20 reasons to cheer falling house prices

Thousands of pounds may be wiped off the value of your home as you read this, but property market crashes are not all bad.  Here are 20 reasons not to be too downhearted about the downturn...

1. First-time buyers benefit. Falling prices make housing more affordable for first-time buyers, as long as they can save up a deposit.

2. First-time buyers benefit II. Falling prices make housing more affordable for first-time buyers, as long as rich buy-to-let investors do not get there first.

3. We can return to sanity. No more misguided beliefs that property is the sole route to fortune, that houses are like bank accounts and that as long as we have a couple of buy-to-lets and a three-bed in a good location, we won't need a pension or savings account. Time to invest elsewhere.

4. No more fear of the unknown. When prices were rising, we were plagued by niggling feelings that it all looked too good to be true and that the market must be due for a fall. Now the fall is happening, we are at last free from this paranoia... until prices start to rise again.

5. Divorce rates could go down. Property market experts say that declining prices mean harried couples are more inclined to stay together. Lucian Cook, of Savills Research, said: “As house prices rise, home-owners feel wealthier and our supposition is that they also feel able to afford to get divorced,” he said. “We forecast that the falls in property prices, unwelcome for the majority, will result in fewer divorces.”

6. It's easier to add value. Instead of feeling constant pressure to upgrade to a new house, you can concentrate on adding to your existing one. Turn your attention to building an extra room, re-fitting the kitchen or landscaping the garden. Then sit back and enjoy the fruits of your labours.

7. More bargaining power for buyers. If you do want to buy, you have more bargaining power. Use it to push sellers to reduce the price, but steer clear of gazundering - it's bad manners.

8. Survival of the fittest - and nicest. Only the best and strongest estate agents and mortgage brokers will survive. "This will sort out the wheat from the chaff" said one industry insider "all those outfits that jump on the bandwagon when the going is good won't survive, leaving only the good quality guys," which is some reassurance.

9. House price falls are not actually that bad in some areas. For instance, prices have been falling month on month everywhere, but annual house price measures show that property in Greater London or the Isle of Man has still not fallen below what it was worth one year ago. Some experts say that even homeowners in areas that have suffered the biggest declines, such as the East Midlands, should not fret, because they are unlikely to fall much further and could be the first areas to stage a recovery. Everthing is relative.

10. Fewer annoying adverts. You will see fewer advertisements featuring annoying perma-tanned property moguls selling "how to become a millionaire overnight, like me" seminars.

11. A lower tax burden. If a fall in your property price brings the value of your estate to below £312,000, you could escape Inheritance Tax. Even if it is still above the threshold, a fall in value could still reduce your overall liability.

12. Less of Jose Luis Hernandez. You will see fewer advertisements by Polaris World.

13. You can move up the ladder for less. Is now the time to snare a bigger pad?

14.You might pay less stamp duty. If you are buying a property that has fallen in value to below the current stamp duty holiday limit of £175,000, then you won't have to pay the dreaded tax.

15. Less confusion in the mortgage market. There was once a time when the average mortgage borrower had about 5,000 deals to choose from. That figure is in the hundreds now. While still daunting, it does make life easier.

16. Less inappropriate lending. Those 125 per cent loans seemed like such a good idea at the time, but now of course, we are all thankful that temptation has been taken from us and we have to go back to good old-fashioned deposit saving. 

17. Less chance of future boom and bust. No more over-stretching means no more credit crunches. Hopefully.

18. Less development on the green belt. Housebuilders like Barratts will have to stop buying up huge chunks of land and constructing massive developments on them. There may be a housing shortage, but countryside lovers will surely raise a cheer to this temporary respite for the Green belt.

19. The end of annoying one-issue websites. The harbingers of doom at websites such as www.housepricecrash.co.uk and www.propertysnake.co.uk will have nothing left to warn us about. House price crash? Been there, done that.

20. First-time buyers benefit III. Did we mention that it will make housing more affordable for first-time buyers?

More from Money Central:

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The 10 worst property investments ever

The top ten university towns to buy property

Ten tips to negoiate a 10 per cent pay rise

The 10 most decadent dictators ever

County by county: completion prices vs asking prices

The 10 home improvements that will add the most value

50 great things you can get free

50 tips to beat a recession

The 10 most infamous heists ever

25 reasons to avoid the new iPhone

The 10 craziest parking tickets ever

The 10 most ridiculous fines of all time

Ten tips to survive a property downturn

The 10 biggest stock market crashes of all time

Comments

[KEN SANTI]

Its about time house prices fell in this country, for say 175,000 you could buy a substansial home set in a couple of acres on the continent but here in the UK only a semi if you're lucky!!
Don't forget prices have been artificialy inflated by greedy estate agents and banks when money was easy to borrow, now everyone in the finance industry is paying the price for their greed!!!

