Ten tips to survive a property downturn

It’s the news that every homeowner has been fearing – house prices are definitely falling.

Halifax says prices fell 2.4 per cent in May and are now down 3.8 per cent on a year ago. Last week Nationwide also reported that prices fell 2.5 per cent in May. Most experts expect there to be plenty more bad news to come.

But there is no need to panic. Falling house prices bring opportunities for buyers. There is also plenty that sellers can do to ease the pain. Here are ten tips to help you ride out the property downturn

TIPS FOR BUYERS

Falling prices are positive

As house prices have soared, more and more first-time buyers have been priced out of the market. A slowdown could change all that as more homes fall within the range of would-be homeowners.

A downturn is also good news for people who already own a property and would like to move to a bigger home or more expensive area. Trading up gets easier in a downturn because the gap between the cost of smaller and bigger properties narrows. Say your flat is on the market for £250,000 and you are trading up to a £400,000 house. Prices in your area fall 10 per cent meaning you take a £25,000 hit on your flat but the price of the house drops by £40,000 to £360,000. That’s a net gain of £15,000.

Don't count on big discounts

If you’re holding off buying, hoping that prices will plummet, prepare to be disappointed in London and the south east as property experts believe prices will remain resilient. Analysts also expect prices in Scotland to hold up as well.

However, it doesn’t hurt to haggle. There is so much bad news around that sellers are feeling nervous – experts say that you could easily knock 10 per cent or more off the asking price.

Rent to lock in profits

If you’re convinced the market in your area is going to fall further be prepared to move into rented accommodation and wait for the market to drop before buying back in. House prices need to fall by about 4 per cent to make it financially worthwhile to sell to rent, according to property analyst Knight Frank.

Do your homework

Find out how much similar properties have sold for by typing the postcode into the website Hometrack.co.uk or Upmystreet.com. But remember that these are backward looking: they tell you what homes sold for in the past not what they are selling for now. Propertyforecasts.co.uk, which estimates future price movements for the next five years, is also worth a look, although it costs £15 for a full report.

Get your finances in order

As sentiment has soured, fewer vendors are putting their properties on to the market so you must be ready to pounce when your dream home comes along. Talk to a mortgage broker when you start looking to find out how much you can borrow and what the best deals are. You improve your chances of having access to the best deals if you have a deposit of 20 per cent or more, don't need to borrow a high income multiple and have a spotless credit record. Several brokers such as L&C (www.lcplc.co.uk) and Charcol (www.charcol.co.uk) have useful calculators which estimate how much you will be able to borrow.

AND FOR SELLERS...

Price realistically

Putting your home on the market at the right price is key if you want to guarantee a quick sale. Get several valuations from estate agents and also take a look at the websites mentioned above – then set the price somewhere in the middle. As a rule of thumb, estate agents suggest you should ask for about 5 per cent more than you realistically expect to get. However, if you really need to sell fast, set an asking price slightly lower than your ideal from the off – it looks better than desperately slashing the price at a later date.

Flexibility pays

You’ll make yourself more attractive to potential buyers if you can move out fast – it also gives them less chance to back out of the deal. Consider moving into rented accommodation if you are offered a good price but have nowhere to move to.

Don't move, extend

If you’re moving because you need extra space, extending your existing home could be cheaper and less hassle. However, you need to make the right improvements at the right price. A loft conversion is the single most valuable alteration you can make to your home, according to a study by Nationwide. By adding 300 square feet of floor space made up of an extra bedroom and bathroom you can add over 20 per cent to the value of your property. Turn a two-bedroom house into a three-bed and you can increase its value by 12 per cent. But can you bear the builders and the mess?

Don’t be afraid to pull out

Just because you’ve hoisted a “For Sale” sign doesn’t mean that you can’t change your mind if you’re not seeing the interest you hoped. Ignore the hard sell from your estate agent. They’ll probably try to convince you that there are lots of interested buyers waiting in the wings – the chances are it’s the first time you’ve heard their voice in weeks.

