retired_ball3248

House prices actually fell by 0.6% on average last month, first fall since December 2006.

retired_bec8643

why??? do really think people are going to start selling their homes when the market is low?? </BLOCKQUOTE>

Do you really think people are going to have a choice ? lots can't afford mortgages so lots of houses get repossessed and the housing market is flooded with houses for sale cheap & no one to buy them because of the unaffordable mortgages. </BLOCKQUOTE>

whether your house price goes up or down has no influence on your mortgage. If my house went down in value it would not affect be one bit, it certainly wouldnt mean I couldnt pay my mortgage. Negative equity only affects those moving. </BLOCKQUOTE>


Err a market crash is due to interest rates increasing (thus mortgage interest rates going up) so the cost of your mortgage goes up if it's a flexible mortgage or it will go up at the end of the fixed term if it's not a flexible mortgage, which leads to houses being repossessed and house prices falling due to increased supply & less demand as less can afford the mortgages.

retired_kathydonatto

tbh whther or not the market crashes in the near future has more to do with the cost of borrowing more than anything else. If interest rates now under the control of the BoE steady off then people will be able to continue paying their mortgages.

If interest rates continue to rise then you might see those who borrowed to strecthing point originally being unable to pay their mortgage and this may lead to repossession etc and cheaper houses.

However with interest rates now not controlled by the gov'ment then we shouldnt have any crashes as per the late 80's. So whilst prices may drop i would expect any 80's style 'bust' scenario anytime soon tbh

retired_kathydonatto

retired_kathydonatto

why??? do really think people are going to start selling their homes when the market is low?? </BLOCKQUOTE>

Do you really think people are going to have a choice ? lots can't afford mortgages so lots of houses get repossessed and the housing market is flooded with houses for sale cheap & no one to buy them because of the unaffordable mortgages. </BLOCKQUOTE>

whether your house price goes up or down has no influence on your mortgage. If my house went down in value it would not affect be one bit, it certainly wouldnt mean I couldnt pay my mortgage. Negative equity only affects those moving. </BLOCKQUOTE>


Err a market crash is due to interest rates increasing (thus mortgage interest rates going up) so the cost of your mortgage goes up if it's a flexible mortgage or it will go up at the end of the fixed term if it's not a flexible mortgage, which leads to houses being repossessed and house prices falling due to increased supply & less demand as less can afford the mortgages. </BLOCKQUOTE>

and interest rates just magically go up all by there self do they??

retired_bec8643

No they are increased to decrease borrowing when inflation is starting to get above an acceptable level.

retired_jkrausse

why??? do really think people are going to start selling their homes when the market is low?? </BLOCKQUOTE>

Think the key thing is interest rates

If people have overextended themselves then they may need to sell, especially those who stretched themselves for a 2nd property on the buy to let market.

Now rates are up they will be facing mounting debts and may need to sell sooner rather than later.

Ergo an increased number of motivated sellers on the market and a glut of properties that need shifting at the same time as the number of potential buyers is falling off, again due to higher interest rates.

Leads to falling prices as the motivated sellers take what they can get
At the same point

Do you really think people are going to have a choice ? lots can't afford mortgages so lots of houses get repossessed and the housing market is flooded with houses for sale cheap & no one to buy them because of the unaffordable mortgages. </BLOCKQUOTE>

whether your house price goes up or down has no influence on your mortgage. If my house went down in value it would not affect be one bit, it certainly wouldnt mean I couldnt pay my mortgage. Negative equity only affects those moving. </BLOCKQUOTE>

retired_jkrausse

Think the key thing is interest rates

If people have overextended themselves then they may need to sell, especially those who stretched themselves for a 2nd property on the buy to let market.

Now rates are up they will be facing mounting debts and may need to sell sooner rather than later.

Ergo an increased number of motivated sellers on the market and a glut of properties that need shifting at the same time as the number of potential buyers is falling off, again due to higher interest rates.

Leads to falling prices as the motivated sellers take what they can get

retired_kathydonatto

well kind of and they are increased so that the people that already have borrowed have less disposable income and less money to spend on goods and or/services.

inflation is basically too much money chasing too few goods so you put interest rates up to basically take money from people so they cant buy stuff or cant afford to borrow to buy stuff therefore the demand for these goods reduces and so does the price.

however rates are likely to be going down again before they rise further so I think a housing crash is a way off yet

retired_rinkjustice

really depends on how bad your market is over there. The risky mortgages in the US are beginning to take their toll.

In the US, prices are barely holding on while # sales are dropping like a rock, so it's only a matter of time before you see prices go down significantly as well as inventory inflates well beyond demand.

New Home sales are down 21.2% compared to this time last year (with an inventory increase of 20.6%)

Existing homes sales are down 12.8% from last year (with an inventory increase of 19.2%)