[Alex DM]

Housepricecrash.co.uk is great website. I have been following it for almost 3 years and they have been spot on.
Thanks to the information provided in their pages I learned of many things ... Including information about property auctions in this country. Just this month I have bought my first property at an auction for a knockout price compared with prices paid prior to August 2007.

when is Kirsty Allsopp going to eat her hat? It will be fun to watch.

[Alex DM]

Housepricecrash.co.uk is great website. I have been following it for almost 3 years and they have been spot on.
Thanks to the information provided in their pages I learned of many things ... Including information about property auctions in this country. Just this month I have bought my first property at an auction for a knockout price compared with prices paid prior to August 2007.

when is Kirsty Allsopp going to eat her hat? It will be fun to watch.

[Dave Jobson]

Everyone hates BTL landlords.My tenants are 20 somethings that don't buy cos they are just in town for a year or two. Or they simply aren't interested in buying. Or more interested in spending than saving for deposit. Then there are the Polish who are saving for deposit. My conscience is clear investing in one of life's most basic needs... namely property. However where is your pension ? Arms makers, multi national corps sweatshops & GM food companies no doubt.

[JM]

Lol @ the lower house prices equal unemployment/financial Armageddon. Are these people so deluded or mortgaged to the hilt that they cannot see that high house prices are the cause, and the crash merely an inevitable consequence?

1. Cheaper house are not much use if you have just lost your job
2. Cheaper prices are not much use if you cannot borrow moner for a mortgage
3. Where can you put your savings for retirement ?
4 And just how far will prices fall and for how long ?
5. Money worries will ease dodgy relationship ???
6. See 1 - difficult to invest in your property when you have no job or no savings
7. So where are all these buyers then ???

and so on
utter drivel

[Dennis]

No more boring programmes about house improvement on TV and no more boring dinner party conversations about now much money people have made on their property 'investments' !

[Pedro]

This article has attracted comments for days and days, and understandably so. First time buyers have their point and homeowners have theirs. I think that the saddest thing is that we have such a rollercoaster ride involved with something so crucial to our living.
I've seen friends from uni 'earn' more a year from the houses they bought several years ago than my wage gave me. Now that I've found a steady job somewhere that I want to live long term, with a long term partner and bought a modest home at a modest income multiple with a reasonable deposit (with payments the same as renting) I'm now losing more than I earn a year on the tide going out. Eventually, my colleagues, with similar wages may pay much less for their homes and see the tide carry them up again into large amounts of equity (whilst I'm stuck on the S.V.R) You couldn't design society in a more ridiculous way. It makes hard work insignificant.

[Heather]

I have to say that this article reads as though it was written by a naive 16 year old. Did one of the Times writers leave their laptop unattended at home when the kids were home from school? Anyone who's ever been through a divorce and the joys of having to sell a house/home/property whatever because of the marriage breakup will not be cheering at the thought of lower property prices 'forcing' them to stay together, believe me..

[John Hoffman]

Reading your article made me think of The Life of Brian. I am picturing you nailed to a cross, singing "You have to look on the bright side of life........"

[Darren Ward]

LAURA

"The only situation where you truly can't is where you wouldn't recoup enough to clear the closure amount on the mortgage."

Very true - hence my example, where I would actually OWE 50k to the mortgage lenders. Therefore, it would be a bad move to sell if I needed to for whatever reason, be it personal, financial etc.

I agree with the subletting scenario and in some cases, it is feasible, in others, it is not. If you can't rent the property out at a rate that covers your mortgage payments, then it's not an option.

To be honest, the rental market in this country is blighted by unscrupulous landlords. I speak from experience, having rented and having being told by my landlord that she was selling the property and my rolling contract was not being renewed. What a mess!

My wife and I decided to buy a flat, which, luckily enough more than doubled in value and we sold before the slump.

Everybody has freedom of choice, but, I have instilled into my daughter not to buy and chain herself down with such a financial burden. She moved to Spain and has rented without problem for years.

I don't need to move and can quite happily ride this downturn out. I've done it before and I'll do it again. Next time, I'll sell at the peak and bank my money!

[Laura Roberts]

Darren - People who NEED a home don't have to buy one; it really is that simple.

The aversion to renting in this country, the obsession with home ownership and the ludicrous over-reactive cries of "I'm going to lose everything" which actually means no, it's just you're not going to live in the particular house you invested in and move, that's all, have got everyone into a mess of fear and an exaggerated sense of loss.

