House Values

[Farriercm]

Any one think that one Day in the not too distant Future, that the Bubble could burst with the Price of Houses in the UK, and houses could just loose their value?.

[Zeuhl]

Only if supply greatly exceeds demand in the areas people want to live.

and i can't see that happening

[JohnnyFortune]

Real estate prices are the same as stock market, just with longer period of "bullish" behavior (rising in prices).
So eventually, the time will come when the prices will fall (the question is - when :) ).

[naomi24]

Values have fallen before - and risen again.

[Zeuhl]

/Real estate prices are the same as stock market/

No they're not - their behaviour is totally different

that is because of fundamental differences, chief of which is that nobody 'needs' to own stock

But everybody needs a place to live

[sp1814]

Farriercm

It's indeed possible that the housing bubble will burst, but in the long run, house prices will go up and up and up.

There has never been a period in all of UK history! where house prices have fallen and remained lower than they were, say, 15 years beforehand.

[jno]

well, there was the Black Death, sp1814...

[chrissa1]

What timescale are you talking about, Farriercm? Months? Years?

We bought our first house in 1975, cost, £22k. Sold it in 1982 for £66k.
Next house bought in 1982, cost, £100k
Next house bought in 1989 cost, £110k. Lived there for 22 years and it was sold for £395,495k.

Houses do go into negative equity but do regain their correct value at the time when good economics worldwide, prevail. If you see what I mean.

[Old_Geezer]

One tends to be buying the location as much as, if not more than the property itself; plus the right to have the house there of course.

Whilst all prices can fluctuate I don't think there is likely to be a large fall soon. When they do happen they tend to be unexpected with only those predicting it for ages and ages assaying, "I told you so".

I know I put off buying my present home for ages expecting a fall, in the end I had to take the risk, and I've not seen any real fall in over a decade. Price stayed a bit stagnant for a bit, but ultimately inflation ensures price rises.

The big thing is to ensure you are not too exposed financially so you can ride out any limited period when there has been drop and not feel forced to get out.

Meanwhile idiot financial institutions are once again offering 5% deposit mortgages, not to mention government help is available to buy too, thus ensuring no pressure to drop prices. If anyone gets hit it'll be those who fall for the spin that they can afford something when it turns out they can't once interest rates return to an almost reasonable level again. It'll be the pain of negative equity all over again when it occurs.

[ToraToraTora]

I'd Blame the Tories if I was you mate.

[Zeuhl]

/I'd Blame the Tories if I was you mate./

LOL

Wasn't it Margaret Thatcher who caused the irresponsible price rise/disastrous crash/Both/Rising Damp? (delete as appropriate) :-)

[jno]

giving tenants the right to buy without having a backup plan to replace the housing sold didn't help

[youngmafbog]

1. Your home should not be treated as an investment and certainly not a short term one under any circumstances.
2. Unless the current waves of immigrants all disappear and stop breeding (let alone the indigenous population) housing will remain in short supply. Basic economics of supply and demand will ensure prices generally will rise.
3. I dont believe we are in a bubble at the moment for the majority of the UK. House prices dropped a bit but have not exceeded the pre fall price, in some areas they have not caught back up. Dont be fooled by 'average' house price rises. This is greately distorted by London and the South East.

[youngmafbog]

//giving tenants the right to buy without having a backup plan to replace the housing sold didn't help//

Damned Tories trying to help the less well off get on. Really I dont know whatever next.

Didnt see Labour rushing to replenish the stock either, they preferred to squander the cash on right-on multicultural projects.

[ToraToraTora]

yes zeuhl, there was a bit of a c0ck up by Lawson. in the Latish 80's he wanted to abolish double Miras but he made the mistake of giving 6 months warning, thus precipitating a rush and impromptu artificial housing bubble. Sadly that corrected itself very quickly and left many in negative equity for years. So yes I agree, Tory mistake there. However the right to buy was a triumph, even Arthur Scargill signed up for that one.

[Zeuhl]

Arthur likes a bargain! LOL

[Farriercm]

Did House Prices start falling in the 1980s at some time?, and that was when the 100% mortgages were introduced to help the Market?

[dave50]

i dont see how prices can continue to rise if those at the foot of the ladder can no longer afford to buy at current prices.. There must come a time when the whole chain collapses.

[Farriercm]

It is difficult to see how first time buyers can get a foot on the ladder Dave,Especially with the state of unemployment in the UK these days with the under 30s .

[Old_Geezer]

It has always been difficult to get a foot on the housing ladder. It took years of saving a decent percentage deposit before being able to take the risk.

[naomi24]

OG, //It has always been difficult to get a foot on the housing ladder.//

Don't be daft! It was a doddle a few years ago when the Labour government were in office. Britain was a veritable Utopia in those days! ;o)