I've been reading this forum for about a year since I first came across it in a BBC report. There seems to be a real mixed group of posters all of whom I'm sure have different reasons why they would like to see an adjustment in house prices and I'd be interested in hearing from all.

It may seem like a silly question but one persons joy in falling house prices could be another persons nightmare if they're living on the edge and I reckon there's a number of site visitors who read the posts hoping that prices remain firm.

Personally, my Vested Interest is that I would like to trade up from my semi but right now the differential in price between what my house is worth and what I want is too large for me to feel comfortable in financing so I'm waiting for prices to come down on the assumption that, for example, if my house halves in value the extra I would have to pay to trade up will also half making it more affordable.

Would like a crash because everyone in the UK has turned into some grotesque "loadsamoney" caricature; utterly self-obsessed with consumerism and greed and gloating. Inflation (yes, I'll rant on about M4 again) is rampant and we are at the top of the cycle - which, like the bottom, is never a good place for society to be.

I want a house price crash because I

A) Don't want to buy an overpriced house.
I missed the boat on buying a cheap one. I've saved alot of money (much more than a decent deposit), because I wasn't sure if I was staying in this country or not. But I would have been better off buying a house and pissing my money up against a wall. What'd fck me off even more, would be buying an overpriced one and then the crash happening.
C) I want to be proved right. I'm actually afraid to tell people now I think there is going to be a crash because of reactions I get. One of my mates, flatly refuses to believe it even a possibility. I can't wait for a crash going into full swing and everybody knowing it.

but
I quite understand that a recession could be bad for me too. But the market will crash or not regardless of whether I buy a house or not.

I want to buy a home for me and my family without comitting financial suicide.

Agree with all of that. Yes I would eventually like to buy a place that I think is worth the price not the over valued cr*p I see out there at the moment. I also think the consequences if there isn't some sort of crash or correction will be far worse.

I'd like a crash because it might give me option to move up should I want to, and because I'd like to see younger couples able to buy a home thay can afford to bring up their kids in. The situation at the moment is not only socially devisive but a demographic nightmare in the making.

Sadly, I don't think it's going to happen, the banks will probably grant a -20% correction over the next 5 years.


Two bed new builds will tank where the developers have buggered up the supply demand ratio. ie every town centre.

I'd just like to be able to buy a small (more than 1 room, and I'm not specifying bedrooms here), modest (yet not sh1te) flat that doesn't cost a third of a million pounds and put me in debt until past my retirement age, despite earning well over the national average wage, by some margin.
It's all I need, and I'd be quite happy with that. Sure I'd like more, but I don't expect it. Am I asking too much?

Coz I want a cheap house????? Going out on a limb here....

I don't understand. Why would you want a crash if we can have a steady correction instead?

There is no sound economic reason for wanting a crash. A crash will benefit only those who wish to see others (rightly or wrongly) suffer for their greed. Unfortunately, a crash will take the rest of the economy with it, along with a great many jobs. No point in having houses at £50k if you have no income is there? Surely any sane person wants to avoid a recession at all costs?

IMO, positively wanting there to be a big crash rather than a steady deflation can only be the result of petty jealousy doing the thinking rather than rational 'the greatest good for the greatest number of people' motivations. (Please don't take this as a personal attack on you Mattley. I am speaking about the general atititudes that come through in the posts of a significant number of forum members).

*dons fire-proof suit*

Answer:

Greed & Jealousy

Why would a crash in house prices mean job losses & problems in the ecomony, are you implying that the UK future is based on stable / increasing house prices ??.

Last crash (and I remember it well) people lost their houses but not necessarily their jobs

I want a crash to prevent the creation of a whole new deprived underclass, unable to buy their own shelter in a developed country, and enslaved to the selfish BTL brigade et al. Extremes of any kind are bad, including high prices. The country needs a correction. Anyone who believes a bubble can be inflated forever is a fool. Eventually it will pop. And there's going to be tears before bedtime.

Shame on anyone perpetuating the bubble and adding to the misery of thousands.

Is that a good enough reason?

I want a crash so that the everyday joe public, can afford to own a place to live and not just the Uber-Rich or "Property Investors".
A crash wont affect the rich, but it will stop investors buying everything in sight and then selling the property to everyday hard working people so they can drive around in posh cars and telling everyone how great they are.

Sorts it all out quicker, that's all.

A slow correction only helps the VIs as they have time to adjust their market straegies, and dig the loosers further in.

Exactly the same here.

Yes, I could currently afford the near-grand extra per month it would cost me to buy something similar to what I'm renting, but that would leave me in the "one IR hike and you're b*ggered" category, and I like being able to actually sleep at night. If we were seeing 7%+ wage inflation, then yes, I'd be quite happy to buy, but at it stands, it's just a totally farcical notion. May as well chuck in the fact that I find all this money being hurled at totally and utterly non-productive assets quite abhorant from a longer term perspective. If even a fraction of money, time and energy that's been wasted on property "investment" had gone in the direction of genuine businesses, we'd be a much, much better state than we are now.