My point is, those who say they can't sell their house (for whatever reason they want to), can. If you lose money on it, you can still sell it and accept the loss as anybody else does when they get out of an investment decision that didn't turn out the way they hoped. Why should home ownership be any different? Stop saying you "can't" sell it - you CAN. Out of pocket, in pocket, not as much as you wanted, reduced deposit on the next place, etc etc... The only situation where you truly can't is where you wouldn't recoup enough to clear the closure amount on the mortgage.

The bottom line is we have choice. If you have negative equity and have this urgent need to move, sub let and rent then. If you have to move and you will lose some of the deposit you put in, that was the downside risk you fully consciously took, as you would have taken the upside of increased return on that deposit, so accept it and live with it.

We have got to get away from this premise that losing some money, or not getting what you want is abject catastrophic failure, something that has happened to people. No, it's just the result of your choices and market conditions.

If you weren't able or didn't want to be trapped in a property you didn't want for whatever reason, given a variety of future possible scenarios and factors, then you shouldn't have bought in the first place.

You all had freedom of choice. No bank made you take out that mortgage, or put in that amount of deposit,or made you make the decision to buy and not rent. Egos, financial temporary blindness, I want I want, preference for ownership and debt rather than rental and no debt did. And they're all your choices.

[NO LIE]

SIMON L: the lack of mortgages hasn't brought down the financial system, the collapse of the financial system has caused the lack of mortgages. If your criticism was meant to be serious, perhaps it should also have been factual.

[Darren Ward]

DUNCAN

"sour grapes"?

People who NEED a home have to pay the market value at any given time. It's all right to say "you should have waited - more fool you!" If you can't wait, you can't wait!!!

It's the people who have acquired 125% mortgages or taken 5-6 times salary that have been stupid and not really thought about the consequences. But then again, desperation blurs the mind!

If you've managed to rent and save a large cash amount, then good for you. You will reap the benefit somewhere down the line. Not everyone is as lucky as you.

It's the gloaters (I'm not saying you are one, Duncan) that get my back up. You can't tar everybody with the same brush.

[Darren Ward]

LAURA

I take it you mean by saying - "There is not a house in the UK that could not be sold at the right price." - that said price should be next to nothing, or at least drastically reduced?

If I had a house worth 200k and it fell in value to 100k and say I'd put in a respectable 50k deposit - then I'm 50k out of pocket if I sell. Therefore I am not going to sell. Also, I certainly wouldn't be able to trade up to that 300k property that is now only worth 150k. I might be able to afford the mortgage needed to buy it, but I wouldn't get the mortgage because I wouldn't have the deposit that the banks are demanding.

I suspect this will be the "norm" in many cases and the amount of properties on the market will fall drastically.

The "bargain" houses will be the ones that have been repossessed. You're just replacing people who've been made homeless with first time buyers or even the greedy property investors. Not everybody who loses their home has done so through overstretching themselves - other factors such as the ridiculous cost of living (energy etc.) may have had some bearing.

I am not against lower house prices and agree that first time buyers need to get onto the property ladder to stimulate a slow, sustained growth and not the insanity we've seen recently! Let's face it, why rent and put money into someone else's pocket when that money could go into your own property?

If the properties fall too much combined with all the other factors coming into play, such as unemployment, then it matters not, because very few people will be able to buy and when things stabilize and more buyers come onto the market, then the whole thing starts again.

[duncan]

I've been reading housepricecrash.co.uk for several years now and if it wasn't for the information I got from there I would probably now be the owner of a smaller than I would like house in a bad area and heap of negative equity instead i am renting and have a large sum of cash in savings. When i first came accross the site it was a single issue entity but it spured me to investigate and I quickly saw that the hype I had been seeing was in the mainstream media was just that, hype. I could see a crash was round the corner and managed to avoid making a major mistake. I'm now ready to buy when the market hits the bottom which will probably happen late next year when the financials stabalise and the money starts to flow again, theres another prediction... i expect to save between 30 and 50% and should with my savings be able to get somewhere quite nice. youo can put the site down all you like but it looks like sour grapes when you were so monumentally wrong and they were spot on.

[janet]

no more of the "boy" from BBC programme"open house"

[Simon L]

Let's guess - from the constant sneering, could the author of this piece be a first time buyer, who hasn't put in the effort to save a deposit, and is jealous of those better off / harder working - those"rich buy-to-let investors"(I say author, as it is more like fiction)???

And I like the piece about the reduced number of mortgaages being a benefit: The one issue that has brought down the financial system worldwide, lost hundreds of thousands of jobs, used up trillions of govt funds that could have been spent on health, roads etc and this clown with no financial understanding suggests that at least its easier to understand!