If you don’t need to sell, stay calm

It’s a statement of the obvious but one that, in property obsessed Britain, we often forget: if you’re already on the ladder and not planning to sell in the near future it doesn’t matter if house prices drop. The chances are that by the time you need to sell prices will be back up again. Even if they’re not think of all those juicy gains you’ve made over recent years –house prices are up an average 59 per cent over the past five years, according to Halifax. A house that was worth £120,000 at the end of 2002 was worth nearly £200,000 in December. Think about all that “free” money and stop worrying.

More from Money Central:

Are house prices heading for a 1990s style crash?

House prices: the 10 most recession-proof counties

Ten easy ways to drive down petrol costs

Ten tips to survive a property downturn

The thrifty fifty - 50 easy ways to save cash

The 10 most ridiculous fines of all time

The 10 biggest stock market crashes of all time

The 10 most infamous heists ever

The 10 craziest parking tickets ever

The 50 wierdest terms of financial jargon - and what they actually mean

Comments

[Jonathan]

"Don't count on big discounts

If you’re holding off buying, hoping that prices will plummet, prepare to be disappointed in London and the south east as property experts believe prices will remain resilient. Analysts also expect prices in Scotland to hold up as well. "

Property experts? Do the mean Phil and Kirsty? Ha ha ha ha ha ha ha...

[ian wilkinson]

mine's bigger than yours and if you don't all stop being silly i'm taking my ball home and telling me mum.
ian age 39

[Thomas Lacey]

To correct untrue facts!!!

Personal debts last year was never 101% of nationa GDP. In 2007 National Debt was 43% of NAtional GDP. In 2007 national Gdp was in the region of 2.600 billion pounds. National Debt was 1,300 billion pounds.

[Krisha Manchester]

You all have some growing up to do.
In 2012 you will all regret all this non stop bickering with one another.
I say live happily..grow your own vegetables..stop worrying and spending sooo much time on all this chitter chatter amongst yourselves...
Has any of you lot actually solved anything?!
Get a grip..
Talk the talk walk the plank!
Grow up!
K

[Dvae Scratter]

Paul in Coventry and Grimnir
And your points are?

To Julie Willnot

Dave Scratter - a stupid name? And Julie Willnot isn't? I bet nobody thought up any "witty alternatives" for you at school.

Presumably you're a big, grown up girl now. What was it that you "Just 'willnot' do?"

JW - a top tip - If you're going to make snide comments about people's names, make sure you don't have a monumentally stupid one yourself - or at least don't broadcast it!

[Thomas Hicks]

john from essex in reply to your comment about the property market you seem to be spot on.
In fact the entire investment system is build on the hopes and dreams of the average Joe that is trying to make a buck. Which is why th bubble will only ever shrink and expand but never burst.

[Thomas Hicks]

Some great advice there guys, thanks. I purchased my home 2 years ago and am torn between selling or riding it out. I'm happy where i am so i figure the market will be on the rise again in the next 4-5 years and i can recoup any loses i incur in the next three. Am i right to assume this?
P.s. some of you guys really need to put your handbags away. It's like 15 year olds arguing after their first economics lesson "Well my house is worth more than your house", dear me.

[Melanie K]

The ridiculous high rate of stamp duty was justified as it was needed to stop the overheating housing market.

Why is no one calling up this utter lie now.

There is no justification for it now at all.

It must be abolished.

[Chris]

One of the best investments you can make in times like this, infact any time is in GOLD! its the only real money! if you go back 5000 years gold was just as powerful as it is today! you will never lose out in the long run with it, check the History books, 10-20% of your wealth should be in gold!

[Emma Haller]

The recent hit that the property market has taken has infact increased the number of long term rentals on the market as a solution to meeting rising mortgage payments.

[Emma Haller]

without estate agents the property crisis we are facing would be much worse

[Matt]

"If you’re holding off buying, hoping that prices will plummet, prepare to be disappointed in London and the south east as property experts believe prices will remain resilient. Analysts also expect prices in Scotland to hold up as well."

Are these the same experts who predicted that there would be no property crash and that house prices would go up forever? Or is there a different set of experts that only make predictions once all the other experts have been wrong?