Why do I want a crash as opposed to a long, drawn out slide? Well, a 2-3 years of extreme economic pain (I might loose my job, as might we all) then a trough, then away again is a damn sight better than 6-7 years of fairly extreme economic pai, the a trough...yada, yada.

I don't want a crash and I won't revel in it ... I would have preferred more sensible policies over the past several years. But we can't get there from here.

Nobody owes Britain a free ride yet that is what we expect when we borrow to live beyond our means (our excessive indebtedness and HPI are inextricably linked). The world is changing; diminishing resources colliding with increasing populations and aspirations. We need to make a wholesale switch from consumption to creation PDQ, or we're bankrupt -- economically, culturally, societally, spiritually. We need a bout of creative destruction.

At this point I think the opportunity for a 'steady deflation' (aka soft landing) is behind us; our leaders have chosen to postpone the inevitable, meaning they have chosen a worse eventual outcome in return for a short-term continuation of the party.

They may postpone it for a while longer yet but they must surely now be running out of road...

I don't want a "crash" per'se, but perhaps for the market to stabilise would be in my best interest...

Sleep at night, surely not. Especially when ITV put on such great game shows

I am not implying anything of the sort. What I am saying is that the UK is in a economic corner at the moment. Our economy is finely balanced, and far more interconnected (and thus vulnerable) that it was in 1989. Couple these factors with the rise of the internet, 24 hour news and our new found obsession with gossip, and you get situations like the run on Nothern Rock blowing up within a 24 hour period; unpresedented at any time in the past. In short, it ain't 1989 anymore even though a great many jobs were lost in that recession anyway.

It is all about confidence. House prices are a big issue, and a bif drop in a short period would cause bankruptcies, further bank runs and a crisis of liquidity. There is no way, in this day and age, with the media and the rumour mills as they now are, that the above conditions would not trigger a massive loss of confidence and then a recession.

Unless the prize is someone to show up and perform menial but essential admin tasks on a load of servers so as to save me doing it at half past midnight, I ain't interested. Oh, or a deluge of naked tarts. With beer.

Now where's the remote...

Not really, no. You will get that with a 'soft landing' slide over 2-3 years. Whilst I agree entirely with your sentiments, surely you want to minimise the collateral damage of the needed house price correction as much as possible don't you? I have never invested in property. Why should I, and many like me have to suffer just so others can have their revenge on the BTL'ers? They will get their commupance when the prices drop anyway. A big drop just harms the rest of us far more....

Because I think that it's morally wrong to expect one person to work for nearly 12 years to afford a modest home (say 16 after tax!!). That is, every single penny that he earned during that 12 / 16 year period would go to paying off his house. Sounds preposterous, I know, but do the maths (mine was based on a repayment loan of 6 times salary (earned 30, borrowed 180) at 6% over 25 years.... not uncommon these days.

I very thoughtful post is I may say so, and right IMO. What our 'leaders' choose to do, and what is the right thing to do is not always (ever?) compatible. I guess Brown never had the balls to intervene before now in caes he cocked it and upset to apple cart completely.

The question is Vlad, would you rather see a short, sharp, shower of poop, in which a lot of assets are wiped out quickly, and the government are powerless to intervene, or long, slow slide, with the government fighting tooth and nail to keep things on an even keel, making all the stupid mistakes in the book, and still failing to halt the inevitable.

The way I see it, there is a massive credit bubble that's just desparate to burst, and more chance Drongo, Darling, and the rest of our current Dear Leadership have to try and play Mum with the sticking plasters on the way down, the more of a mess they'll get us into. That's why I want a proper "crash", not a replay of the 70s without the flares.

Give me the 'managed' slide (!) any day of the week. A short sharp drop associated with the economic and borrowing position that we are currently in will make 1929 look like a little problem over a card game. It may take years to recover from it. The problems of the 70's were of entirely different origin (although with some roots in the Barber boom of 73-74), namely the growing pains associated with the end of the post war consensus, Keynesian methods becoming suddenly ineffective causing stagflation, the energy crisis and the rise of the Unions. In short a whole different set of issues.

I thinbk even the governement know that the current situation cannot continue much longer. It is just a matter of finding the best way out of this mess without triggering a calamity.

Firstly the obvious, because I always like to think I'm getting some sort of value for my hard earned money.

Now the second reason may sound a bit sadistic but I truely believe this island of ours needs to go through some hardship with the aftermath of the probable recession/depression. Life has of lately been easy with all the money sloshing around from our miraculous economy (selling houses to each other), and IMO, people have lost the sight of what is important in life i.e. family, social issues, your neighbours and just giving a flying f*ck about anything because ,hey , I'm doing alright jack....so what if the price of petrol is going up I can afford it

If it takes hardship and a bit of time to reflect on your situation then I think people will learn again to appreciate good fortune instead of expecting it. Neccessity will drive people to be more inventive, and the truely able among us will flourish .

