Do you think the UK will have a property crash like in the 80′s?
May 23rd, 2010 by
With growing debt and easy credit, do you think the housing market has finally peaked and is in for a crash landing?
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I hope so, then I might be able to afford a bloody house!
i think it will come to that in the end , house prices and the debt the country and its people are in , maybe not this year but within the next 3 !
I was talking about this on the weekend and my patner thinks it will be fine – i have been saying for months that it has to end somewhere – I have seen loads of houses up for auction around by me where first time buyers are really struggling – I think we are all in for a big bang
i hope so then i can get a bigger place.
I think that it will as most people can not afford the houses hat they have so something will have to happen
Hopefully so !!! They tell me i can’t manage a mortgage of £127k at £610 a month repayments yet i can rent a place at £700 per month no problems – anyone see the logic in it?
I’ll at least be able to afford something if it does crash
No.
Look at the History of the time = Mortgage Interest rates reached 16% (or higher) before the Property Market collapsed .
Right now the major factors driving the market are –
1) shortage of properties for sale
a) no one wants to waste £20,000 in Stamp Duty so they are extending & converting their existing property instead of moving to a bigger one
b) Buy to Let focus on smaller properties which are eaisiest to find tenents and give the best pay back
Both above means there are very few smaller properties for sale (and hence higher prices)
2) Low Interst rates – when rates were 16% you could borrow (and afford to pay) 3x Salary – with rates at 5-6% in theory you should be able to borrow up to 9x Salary. This means some-one on ‘average’ wage or £25k CAN afford a £225,000 house …
no because the economy is in a better state with interest rates under the control of the bank of england but there should be a period where prices remain static
I think a soft landing is most likely neither the Bank of England the government or the mortgage lenders want a crash. In the U.K. & probably the U.S. interest rates are at or close to a peak. Possibly the biggest danger is if lots of buy to let people have to sell. If you look at all the factors involved like scarcity of land and insufficient new houses to meet demand then a long term crash or setback seems unlikely.