[Big G]

Lots of buy-to-letters sold last year as they only would have to pay as low as 10% in tax because of taper relief. The effect is to reduced the avereage house sold price because buy-to-letters operate at the lower end of the pricing bracket. The reducticion in loan to values which were as high as 120% and are more like 90% means that the balance of 10% to 30% has to be obtained from elsewhere. Consequently the 'average' rate for these loans will be higher than it was last year especially if you take into account the fact that recent base rate cuts are not reflected in the mortgage lending rate because mortgage rates are priced off 1 and 2 year sterling swap prices which are nearly 1% higher than a year ago.
Also banks and other intitutions are going to want to make back some of their sub prime lending foul ups hence the higer rates.
Last year base plus .25% as a tracker mortgage was easy to find, now base plus.75% is difficult.
So now the first time buyer only has a certain percentage of their income to spend on total mortgage outgoings so prices must fall at the lower end to attract activity. Look at the stock exchange prices of the builders...down 30 to 40%, so these guys must reduce prices and offer more incentives to attract buyers.

[Steve]

This issue causes such widespread bitterness because absolutely nothing else has created so much social division, wealth inequality and envy in mainstream British society in the last 10 years than this awfull, horrid property ramping phenomenon! Can young people who feel they can never afford a home be blamed for feeling envy when they watch a load of mid 40s home owners driving prices up by 1000's a month-of course not, and they have had to endure that for over 10 years until recently! Can people have have bought in the last 3 years be forgiven for wanting some sort of decent return when they have taken on large mortgages and paid fees etc, probably that's understandable too-although there's less reason to sympathise with the second group than the first!

The whole property price inflation phenomenon in this country in the last 12-15 years has been ill-advised, damaging to society, has split society ultimately, only really benefited the very rich and now been proven to partially unhinge the economy as the massive amount of public personal debt needed to keep the whole torrid ball rolling threatens to implode in on itself! Please NEVER AGAIN!

I also would like to say that people also buy and rent for reasons other than those delineated here in the responses! What about job mobility and people working in specialist jobs-both a widespread feature of modern society? I persoanlly purchased a flat 3 years ago when after 12 years of working on short term contracts I was finally offered a job contract labelled 'permanent'. The word permanent has to be in inverted commas because within 18 months I found out that the firm's finances were limiting and it was in my interests to move jobs/city. Rather than pay solicitor's fees, stamp duty etc. all over again I rented that property out and now rent myself! So I am a landlord, do I wish to parasitize off the tenant?, or make huge profits?, or retire rich?-NO! Now my situation is irrelevant by and largely to the discussion here, but it serves as an illustration that not all people who rent are in the BTL, greedy-parasite mode described so luridly by other bloggers here! It is dangerous to generalise!

If I could have one wish come true it would be that we never slide into a mess like this again! Let the prices fall 30-40% over the next 3 years, then ban those vacuous, awfull, vile property porn shows and introduce some regulation and moderation into the BTL phenomenon! I'm all for rationaing properties so no-one can have more than say 2, why should we have a country where some people can't have one house and others 'own' 150?-is that anyone's idea of a fair system of running society? Return houses to being places you live in and not income supplements, pension supplements, investment portfolio components etc, and restore much needed sanity to the crazy system!

[Carl]

The UK is over populated , the average citizen couldn't afford to buy a decent property without taking on a mortgage of 5x there salary and with living costs sky rocketing no wonder this economy is failing. The banks are in debt and if house prices fall these debts will be increased further causing interest rates to rise, Which is bad news for everyone including first time buyers and those with credit cards and loans. My only advice is to ignore the media , cancel your credit cards and save a deposit of at least 5-10% of your purchase value. The 50bn injection from the government to the BOE doesn't really solve the housing crisis but I guess it will provide some stability.

[Michael]

While property may be a good investment if you are a new home buyer that is borrowing you don't want to be borrowing money for an asset that is about to fall in value. Booms are followed by corrections as the market overshoots on positive sentiment.

[Olly]

Except Mark, that the govt. does not set the interest rates, the BoE does, and the rate looks as if it will have to rise (due to their mandate of keeping a lid on inflation) not go down.

[Vans]

There's a lot of people being smug, bitter and judgemental here. I say enjoy and love your home, whether you are renting or buying, appreciate the sanctuary and shelter it provides for you and invite lots of people round, so all our neighbourhoods wherever we live, are nicer, safer, friendlier places. Then we'll all be richer...

