House prices > Rent = Price fall

[AtW]

Repeat after me: we are not the USA.

Oh really? Somehow laws of economics do not apply here? If anything situation in this country will be worse than in the USA where they still have pretty big manufacturing and exports of stuff that people need (computers for example).

[Diver]

I've just been wandering around the local estate agents, Looking for a couple of cheap houses to buy, Phone is ringing off the hook with people wanting to rent.

Prices are dropping, nearly 30% of the houses on offer have price reduced labels.
In the past week, houses in the £150,000-£175,000 range have dropped an average of £5,000. Houses in the £175,000-£200,000 have dropped an average of £7,000.
Soon be plenty of cheap properties to buy, so I will wait til it hits bottom

[AtW]

I am sure in your many years of study on the finer points of ecenomics you have discovers that the world economy is a closed system with finite money?

If you took time to study economics you would have known that wealth can be created and economics grow, it's not a closed system with finite money.

[51st State]

Correction to title. Makes more sense now

Nothing you post makes much of any sense to be honest.

The arse may well indeed fall out of some of the BTL market, but only because so many people without the right money and background piled in as they thought it was easy money. Some of the new build appartments in Leeds for instance are already selling at a 20% discount. But there are lots of them, so the market is flooded and the laws of supply and demand come into play.

However, one section of the market doesn't drive the entire market, and nor does one area of the country drive all other areas of the country.

london/the south will no doubt see higher falls than the rest of the country, because they historically see higher growth levels.

If you are seriously looking for a wholesale 40% drop across the entire UK then I would like to buy some property on your planet.

[Diver]

If you took time to study economics you would have known that wealth can be created and economics grow, it's not a closed system with finite money.

Yeh!, Look at Zimbabwe, loads and loads of money, People are walking round with carrier bags full of the stuff (Trying to buy a loaf of bread).

[PAH]

The repo rate will settle down over the next 12-18 months, and the current tightening of mortgage lending (in terms of both affordability limits, interest rates etc.) will slowly return to "normality".

I think it's easier to predict the weather than what will happen in the next year or two. Too many variables to allow any real expert a hope of not having to just guess: massive consumer debt, house price reductions and prospects of negative equity (plus another avenue of cheap credit being removed), job losses, interest rates, bank cash-flow, world economy, higher cost of living as increased costs are passed onto customers ....

Fortunately I'm debt free so not too worried if interest rates go up or the 0% credit cards are scrapped. Unfortunately I'm also almost savings free and cash free, so maybe I should be worried!

[AtW]

Yeh!, Look at Zimbabwe, loads and loads of money, People are walking round with carrier bags full of the stuff (Trying to buy a loaf of bread).

That's the case of printing money that were not backed by something tangible. Pretty much the same is happening with house pricing bubble - money appear from nowhere.

Say let's take Intel, they created processors and now hundreds of millions of computers all around the world allow to do things that could not have been imagined 30 years ago - lots of new jobs created, a lot of improvements in services etc. Who did Intel took all this money from then, makers of Abacus? They are a positive development that actually CREATED wealth, whereas if we take house speculation then this does not create any wealth - only short term illusion of wealth that is not sustainable.

[tay]

If you took time to study economics you would have known that wealth can be created and economics grow, it's not a closed system with finite money.

Ok... now I know your economics degree was complete pants.

There is finite value in the world economy. The fact you dont understand that puts your views into perspective.

[sasguru]

Ok... now I know your economics degree was complete pants.

There is finite value in the world economy. The fact you dont understand that puts your views into perspective.

What economics degree? Atw's "degree" was a collection of hastily cobbled together freshers courses after the Soviet Union collapsed and they had to "modernise" their education system. It's what some prof thought would be the contents of a Western degree.
But of course he topped it up with a Business Admin degree at that fine institution, the Polytechnic of Wolverhampton.

[Dow Jones]

Works both ways

OK, if supply and demand dictates that house prices may fall in the coming months/years, surely the reverse should apply to the rental market, as we have all agreed more and more people will be moving to rented accommodation. Rates for BTL are only slightly higher and some fixed deals are better than the residential ones, so most landlords should hang on to properties in prime locations. Worst case scenario if you find that your mortgage goes up, why not increase the rate by the same amount? I would.