compromise. People in the 80s and 90s were shafted by high interest rates and frequent crashes. People in the 90s / 00s were shafted by endowment mortgages.

What has changed is that the number of people who aspire to live in desirable areas has risen and unsurprisingly, many can't afford to buy what they want and are equally unprepared to compromise by buying in less desirable / cheaper areas.
The multiples are about right but as you say the interest rates were high. However so was inflation and payrises. After 5 years of 10% payrises the mortgages were very cheap.
0
reply
Fullofsurprises
Badges: 20
Rep:
?
#33
Report 1 month ago
#33
(Original post by Burton Bridge)
Screenshot taken, apart from a hard (true) brexit I don't think virtually none of it will happen. Watch out for me starting a thread in Jan 2021, it will be entitled 'I told you so'
Let's hope we still have a working and free internet then. I don't doubt for a second that our charming Tory masters will cancel the internet if things get bad enough - there must be no alternative news that is not the Daily Mail.
0
reply
Burton Bridge
Badges: 12
Rep:
?
#34
Report 1 month ago
#34
(Original post by Fullofsurprises)
Let's hope we still have a working and free internet then. I don't doubt for a second that our charming Tory masters will cancel the internet if things get bad enough - there must be no alternative news that is not the Daily Mail.


One thing we might agree on, nothing good ever comes from voting Tory!

Time will tell, I'll lose a lot of money if you are correct, so it's fair comment I have my money where my mouth is
0
reply
L i b
Badges: 19
Rep:
?
#35
Report 1 month ago
#35
(Original post by fallen_acorns)
Your average couple back in the 70s, would have borrowed 2-3x their yearly salary, and paid it back in 15-20 years at most.
Yes, but you were also looking in the 1970s at an interest rate that was incredible by today's standards. The base rate peaked at 17% in 1979. Now we've had a decade where it's been less than 1%. That's an incredibly good position for a buyer to be in, given the level of equity you're paying down versus paying huge sums in interest - even with a small house price.
0
reply
paul514
Badges: 21
Rep:
?
#36
Report 1 month ago
#36
Of course you have your money where your mouth is, its impossible for him to be right
(Original post by Burton Bridge)


One thing we might agree on, nothing good ever comes from voting Tory!

Time will tell, I'll lose a lot of money if you are correct, so it's fair comment I have my money where my mouth is
0
reply
paul514
Badges: 21
Rep:
?
#37
Report 1 month ago
#37
Mate just LOL

Please print this out with the date and look upon it every new years for like the next decade....
(Original post by Fullofsurprises)
There is some chance of a serious crash now. Actually London has already been suffering a sharp reverse in property prices at the higher end and that effect is bound to spread. When Brexit really bites in 1-3 year's time, depending on the nature of the leave (a hard Brexit is looking increasingly plausible), unemployment will surge and the number of buyers will plunge, particularly in the North and Midlands, but also in the SE and SW regions. If the Bank of England are forced to raise rates due to runs on the pound, a likely outcome, then we will also see very large numbers of repossessions, since many mortgage holders are only just hanging on even now with low rates, due to stagnant or declining real wages since 2008. A big spike in repos will also add to a price plunge. In addition, many EU workers who were previously demanding housing here will be quitting the UK.

Adding these things together, a price plunge of something like 1/3 is not unlikely, probably in 2020/21.
0
reply
Burton Bridge
Badges: 12
Rep:
?
#38
Report 1 month ago
#38
(Original post by paul514)
Of course you have your money where your mouth is, its impossible for him to be right
I didn't lose much sleep last night, let's put it that way
0
reply
Arran90
Badges: 20
Rep:
?
#39
Report 1 month ago
#39
(Original post by ByEeek)
Of course. But as a private buyer you can always outbid the btl landlord because they have to leave a margin for profit. Which is why privatisation rarely saves money!
It doesn't work like this. A private buyer is constrained on what they can afford by their salary. A landlord using a BTL mortgage is not constrained in this way because, as long as they can put down the deposit, the mortgage cost is paid using the tenant's rent.

As a general rule of thumb the cost of renting a property is higher than a what a private buyer would pay for a mortgage on the same property, unless the rent is 'discounted' by there being no or only a small mortgage on it.

Between 2000 and 2010 BTL investors, and not private buyers, were driving the housing market as they had the upper hand when it came to buying houses.
0
reply
X

Quick Reply

Attached files
Write a reply...
Reply
new posts
Latest
My Feed

See more of what you like on
The Student Room

You can personalise what you see on TSR. Tell us a little about yourself to get started.

Personalise

Are cats selfish

Yes (144)
61.28%
No (91)
38.72%

Watched Threads

View All