[Mark]

Of course prices are going down. If enough people focus on it the momentum will build in that direction. Long term house prices always go up; all this talk of a crash is a short term view of the market. I suggest the government will continue to reduce interest rates, even at the cost of inflation, in order to stabilise the property market. Not good news for the GBP exchange rate but nevertheless a short term solution. Afterall, after 2008 change in Washington might bring something closer to the status quo back to the global financial markets. In the interim we can all talk negative - A fast dropping market will leave loads of opportunities for big fat profits while others become homeless.
As an addition note, It will be interesting to see what happens to the finance department in the UK. The man in charge there has a great history from time at the transport department when he lost billions over the Railtrack/Network Rail situation.. Now they gave the moron the economy to manage.

[JJMM]

wow!!!!!!!!!
people need to calm down and get a life!

i am 21 and i have 5 properties started of at 18, doing really good and pleased with myself.

i have read comments through the forum and iam shocked with the comments.

YOU WILL ALWAYS MAKE MONEY IN PROPERTY - LONG TERM 10 - 20 YEARS

SUPPLY AND DEMAND -WE CAN'T BUILD ENOUGH TO KEEP UP TO SUPPLY.....THANK GOD!

DO NOT EVEN THINK ABOUT COMPARING UK AND THE----- (USA)

WHILE PROPERTY, FOOD, GOLD....GO UP IN VALUE PAPER MONEY ALWAYS DROP IN VALUE -FACT!

The goverment just can't stop printing.....ah what a loser but i guess thats the way the cookie crumbles!!!

Yes we have had the media and it's big mouth, blagging away because it has not got any other news to tell it's people.....REMEMBER MEDIA IS THE MOST POWERFULL TOOL IN THE WORLD, I CAN WRITE ANYTHING AND CHANGE YOUR THE WAY YOUR MIND THINKS!

god bless

JJ

[Paul]

ExPat Brit says "Invest in your local community by buying into the property market, and you will then be a contributing member of society rather than a social parasite living under the roof of someone who has been prepared to invest in the future.
"

I say "I love living in someone else's investment, especially as the rent is only about 66% of the cost of an interest-only mortgage. oh and the investment is falling in value. Maybe I will become a contributing member of society in 2-3 years' time when I buy it for half it's current value with cash and no mortgage"

[peter]

he's correct about germany though , there isn't the fetish about buying houses like the UK

[Iain]

Interesting comment on estate agents, even if it was an aside. I believe controlling that crowd of bloodsuckers would make housebuying and selling about 10 per cent cheaper.

[ross]

Well I hoped to gain something useful from this, and yet all I read is gloating, racism, smug folk living abroad and wild claims by a legion of armchair experts.
Im sure there is some sound advice in here, but it's lost in a sea of anger and hate
Shame on the lot of you

[DAVID]

NOW NEARLY 60 AND HAVING LIVED IN THE UK MOST OF MY LIFE WATCHING ALL IN THIS FINE LAND BEING RIPPED OFF LIKE NO ONE ELSE IN EUROPE. SUCCESSFUL GOVERNMENTS A DISGRACE TO THE WORD DEMOCRACY.
PEOPLE FEARING TO VENTURE OUT AFTER DUSK FROM FEAR OF ATTACK BY VIOLENT DRUNKEN YOBS RULEING OUR TOWN AND CITY STREETS.
HIGHEST PRISON POPULATION IN EURORE
CORRUPT FREEMASONS RUNNING THE POLICE, COURTS AND MANY BIG BUISNESSES.
A POLICE FORCE ONCE THE ENVY OF THE WORLD WHICH NOW HAS VIRTUALLY NO TRUST OR RESPECT WITHIN ANY CLASS OR PEER GROUP.
A MEDICAL SYSTEM REDUCED TO DIY DENTISTRY...
I SOLD MY HOUSE AND LEFT,MOOVED HERE TO GERMANY WHERE I CAN BUY A NICE ONE BEDROOM APARTMENT FOR UNDER £50,000 AND STICK THE REST IN MY POCKET......
SADLY THE BEST ROAD IN ENGLAND IS THE M20 TO DOVER..AND WHEN YOU ASK FOR YOUR TICKET TO CROSS THE MOST EXPENSIVE WATER IN THE WORLD (PER MILE)
JUST SAY "ONE WAY PLEASE*.