Point taken entirely. I just have horrendous visions of a long and depressing series of near-nationalisations of banks, a profusion of mortgage-holder prop-up schemes, and mega-crisis for Sterling at the end of it all. It'll be interesting* to see how the next few years play out. I just worry terribly about the government's capacity to dig deeper holes than we're already in.

* In the "live in interesting times" sense.

.....I read and post on the site because I like to trace and try to read the market....there is a lot of insight on here which you do not get in the day to day press ...and many posters can see through the weaknesses of Government, on which most of the media have been slow to pick up ....

Do you think the choice of a 'managed slide' exists, though? Bleakhouse made this post in another thread today:


It seems to me that 'managing' the slide equates to allocating the losses to the taxpayer as a way of spreading the pain over a longer term, if more thinly. I believe that prolonging the pain also defers the recovery, and the moral hazard in socialising losses made in pursuit of private profit may lead to worse problems down the line.

The other possibility that I see is to conceal the problems while leaving them on the balance sheet (continuation of current policies, in effect). The problem with this is that the entity to whom the balance sheet belongs (whether that's a household, a bank or a nation) is no less sick, even though the diagnosis has not been made public.

Ditto.

It's the only way to return to reson and rationality.

Right now, almost the only way to get ahead is by massive speculation on the part of homeowners. (for the middle/lower classes anyway)

you aren't going to get it through wage growth, you aren't going to get it through savings, because of all the inflation.

so if you want an environment where a little sanity is rewarded, like a proper savings, not running up crushing debt etc., there has to be a big corection.

if not a crash

A short, sharp crash (a correction of 40-50% within 18 months / or back to 2000 price levels*, say) would benefit more people than it harms and is better than the alternatives for the long term economic health of the nation.

It won't happen like that though.


* numbers plucked out of the air.

I do not want a crash but a realignment of prices. I too missed the boat on a cheap house but managed to buy a damp ridden flat for 100K which appears cheap now considering it is worth 140K (even with the damp)

I managed to buy at 4* my salary so I am supporting those who graduated a few years after me but those few years have led to them being priced out completely which seems a little unfair to me.

I too would like to trade up, if only for the reason of stopping EA's accosting me in the car park or knocking on my door asking if I would consider selling as they have a vast amount of people looking at the lower end of the market at which point I give them a rant about overpriced property at which point they decide upon strategic withdrawal.

I personally agree with this. The treatment may be so severe it may kill the patient. In the early 90's the recession that accompanied the crash was terrible for those affected. Not all were greedy BTL idiots. Most were normal people who lost their jobs and had no way of paying the bills without income.
My family was seriously affected, and to be frank, never really recovered from the hardship of the early 90's. My father and myself were employed by major construction firms (not housing) and the market stopped dead.
It took 4 years, a degree and a dose of luck to finally get back on my feet with a young family. My father never really recovered though and years later he has a resigned acceptance that he will be poor in old age.
I am now in a position where my partner and myself are consultants in the construction industry. We live relatively well and save probably 40% of our salary a year. We have saved well into 6 figures in the last 5 years - however, that fear will never leave you and I would not wish that on anyone else. I too want a correction in prices because I want my daughter to have in chance in years to come. To wish for economic meltdown is folly. You must be very rich/very stupid/In a cast iron job to wish for this.
It may well happen but its my belief that house prices will be the least of your worries.

Um. So I can afford somewhere to live.

So I can load up on properties, become a BTL private landlord and retire early.

I'd like to feature in various Property newspapers discussing how I made my wealth and pass on expert advice on how to ramp the market.

I just want a house for my (future) family. Nothing fancy. Ideally a room each and a garden. Possibly a spare one too and a study and hell lets go for off street parking too! Otherwise I live a sensible lifestyle, derive enjoyment from social and personal interests, reject abject consumerism, etc. I probably wont even get a flat screen telly 'til my old one finally packs up !

As a home owner my ideal situation is for house prices to fall back to when I bought (Jan 2006) - or just remain steady. I would even take a bit of neg equity if it meant I could get the kinda house im after. If it doesnt happen, I 'll be happy in my little semi. Will have paid off the mortgage before im 35 at this rate!

Im a bit sceptical on some of the arguments, some people clearly have a VI and are just here to spin crash stories. I dont like spin from either pov! One of the big errors is that arguments often consider things in isolation and assume all is equal - underestimating how things will change around us and the complexity of interaction.

Ultimately I hope people get what they want, but hope they realise it takes times and work. Its hard out there .





everyone? that includes you! Doesnt include me.

I want a house after having saved/lived frugally for years. I don't see why I should accept a devaluation (in terms of HPI, my money is now worth 1/3 what it was 8 yrs ago) of my cash. No other section of society would tolerate it (Northern Rock Scare).

No, no not at all! I was answering another posters question. I persoanlly do not believe that a slide can be managed, more guided than managed.....