House Price Poll

[andrewducker]

From

You'll note that the ratio is still well above the maximums of the bubbles in the 1970s and the 1990s.

[Poll #1337633]

Comments

[andrewducker]

Even with the recent drops, it's still looking like I should be able to expect a buyer (if there was one) to pay twice what I paid for the house, which is still more than three times my salary (still more than four times my salary in fact!)
And that's what I'm questioning - whether people really can expect that, or if it's an illusion and we're all going to have to wait for prices to drop significantly.

drplokta is right about taking interest rates into account though - the question is whether we can expect them to stay incredibly low for a while...

[the-magician.livejournal.com]

Not sure about interest rates, not sure about inflation either.

And of course if house prices do start to drop down to where my house comes back to three times my current salary, I'll be in about 60k of negative equity (which is *way* more than a year's salary before or after tax!) and a large number of other people will find themselves in a similar state (I'm guessing potentially millions of people, though it might only be tens or hundreds of thousands) thereby exposing banks (and now the British taxpayer) to even more risk.

Sure it makes it easier for people to buy, but it makes it harder on those of us who have already bought. And yes, it's my own fault for getting into debt and spending money I thought I "had", I'll admit that. I'm not asking other people to pay for that (well, if I could I would, but I can't!)

[andrewducker]

Oh, I'm not saying that massive price falls are a _good_ thing - I'm just wondering if they're likely. Taking into account the lower interest rates, it seems unlikely to me that they'll fall to 3x. 5x seems perfectly possible though.

[the-magician.livejournal.com]

Phew, at 5x I could afford to buy my hosue :-)

And of course the "benefit" of a tighter mortgage market at the moment is that it means it's harder to get a mortgage as you need a sizeable deposit, so there are more people needing to rent, so I should be able to find someone to rent my house :-) (fingers crossed!)

[andrewducker]

I hope that "phew" wasn't you thinking I know what I'm talking about...