[ROSTRON]

The UK is over populated , the average citizen couldn't afford to buy a decent property without taking on a mortgage of 5x there salary and with living costs sky rocketing no wonder this economy is failing. The banks are in debt and if house prices fall these debts will be increased further causing interest rates to rise, Which is bad news for everyone including first time buyers and those with credit cards and loans. My only advice is to ignore the media , cancel your credit cards and save a deposit of at least 5-10% of your purchase value. The 50bn injection from the government to the BOE doesn't really solve the housing crisis but I guess it will provide some stability.

[expat Brit]

To "Sue in Spain": You should learn to read the forum before you commit your thoughts to print, because it wasn't me who said that. It was the guy in the next post down. No, I'm not living in the rabbit hutch dream in rural Bulgaria, I live in a 5-bed, 7-bath detached American-style home in Manila, Philippines. Next time, be more careful and notice the blank line between 2 posts.

[Patrick]

Hahahahahahahaa so London and the South East won't fall eh? Because this house price crash will be COMPLETELY DIFFERENT to eveery other crash, eh? And why?

Nonsense.

Prices will fall in London, hard, the city is in trouble, and more than anything, in every other crash prices have fallen in London.

The Poles will be off soon to a more successful country, now that the city is laying people off. That overcrowding, in an immigrant city, won't last long.

London crash ahoy.

[willie]

I built my home in 2004 at a cost of £169500 for ground and building. Its a detached bungalow set in 1/2 an acre. Got it valued last summer at £500000+! Had to take a seat when I heard the estate agent come out with that one! The market has gone absolutly crazy. I much more realistic value would be £300000-£350000 imho. So I predict a 25% to 30% drop in prices from the peak valuations last year? I live near the North Antrim Coastline. I bought two apartments to rent out in 1999 and 2000 for £55000 each. I sold the first for £75000 and second for £85000 2 years later. The owner of the first tried to sell for £200000 and the second for £190000 last year. Both are still on the market! People had gone crazy last year and would have paid any amount just to jump on the bandwagon. The wheel has just come off and its crashing in slow motion! Nothing the government do or could do will put the wheel on to stop the crash now. So just keep smiling....

[Jason]

I moved to Ireland in 1998 and got involved with the property market here and to say the least, this country is in far more trouble than the UK, for example a buy to let property here, now requires you to fund half a mortgage yourself as the rent will only make up the other half, at least back in the UK its much closer, just shows how overvalued property is here.

[Dave Turbert]

HOUSE PRICES ARE falling and will continue to do so at a greater or lesser extent in all areas. Banks however are in the business of lending, once funds are available buyers will buy at prices that make sense. This price level as 1. the level at which a potential homebuyer's interest payments are equal or lower than rent and 2. the level at which landlords for a given rent can see a gross return of 7-8%. Looking at it this way house prices in many areas do not have far to fall, once banks have money to lend.

[paul]

One alternative to renting while the house value decline rages on, and has not been mentioned among the above bitter sweet big girls blouses brigade , is to buy a small b and b,live and work in it. Then when you sell the property you sell it as a business rather a home which means you don't lose out in the declining housingmarket. Its an alternative to renting anyway.

[Chris]

At the end of the day the rich will get richer and poor poorer especially when jobs start to go too. The buy to let market will simply start centralising into the hands of a few who can afford to sit this out and then control supply and demand of the rental market, which has been shoving up prices of private property ownership. So meantime be happy and enjoy what you can in life at least global warming has turned to global cooling at the moment.

[julie willnot]

David Scratter, is that your real name? It's a stupid name but it suits you.
This comment is intentionally stupid to make you feel more at ease.

[JasonB]

Historically, as a rule of thumb house values will double every 10 years. This is fact and this is what has always happened despite the booms and busts. Not only that, have you ever noticed that your mortgage repayment is roughly (and i do say roughly) the same amount that your property will have increased each month as an average over a 10 year period? A typical homeowner buys a property to live in, their family grow up in it and eventually it is sold. So if, like most people you live in your home for 25/30 years or more, a downturn in the property market is no big deal. Realistically it only effects property investors. Well, all business has its ups and downs and risks. The normal homeowner will always have periods of higher and lower monthly repayments, we have had lower for a long time, now we will see higher. Most people will keep their house, a very small percentage will lose theirs, but this always happens whether boom or bust. Life goes on and eventually your house price rises and you make a nice profit towards your retirement - unless you are in it for short term profits - then you have a problem - but you took the risk!!

