Oh dear² house prices are going to drop

[DBA_bloke]

Buy now, plenty cheapness!

[Bagpuss]

A few years ago, and I think you'd be 100% right. But the market's quite bizarre these days, with property being scarce, and the Public conciousness now being utterly focussed on home ownership. I'd say that the usual rules of thumb are, perhaps, not as useful as they once were. But then I'm a total tit at economics.

Take the bank money away though, and where will the finance come from, maybe some kind of gullible collective?

[DBA_bloke]

Take the bank money away though, and where will the finance come from, maybe some kind of gullible collective?

If the banks stop lending to each other long-term, then the market's shagged anyway.... or not... depends on BoE. Nobody wants a crash.

[beaker]

The more booms and busts I see, the more I see how they're driven by the expectations of the people in that country/area.

For example, German property prices has basically gone nowhere, while most of the rest of western Europe has boomed. Why?

Taking out factors like immigration and new home building, Germans aren't all that interested in owning property. Its seen as expensive compared to renting and there's no expectation the the value will rise. And they're right - it hasn't.

Whereas in most English speaking countries, property is seen as a sure-bet, "you're stupid if you don't buy your own house", "rent is dead money", "property is the best investment" etc.

The fact that the Brits with £££ to spend haven't embraced German property the way they have Spanish, French and Bulgarian is probably both a symptom and a contributing factor to flat prices there.

So it becomes a self-fulfilling prophecy. When the market turns, the amount the sentiment changes will affect the general mood of the market.

The question is, will Brits stay level-headed through the rough times and realise that property is not a one-way track to wealth or will they panic like their contemporaries in middle America?

[Francko]

Buy now, plenty cheapness!

Much quickness!

Houses being outsourced too?

[BlasterBates]

Even some wealthier homeowners are finding things tough. Of the five thousand or so new flats built in London's exclusive Docklands area in recent years, only around a third are owner-occupied. Another third have been sold to property investors, but most of these flats lie empty, while the remaining third remain unsold. This glut of unsold property has lowered property prices in the area, leaving many people with mortgages greater than the value of their homes, known as negative equity.

hmm

[Sysman]

hmm

What Blaster? Are you finally speechless?

Not like you at all.

[OwlHoot]

The fact that the Brits with £££ to spend haven't embraced German property the way they have Spanish, French and Bulgarian is probably both a symptom and a contributing factor to flat prices there.

I'm not sure, but I seem to recall reading that the German property market and rents there are very tightly regulated, so it's impossible to do much more than break even.

[GreenerGrass]

I'm not sure, but I seem to recall reading that the German property market and rents there are very tightly regulated, so it's impossible to do much more than break even.

And I think one of the other reasons is they had capital gains tax on all property, including your primary residence, unless its held for over 10 years or something.