If this article was meant to be funny, it should have been funnier. If it was meant to be serious, then the Times needs to look at the quality of its writers

[Laura Roberts]

Micah: There's no "I told you so" about it. There is merely the argument that it is fundamentally immoral for one group of people who took a wise investment decision to pay - directly or through the biased policies of an interventionist government - for the unwise investment decisions of others. There's also an element of, as I explicitly stated, "what is the problem"? Unless you absolutely have to sell, there's no problem. So staying put may be not ideal; life rarely is. Get over it.

Darren: your premise is that the buyer market is comprised wholly of those with percentage deposits, mortgages, and those for whom the list you provided is a problem. Mortgages are still being given. There are still buyers out there, there would be more if prices were lowered. There is not a house in the UK that could not be sold at the right price. As for the rest of your post, I don't have anything to say as it had nothing to do with mine. So not all homeowners are pissed off; agreed. So?

[Darren Ward]

"Any house can sell in this market at the right price."

How so? Less mortgages available, stricter criteria, higher percentage of deposit needed.....

Seems to me as if you're talking cr@p!

As for the trading up being easier, well, that may be so if you have a large (or should I say obscene?) amount of equity in your home. If not, your stuck where you are. Anyway, as you doom mongers keep reminding us, "Who'd want to buy/trade up in a falling market?"

I bought recently. A £120,000 home with a £60,000 deposit and a 3 year fix at 5.19%. The bank wanted to put the arrangement fee (£999) on the mortgage, we said no and paid up front.

A good deal, a nice home in a nice area surrounded by countryside and I may just stay here and leave it to my daughter - who knows.

Not all home ownwers are pi**sed off!!

[Sueco in UK]

As useful as those silly emails,
- 20 ways to kill a cat
- 20 reasons women are better than men ,.,.

[Micah]

Laura:

The only thing that's worse than the smugness of the 'property investment' brigade prior to 2007 is the now swollen chests of the 'I told you so' posse of which you seem to be a part.

[Trevor]

Simon:

That must be why so many BTL are getting out:) Leverage works on the way down as well as on the way up.

And you just don't get it. The market will be fine until there are forced sellers...

...losing one's job means a loss of a house whether renting or private, Lets see how many BTL want to lose both capital while ALSO having no one able to afford to rent the 2mn+ BTL properties:) Goodluck lol

[Kara Swart]

Reduced consumerism will lead to lower consumption and therefore lower pollution and lower stress. Recession? Bring it ON!

[Kara Swart]

Don't forget you will get an additional 20% benefit if you had transferred your savings into € and watched the £ fall.

Houses should become homes, not ATM Machines.

[Laura Roberts]

Rob:

1. there has been a strong likelihood of a 3rd runway since 2000. It is impossible you weren't aware of this, 5 years after it was raised as a possibility and being actively discussed all through 2005 when you bought your property.

2. You "listened to the media, government and man on the Clapham omnibus". That was your choice. Many others, including myself, didn't fall for that rubbish.

3. For my decision to not buy, I have incurred sky high rents, the continual threat of end of leases, multiple moves and the lack of permission to knock nails into my walls to hang anything. I don't complain - this was my choice based upon my risk/reward decision. I also incurred the loss -during this time - of any possibility of house price increases and profit gained thereby.

4. For your decision to buy, you had that chance of profit that I didn't have, you could do anything with your home, you get sublet and get tenants in to pay the mortgage (with you, or instead of you if you moved out) etc etc. That was your risk/reward decision.

5. If times were good for you, and your investment decision paid off, you wouldn't be asking "what's in it for me?" or complaining about this government that you supported (and I never have).

6. The market had to plummet, it's all in cycles and we all know that. Including you. None of us knew when it was going to happen, but it was very likely to happen during 2006/7/8/9, You chose to buy just before this, nobody made you. Not even the man on the Clapham omnibus.

7. Your hard work has not been undone, and you've "lost" nothing, unless you now make another decision to sell your investment. Again, this is just another investment decision on your part. If you choose to do that, since you will not recoup what you put in apparently, it would seem unwise. But you have freedom of choice. If you remain in the property, you've lost nothing and you still have a home that you and your mortgage company own.

8. Where's the problem?

[mick]

The 20 reasons why lower house prices benefit didnt include the most important reason. lower mort. costs will make it easier to pay bills, feed the kids, stay warm, have a better life generally because they will have more disposable income after the mort is paid.

[Rob]

What's in it for me? I listened to the media, government and man on the Clapham omnibus that if I didn't save and buy a house I'd never be able to do it.