[Grimnir]

Dave Scratter - it must be nice to not be a mortgagee and to be a prat at the same time eh? Slum-dweller - you need a reality check - get a life mate. It is precisely opinions and views like yours that cause property trouble in most areas - greedy sods who have no intention on ever really 'living' in an area and just use proerties as stepping-stones for their own selfish, self-centered egotistic means. Grow up. Materialist idiot.

[gary]

bought a flat in 92 for 27k, went to sell in 94 and was told i would not get what i paid for it so i rented it ,someone else paid the mortgage. Didn't look at price much although i new it was eventualy rising. Sold in 06 for 140k.
Yes it may drop but the highs will be reached and surpassed again

[Paul Henry]

Just imagine if the UK had adopted the euro back in 2001...

And what ever did happen to that referendum on the euro that we were promised?

[JJ]

Turning a two bed house into a three bed, by way of a loft conversion puts allot more that a mere 12% on the value. Its more like 20 to 30% if done well. The housing market seems flat now, but from all the reports I can't tell if its tits up, tits down, or a dead heat in a zeppelin race! How about mass disobedience and everyone stops paying their mortgages....they couldn't evict the whole population, or could they?

[Mark White]

Mango wrote:
"Invest in your local community by buying into the property market, and you will then be a contributing member of society rather than a social parasite living under the roof of someone who has been prepared to invest in the future."

I've been reading these "Have your say" newspaper message boards for a couple of years now, and I think I can confidently state that your comment is the dumbest thing I have ever read.

So you are saying that people who can't afford to buy houses are parasites, whilst property investors are no doubt fine upstanding individuals contributing to society?

I assume you are a child. Make a copy of what you have written and take it into school on Monday to show to your teacher. They can explain to you what a fool you are.

[Sue in Spain]

Expat Brit - you really need to engage your brain begfore you commit your thoughts to print.

"When will people realise that working hard and investing in your own future is not a social crime, but something we all should aspire to," says you.

Really? Aspire to borrowing nine times our income so that we can play along with your little game? Aspire to record levels of personal debt so that we can all pretend to be wealthy?

"Invest in your local community by buying into the property market," says you.

Tell me, how does that benefit a local community, driving up prices to levels where key workers can no longer afford to live in those communities? Or where youngsters no longer afford homes where they are from?

My guess is you live in a rabbit hutch in Torre or are one of those poor souls living the dream in rural Bulgaria.

[mango]

Since only a moron would sell his/her house below what he paid for it, there will be no substantial fall in prices. There is slack in the market and sellers in a hurry can afford to knock the odd ten percent off, having made a fifty percent or more gain over the last few years. Very few people ever NEED to sell up, in most cases we can all sit happily on our nest eggs waiting for a time and price that suits us. Looking at many of these posts it is clear that the politics of envy have been truly kept alive by the Euro-socialist regime. When will people realise that working hard and investing in your own future is not a social crime, but something we all should aspire to. Invest in your local community by buying into the property market, and you will then be a contributing member of society rather than a social parasite living under the roof of someone who has been prepared to invest in the future.

[expat Brit]

Want to get a £1 million house today for just £200,000? Then do what I did, come to the Philippines (an English-speaking country) and buy a brand-new, American-style detached range home (5 beds, 7 baths, 2-car garage, 3 floors, attic room, driver's room, maid's room, 2 living rooms, dining room, 2 kitchens, etc.) in an upscale gated enclave in the outskirts of Manila for £200,000 only. This is a house which would cost you a cool million in the Home Counties. By the way, in the Philippines not only do all people speak good English and are friendly and pleasant people, the weather is 25-30 C all year round and the general cost of living is 20-30% of the UK, depending on what you're buying. Crime is virtually non-existent, this being a Catholic country with very strong family values. Hospitals are some of the best in the world here, with most doctors trained in the USA. Of course, slums and poverty exist here, but as a foreigner you can separate yourself from that completely. I recommend you check out the Philippines to buy a second home or retirement property. Forget other places like Thailand, Malaysia, Indonesia, which are more dangerous, unwelcoming to westerners, too hot/humid and have impenetrable languages. Buy in the Philippines! It's dirt-cheap, safe and lovely! I'm 37 years old only, but I just went into semi-retirement over here. Brittany Corporation (http://www.brittany.com.ph/)is a great developer to buy your Filipino dream home from. No recession or housing market crash over here!!!

