How many people would welcome a significant house price "correction" over the next 2 years?

Question

House prices now are reaching ridiculous levels and if things carry on they way they are by 2024 the average house price will be 1 million pounds, to add to this China is growing at a staggering rate and Britain will be on the decline over the next few decades. Something has got to give, our houses aren't worth that much money.

Answer 1

Are you not even in America??? Get over yourself!!! Put down our government and then start talking about house prices in the UK??? I am sickened that someone who has nothing to do with MY government would criticize it so. We aren't the ones who still live with a monarchy who has to sign off on everything. Remember the Revolutionary War? We kicked your butts! And we were outnumbered 10 to 1. All to be a true democracy.

Answer 2

Yes, it is well overdue. Historically low interest rates, naive and fearless young borrowers, seemingly endless amounts of FOREIGN money that the banks have available to lend, banks lending 5 times annual salaries (sometimes more), loans of up to 125% of the value of the property, interest only loans etc, buy to let market, houses now seen as investments rather than places to live. All this against ten years of fairly muted inflation, except, of course, houses themselves and tax increases.

Blowing up house prices does not add any economic wealth to the country. They are still the same houses as before and they are not productive assets. Initially, rising prices represent a paper profit for house owners. But, the longer they stay high, causes new buyers to borrow real money to keep the ball rolling. The longer this goes on, the more borrowers become trapped with large debts. This phenomena has also occurred in the USA, Australia and spain etc. Existing house owners have also extended their mortgages to fund consumable expenditure, in addition to increasing credit card debts. The US government debt is also way off the radar screen, and Britain is following. Governments have pursued a low interest rate policy (manipulated inflation measure) and failed to control the banks high multiple lending policies. This was all intended, of course, to make the economy look good. With high government expenditure on the public sector, both the US and Britain are in a serious financial mess. And it is a mess of their own making.

Now, because of this, from the government down, there is a desperate attempt to talk house prices up. Any sign of serious falls, and the Bank of England would fall over itself to lower interest rates, no matter what else was going on in the economy. It is that serious. Some time ago the British housing stock was thought to be worth 3.7trillion pounds. The sums are enormous, meaning that we now have an economy predicated on house prices. These rises come on the back of huge rises during the 1986-1990 period. It has to be remembered that the money being loaned is not from British savers, but from foreign savers. It is a balloon that must burst. Nothing about this government is built on solid ground.

Answer 3

I agree. .. something as got to give. Yes, people that already bought will be in a bad position, but it can't be a win-win situation. The amount of money these houses are 'worth' are rediculious. . .and they're certainly not worth it. It's just staggering. . .

Answer 4

House prices are stupid and are contributing to homelessness in this country,along with the lack of affordable council and social housing and ridiculously high private rents.

Answer 5

since you say pounds...I'm assuming your British, but America is going through the same problems...

the only problem is... those people that just bought a house... if the market corrects... all of a sudden they just payed way to much for it... and they won't be happy with that...

Answer 6

Very much. Houses in the UK are greatly overpriced.

Answer 7

My bet is everyone would welcome it except for people who currently own and especially are going to be selling their homes.