Reply to: Traders betting on a 36% fall in house prices

[Doggy Styles]

Man, I'm lovin this credit crunch. Interest rates - down. Petrol - down. Cost of pretty well everything else - down. My current rate - holding.

I have practically given up the idea of being able to afford to buy a house in the UK or europe ever again, but now lit looks like it going to be afforddable again in a year or twos time.

Fantastic

Indeed.

My house is, of course, still rocketing up in value so you'll never afford that.

[Stan.goodvibes]

Man, I'm lovin this credit crunch. Interest rates - down. Petrol - down. Cost of pretty well everything else - down. My current rate - holding.

I have practically given up the idea of being able to afford to buy a house in the UK or europe ever again, but now lit looks like it going to be afforddable again in a year or twos time.

Fantastic

[Doggy Styles]

I calculated that means a 25% fall, assuming a remembered-from-TV-news current average house price of 153K.

Is it? I was working on 170K. Blimey.

[IR35 Avoider]

That would be my guess too, based on bringing house prices back down to a sustainable level, which IMHO is 5% deposit plus 3.5 times the average wage of 31K.

Except _V_'s house of course, which will spiral exponentially out of control.

I calculated that means a 25% fall, assuming a remembered-from-TV-news current average house price of 153K.

[Mich the Tester]

Houses only go up in value. Really, an estate agent told me that and he should know.

[Old Greg]

Of course my house is going up in value. Always has and always will.

You are CyberCretin's Civil Partner and I claim my fiver.

[Doggy Styles]

are you getting mixed up between how much a house costs, and how much a borrower should borrow. ?

No, you might not have seen my original post in which I also included deposits.

If those with larger deposits from equity in previous houses borrow to the maximum, they can obviously buy above-average houses. But there won't be so much of that in two years time, because their equity will deflate.

[EternalOptimist]

Not really. During stable times UK lenders were limiting borrowers to 3 times one salary plus 0.5 times the other (hence my 3.5). Each time they've drifted above that we've ended up with house price boom and bust.

We never learn (because we always think "it is different this time"), so boom/bust cycles will happen ad infinitum, but the above figures have historically been sustainable levels.

are you getting mixed up between how much a house costs, and how much a borrower should borrow. ?

[Doggy Styles]

Except you assume everyone buys a house on their own.....

Not really. During stable times UK lenders were limiting borrowers to 3 times one salary plus 0.5 times the other (hence my 3.5). Each time they've drifted above that we've ended up with house price boom and bust.

We never learn (because we always think "it is different this time"), so boom/bust cycles will happen ad infinitum, but the above figures have historically been sustainable levels.

[tay]

That would be my guess too, based on bringing house prices back down to a sustainable level, which IMHO is 5% deposit plus 3.5 times the average wage of 31K.

Except you assume everyone buys a house on their own.....

[Bob Dalek]

http://www.telegraph.co.uk/finance/e...ther-36pc.html

House prices are set to fall a further 36pc over the next two years in what could amount to the worst post-war housing crash, according to the price of contracts being traded on the derivatives market.


Of course my house is going up in value. Always has and always will.

Mine, too. A couple more months and I will be richer even the The Millionaire DimPrawn.

[ratewhore]

That would be my guess too, based on bringing house prices back down to a sustainable level...

I agree. I've got a really nice house which you shouldn't be able to afford unless you earn at least £115,000. Therefore, it won't go down in value.

That's my theory and I'm sticking to it!!

[EternalOptimist]

That would be my guess too, based on bringing house prices back down to a sustainable level, which IMHO is 5% deposit plus 3.5 times the average wage of 31K.

Except _V_'s house of course, which will spiral exponentially out of control.

you are confused

[Doggy Styles]

That would be my guess too, based on bringing house prices back down to a sustainable level, which IMHO is 5% deposit plus 3.5 times the average wage of 31K.

Except _V_'s house of course, which will spiral exponentially out of control.

[threaded]

Gosh those traders are optimistic, I'm guessing over 80%.