Are House Prices Beginning to Collapse?

Question

http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=504398&in_page_id=1770

Answer 1

Apparently so.
I hope so anyway, I am fed up of renting and helping the landlord pay off his mortgage!

Answer 2

I am buying in 4 months time. I think it depends like anything where you buy and what price. Scottish Widows valued the flat i am buying at £285k 5 months ago. I am buying direct off my landlord and I am getting the place for £237k. It is a 2 bed flat in Zone 2 in South London. I think that I could realistically sell if I redecorated (painted and new carpets) for around £265-270 today as others on the development are still being listed by some estate agents at £300k. But these generally end up going for a lot less. I think there will be a slight fall during the first few months of '08 but if the bank of england lowers interest rates below 5% again as many predict they will by the end of next year, then I think that will drive the market forward again although not anything like previous years. i don't expect to make massive gains on my investment although i think that over the next 3 years it is reasonable to expect property to increase by between 7-10%. I think that the economy is still strong, the FTSE is well above 6,000 points which is great and I think as long and unemployment is still low, so people are earning. I think the sort of people who have mortgages are on balance fairly aware of their own financial situation and won't have exposed themselves to too much heavily secured debt.

There is no doubt the money has been made in the property market at that moment, but these things always run in cycles and in 10 years there will be another big rise. It always seems to be people who rent (like i currently do) that hope for the worst prediction but it is just so they can buy somewhere cheap themselves, but I don't think even if there is a crash, property will drop below 10% and that will be recovered after a couple of years as the low prices will drive the demand again. But a lot seems to change within a month at the moment.

BTW: I think Shambo is a bit out of order getting personal and calling people idiots for investing. You can't possibly argue that it is better to rent long-term.

Answer 3

I hope not: I bought this year! I dont mind it slowing down by all means.

I remain confident that house prices will not fall over time. There may be a small slump but they will increase over time. A home is something everybody needs and I got on the ladder when I could.

House prices will never rise as much as they have done over the last 10-20 years (particularly the last 10), but they definately wont slump back to '80s/'90s prices as the fear-mongers predict.

Answer 4

Well they say they are however...even with a fall of around 20% the guy on the average wage is still priced out of the market unless you go into one of these buy half deals ....
The big issue is will interest rates rise ..cos with current credit strains we are on the verge of a global meltdown and the only real people to suffer will be average people ..like last time ...

Answer 5

They still haven't collapsed enough to help first time buyers - house prices have been hugely inflated for years so it's about time a bit of balance was restored.

Yep I agree with Shambo - he knows what he's talking about. Houses are only ever worth what people are prepared to pay - people drive the economy therefore if we all wised up we'd have more control.

Answer 6

House prices in the US have been dropping for a few years now. A real estate agent told me that the prices have gone down 20% in our area (Southern California) and that a very large number of real estate agents have been driven out of business, lost their own homes and cars, etc., because they can't even sell a house. A lot of people have lost their homes because their mortgages were designed to get bigger as time goes on, and they can't afford them anymore.
Of course this won't last forever. Houses have intrinsic value, and people need somewhere to live. But it's hard right now.

Answer 7

apparently they are on their way down, i think it was a bit silly to let them get as high as they did anyway as so many people are losing their homes or making themselves ill trying to pay their mortgage. luckily for me my wife is very good with money and set us a repayment budget before we bought our house. she would only let us look at what we could afford to repay not what the bank told us we could afford to borrow which was a great difference.

Answer 8

I find it quite remarkable that anyone can still afford to buy, if i had to have a mortgage i couldn't possibly pay it back.

I,m so pleased mines finished....best of luck to anyone who pay's a mortgage and don't forget to pay january's installment!

Answer 9

hope so and i hope all the greedy people who pushed up house prices lose loads of money

Answer 10

I hope so, I'll be buying one soon