[kev]

Read some good – and crazy stuff here. Wanna know what you should know about yourselves? Then don’t read on…

Supply and demand Dave –

You miss several points! Demand for housing is indeed a function of the money that those who will live in it can afford to pay or are willing to pay. In Bangladesh the average wage is £170 a year – less than a day’s cost for a Polish plumber in London. Something tells me this massive disparity may be the real reason why their house prices aren’t higher than ours!

Pitythefool – now there is a comment that hits the nail on the head! But we need to look beyond the onset of the current crunch - as soon as the banks (psychologically and financially) can they will be loaning more in order to be competitive so to raise their profits. I am not saying it will be at the rate of the last couple of years – but it will not be like the next couple.

Schaden Fraud – in your dreams (aka, get a life)

Jim – love it! “My god our society is ugly and this article and discussion holds a mirror up to it.” – you then go on to stand in front of it naked with bile ridden comments such as; repulses me- decaying society- most evil, rampant- ashamed to be English- see her suffer (repeated half a dozen times)- parasite attached to me- I wish him every ill - I hope…suffer financial bankruptcy. Ugly!

Luke – you have it right of course. Though most people (as Phill Barlow says) treat their house as a home (whether they want to or not) often because they are wage slaves with families attached to local schools etc.

John and Brian Herren – you have it right, follow their advice! Simon – I hope you are wrong, but you probably aren’t

[Giuzeppe]

Rarely read so much tosh in my life. And the bitterness is shocking. Never thought so many pseudo economists read The Times. For those advocating renting in favour of owning ... where do they rent from if not BTL landlords?

[jayner]

I thought banks were in business to lend money and borrow a multiple of it. How long can they go on forcing/keeping borrowers away?

[James Smith]

There are some really idiotic people here. I don't think any of us should be celebrating possible economic slowdown or recession. Recession will not only result in homeowners losing their homes but those living in rented accommodation will face the same problem.

- Who do you think owns the flat you are renting and what will happen when it is repossessed?

- What will happen to pensioners already stretched? Do you want them to end up living in a cardboard box too? Not bad enough that they cannot afford to heat their homes they should now lose them as well.

Jobs will be probably be lost and more people will have to survive on benefits - this is hardly something to cheer. Even if prices drop dramatically the lack of credit will affect the ability to arrange a mortgage or any other loan for that matter. Remember the source of this problem is that the banks are now too afraid to loan money so we will all lose out in the long term.

Those of you who are desperate to see a recession to get on the property ladder need to think again about your own greed-ridden motives.

[JL]

Advise owners to sell up and rent en masse, and you'll accelarate any price downturn and send rental figures spiralling as landlords from the hideous buy-to-let phenomenon (responsible for the inflated market today) cash in on high demand.
PS economics is not mathematical, it has no certainties. It's simply based on cynical game theory, which has been discredited as a practical model by its very own creator, who now says it doesn't account for the irrationality of people.

[Harold Armitage]

Ah....How to get on the ladder, that is the question. I feel sorry for first time buyers.
There IS a solution, you never hear it mentioned. That is, you build your own house.
That is REALLY BUILD IT with your own two hands. There are various ways of going about this and as to the how, the information is all out there, in the library, on the internet. Yes it takes time, especially part time.
But lets face it, most people are just too idle.

[Paul]

Why do "experts" not expect prices to fall in London and the South East? Do they think the area is immune? Judging by the redundancies to come in the financial sector, not to mention the bonuses dissappearing, where do they think the money for the inflated prices will come from? It may take a little longer but London prices will come down by probably more than the rest of the country no matter how many of the "experts" try to talk them up. They probaly live in the area so have a vested interest.