It's not fine at the moment, it's massivley overpriced.
The latest figures on cash purchases show this. Something like 60% of new homes are unmortgaged. That means another crash is coming.
(PsychoChomp, Tue 17 May 2011, 12:47, 1 reply, 15 years ago)

Banks are willing to lend, and prices are forecast to continue their trend downwards until 2015

( Light In Chains maker of the ikea sofa, Tue 17 May 2011, 12:51, Reply)

Banks are willing to lend to people with large savings.
Given that this crash happened to a generation that was used to lots of readily available credit, you'll find there aren't actually all that many people on average incomes with tens of thousands of pounds in the bank.
( Kroney, Tue 17 May 2011, 12:52, Reply)

If by the average age of 38 as first purchase, if you haven't mustered 20k as a deposit you should shoot yourself

( Light In Chains maker of the ikea sofa, Tue 17 May 2011, 12:55, Reply)

This crash was caused for precisely this reason.
lots and lots of credit debt, no savings to pay it off.
( Kroney, Tue 17 May 2011, 12:56, Reply)

The kids should be saving then
Also far more individuals are after their own homes see Broken Briton marriage breakdowns and breakdown of the family life in general
( Light In Chains maker of the ikea sofa, Tue 17 May 2011, 12:58, Reply)

They are with large deposits,
large deposits require the sort of disposable income that inflation is eating into.
Hopefully there'll be a massive crash soon while I'm still renting.
(PsychoChomp, Tue 17 May 2011, 12:54, Reply)

Highly doubtful, see housing shortage in South East

( Light In Chains maker of the ikea sofa, Tue 17 May 2011, 12:55, Reply)

My parents trot out this reasoning each time the subject comes up.
Prices of houses have only an incidental relationship to how many houses are on the market.

House prices oscillate due to the amount of money available to buyers, which then has a knock-on effect to availability, not the other way around.
( Kroney, Tue 17 May 2011, 12:58, Reply)

Your parents are right and you should shut your face

( Light In Chains maker of the ikea sofa, Tue 17 May 2011, 13:00, Reply)

This time next year, old boy.
Same place, bring some apologies.
( Kroney, Tue 17 May 2011, 13:01, Reply)

I've heard the same for the past ten years, the South East will always do alright
*trigger finger*
( Light In Chains maker of the ikea sofa, Tue 17 May 2011, 13:04, Reply)

Not in a general housing market crash it won't be.

( Kroney, Tue 17 May 2011, 13:05, Reply)

True, but there's already been a significant correction, and during the crash of the 90's I don't remember them giving houses away in London, not that the first time buyer could have afforded the interest rates of he time

( Light In Chains maker of the ikea sofa, Tue 17 May 2011, 13:10, Reply)

The nineties was a slightly different scenario
My parents bought a house in 1983 for around 20k. Before the credit crunch it was worth 250k. In those last twenty years, there wasn't suddenly ten times more people wanting to buy that house. What happened was steady devaluation of the pound, which led to more money being available in loans, which led to house prices going up.

Then the whole buy to let thing took off and pushed the relative value up higher. There are several reasons why buy to let is going to fail and three of them are lack of credit, increasing interest rates and Capital Gains Tax.

The lack of credit is going to drive the drop in relative house prices, the South East isn't immune to that. As interest rate rise, as they will have to if they're going to stop inflation more and more people are going to be in the same position as they were three years ago, only this time there won't be the available bail-out money because interest is already at rock bottom.

The only way house prices aren't going to fall is if they allow inflation to occur.
( Kroney, Tue 17 May 2011, 13:16, Reply)

House prices across the rest of the UK have been falling
London is it's own special micro climate, because the people that work in the city earn stupid money and so can afford stupid prices for shitty little flats just so they are close to a tube line.
(Bazongaloid, Tue 17 May 2011, 13:26, Reply)

there will always be some areas which are less affected
central london is one of those. eg my flat is still worth about £150k more than i paid for it about 5 years ago - this is partly because we got a good deal at the time, but mostly because of the location and type of block, meaning that there are a lot of foreign investors/purchasers/governments wanting to buy them. whereas my grandma's house, up in halifax, dropped from about £110k to £80k over the same period.
( rachelswipe with a fork, Tue 17 May 2011, 13:22, Reply)