Property Boom Boom Bang
Comments(4)
There has been much talk of a property price crash in the UK, and what with the sub-prime crisis creating a credit crunch it seems that we may well be on the verge right now. Whether it actually happens now or even in another couple of years, well, who knows? But it will happen. It’s simple economics that I learned at school. When the bottom falls out there is no place for the top to go but than to fall. When the first home buyers are priced out what is left to finance the top? Nothing. Now that the credit crunch is finally stopping people from lending x 5 their salary or more it looks like the price will keep falling. I like the quote from the BBC news:
However, the falling cost of property may not be the immediate salvation many would-be home-owners are banking on.
Jonathan Davis, managing director of chartered financial planners Armstrong Davis Ltd, predicted the credit crunch would eventually be good news for those priced out of the market – but advised first-time buyers to wait.
“Don’t touch property with a bargepole for two or three years,” he advises.
“Prices are likely to fall by 30-40% over a four-year period nationally.”
If this turns out to be accurate, then many young people will feel they have already hung on long enough.
I have heard tons and tons of things from those making a fortune out of property complaining that “property is not a right” (The Sun – Mackenzie) and that people should have to work hard to be able to own a property. Who is to say that someone on £28k/year is not working their ass off. In fact I would like to take a guess that the people who have to work the hardest are those that are on the minimum wage. They aren’t basing it on how hard someone works but on how much money they earn. That’s not right at all. Everyone should have the opportunity to buy their own home. All your salary has to do with it is whether you get a mansion or a terraced house.
I do feel slightly sorry for people who might end up losing a lot of money, but the truth is that investments are always a gamble. It’s the people that maxed out their loans to get their own home who I feel sorry for. The people who lent and lent to get a gazillion properties I have no sympathy for at all. When it was going good people made a fortune, but now that it is going bad they want the government to help them out. Property should come down in price. Whoever says different is because they have a vested interest in it staying artificially high.
Well, lets wait a few years to see if prices come down by 40% and finally get ourselves a house. I have friends on £40k+ who find it hard to pay the mortgage. It’s just ridiculous and I think our time is finally coming.
I’ve always thought that there should be a cap on the number of properties anyone can own. All the housing they’re building at the moment is very expensive and the only people who can buy them are those who already have plenty of money and a property or two.
Take Cambridge for instance, plenty of new flats and apartments being built, but the prices are all £250k+. The new flats on Hills Road alone start at £450k! Who the hell can afford them except those who already have money. It’s impossible for first time buyers (e.g. myself) to buy anything as long as those with money keep pushing the prices up and up. It’s all very frustrating and unlikely to change. No wonder lots of people prefer to live on benefits.
It is very frustrating Ian. Let’s just hope that it may change within the next few years enough so that we can jump in and get ourselves a home. Cambridge is just ridiculous and I would have never hoped to have gotten a property there unless I won the lottery (even then it would have taken a large chunk of it). They say high prices in Cambridge are because of how many professionals there are. It is true that there are many many professionals in Cambridge, but lets face it they are not on that much money. The average salary must be around 40k which still puts 99% of property out of price. It’s just ridiculous!
Isn’t there some sort of 18year / 4 year cycle that happens in the property market? I`m sure I read it some where a year or 2 ago..
http://www.moneyweek.com/file/29316/is-the-global-property-market-about-to-crash.html
By looking at data spanning 300 years, my research suggests this cycle operates on an 18-year basis, having about 14 years of stable or rising property prices, followed by four years of recession. The last recession was in 1992, with house prices stabilising around 1993. That suggests that 2007 will be the final growth year for this cycle before the four-year downturn begins again.
I`v been stuck with my parents.. but hopefully now the 4year drop should be good and I can move out!! woot.
Yeah I am looking forward not just to getting a home of my own but the fact that we will be able to afford a home of our own. Now we just have to wait and see.
It is hard to predict just what will happen and when because its all dependent on the economy as a whole and even the best economists cant predict the results. Its just way too much chaos.