Singing Pig

Hi everyone, I just wanted to gauge sentiment and ask a simple question.

 
    Has the house price crash started?

 

I personally think it has. The 6% drop we have so far (see the Halifax thread) could easily extend to 30% over the next few years. Though what appears obvious to me could equally be nonsense to someone else. It would be interesting to see what everyone has to say.

P.S. Does anyone know how to make a yes/ no poll on this forum?
 

You all know what I think....

 

YES. 

 

http://uk.businessesforsale.com/uk/Discounted-London-Property-Portfolio-For-Sale.aspx

Sad, but unfortunately more of this to come... 

Edit:

You can guess what is going to happen next from this graph: 

It clearly has with 7-8 months of greater monthly falls as time goes by.  We are looking at years of fall now as the cycle runs through. 

 

On top of that the credit crunch seems to be getting worse with its initial cause of falling US house prices showing no signs of stoping and now spreading through prime market.

 

On top of that we have the UK sub prime having its effects now. 

 

 

 

i do wonder how much of brit's and mbga's gleeful conviction about the state of the market is down to their tenant status ... i wonder if things will look different when they become homeowners ..... it's only natural though .... nothing to be embarassed about .... (lights touchpaper and stand back...) .......................

I think you will find this hard to grasp Pod old chap, but we are renters through choice, in that we didnt want to get screwed by a market that is completely out of kilter.  If I had purchased a house back in 2001, I wouldnt give two hoots about property falling 30%+, as it would be a home and not an investment.

 Everyone who signs the mortgage paperwork needs to realise 2 things; they are renting from the bank until they make their last payment, and they shouldnt sign up to financial arrangements they do not have the means to pay back (and banks are also are responsible for not saying no).

 I wish house prices never got so rediculously high in the first place, that way we could have got away without a hideous collapse in values at the same time as ensuring the nation as a whole wouldnt be in such extreme debt.  That is something the property speculators seem to forget.

 So Pod, seriously, are you coming round to the idea that this one could be as bad as the early 90's crash yet?

 

Challenge for the piggies, where do they think prices will be at

 

1) christmas

2) 12 months from now

3) 36 months from now?

(Prices from peak average of Halifax and Nationwide unajusted survey, inflation-adjusted)

My answers on a postcard are:

1) -10%

2) -25%

3)-30%

 

Edit: BTW, this is my favouritest graph in the whole-wide-world!!!

I would suggest the "Bull trap" = the unexplained 2005 boom... 

 

touched a raw nerve there?  (just kidding,,,chill) ... i'm not quite sure how to respond to such questions .... i am in property for the long term .... you may have heard that phrase before?  during The Long Term, i expect prices to go up, down and sideways ..... i repeat .... i EXPECT that. however, when i'm ready to chuck in the towel in 2030 or so, i do expect my portfolio to be worth substantially more than it is now/2009/2010 etc. meantime, my rent will creep up over the years & i will chip, chip, chip away at the mortgages .... simple plan .... maybe there are better, i'm sure there are worse (or even not having a plan??!).  it's strange that you might think that i would struggle with the concept of a "voluntary tenant" (why would you possibly think i can't grasp that?!) .... i actually have some as tenants ... & have happily chatted with them both about the market, our respective views etc.  anyway, my point was a little mischievous .... but my feeling is that the current non-property-owning bears will soon change their tune the day after they buy a home ... as i say, just human nature.  PS your graph doesn;t work?  PPS  the 90's crash wasn't that bad ... there are plenty of older landlords on here that bought plenty in 88,89,90 ... crash .... roll forward to 2008 .... can you guess how the story ends?  

Difference was Pod, back in the 90's we had over double the Inflation we have now to erode the debt.  If the equilibrium is to be reached then prices will have to fall substantially lower than they did in the 90's as debt erosion due to inflation is not a luxury the UK economy has...

BTW, I think you will find the house price line fell well below the average RPI adjusted house price line last crash, as can be seen below...

 

http://www.housepricecrash.co.uk/graphs-average-house-price.php 

A couple weeks on from the original post is anyone believing the crash hasn't started.

 

In this two weeks I have seen mortgage tightening get far worse despite the government £50 Billion.  If this carries on we are in line for a major crash, perhaps the biggest year on year fall ever. 

 

The credit crunch seems to also be continuing in the US with house prices still falling fast despite many so called experts calling the bottom so many times I lost count.  Now the British banks are suffering large loses from the British market especially Royal Bank of Scotland, they are about to repossess 4 large building companies whole portfolios at a major loss. 

 

If anything mortgage criteria is going to get a lot tougher now.