I worked hard, many a late night at the office, went back to uni to improve my prospects and saved £30k for my 10% deposit. I brought my home and took no delight in it's rising value in 2006 and 2007.

Now all my hard work's been undone and the money I saved for my deposit lost.

To top it all I'm directly under the flightpath for the 3rd runway at Heathrow, something that was not planned when I brought the place in 2005.

I used to be a Labour supporter but it's become obvious they can't be trusted to run the country.

[Tom Franklin]

Pedro: I have a mortgage. I want prices to drop.

Selfishly, I want them to drop so I can move up at less expense like Gareth says.

Non-selfishly. I want them to drop as a society where a tiny, one room only studio flat in central London costs £370k (lower end of the market), is ridiculous and obscene. That only those who inherit wealth, or the elderly can afford them is awful.

Selfishly again, I want them to fall so all the boring oiks who drone on and on and on about how much their house has increased in price will, as Laura Roberts said, just shut up at last. It's not big, it's not clever.

Anybody thinking of buying in the next 2 years is mad, unless you can drive down a desperate seller by 40%. Wait and wait... FTBs do not get on the ladder now or in the next 2 years, wait and watch it plummet. Your time will come, as long as you don't listen to the Chartered Surveyors, the estate agents and the government who are desperately trying to get you into financial trouble to get THEM out of trouble.

Don't fall for it. Rent and watch prices fall.

[Gareth Jones]

Pedro
What a naive comment.
I have a mortgage and want prices to drop so I can move up at less expense. I expect most others with a mortgage feel the same.

[Pedro]

inbreda @ 11:41:52 :-

It may be 'still a home' but if the banks suddenly turn your back on you for the better mortgage deals it can quickly become a millstone (no I'm not 'sub-prime', well, not yet anyhow) There is a lot of hand-wringing glee amongst non-home owners, a lot of 'I told you so'. You're a bit like gamblers who see a die turn up a six and go - 'I told you a six was going to come up'. Remember, we've all been screwed by money lenders, those who bought and those who didn't.

To all you people who are cheering about price falls... one day you'll have a mortgage, praying prices stay steady so you can continue your life as normal.

[Gareth Williams]

If all the banks go bust a lot of people will lose a lot of their money which will be gone forever. Atleast with land it may lose its value but it will still always exist

[Luke]

21, My high street may have some shops again not just wall to wall estate agents

[Alex]

Why are people getting upset and taking the article so seriously?

Bring on the a total crash of all markets and people might get a sense of humour if not perspective.

[Alex]

You missed the most obvious benefit - no more Kirsty and Phil!

[C. Walker]

JOAO, I'm gobsmacked by your comment. So you equate a strong minded woman with violence? Black eyes??

I agree Laura, I wish complaining homeowners would shut up too, and I reckon most people agree and feel just as strongly and we don't all go round punching people, thank you very much Joao.

[Joao]

Neil and James: You are very crazy guys to want to marry this woman!! I can imagine already your black eyes and crying etc. and being every minute told to SHUT UP.

[James]

Neil, not if I get her to marry her first! I love her posts, they're always objective and right to the truth of the matter.

Marry me Laura?

[SK]

I want to see programmes like property ladder and location, location filmed in this market

[Neil]

I think I'm in love

Laura; Will you marry me?

[No pity]

@Pitythefool: Who the hell do you think you are? The blog police? I suggest you leave this message board, invest in some fine Lebanese blonde (or whatever), crank up the Bob M and chill the F out. Same advice to most other posters here...

[PityTheFool]

@ James Loft house - rubbish comment, please don't put trash like that on this message board.

[James Lofthouse]

rubbish article.. didn't take any points from it all

please don't put trash like this on your website

[luke]

housepricecrash saved me from buying a home 2 years ago, the property is still on the market at a lower price now, housepricecrash saved me 45k so far.

[Howard]

Unbelievably, you have not mentioned two of the most important things. First, people wanting to buy a bigger house benefit from lower prices because the gap between the cost of the two houses is reduced and second, every penny spend on a mortgage is money that could be spend on the real economy, so lower prices in the long term benefit the economy.

[david barker]

The posters on HPC were predicting this global meltdown created by the house price bubble. Perhaps more bankers should have visited this site and we might not be in the current mess

[phil]

Think i'll leave the comments to the HPC cranks. Hope you find happiness in your lives while the rest of us get on with ours (and pay off our mortgages). Over and out!

[Joyce]

James, the free market is working as it should, what do socialists have to do with it?

The vested interests are beginning to look quite unstable.

[Tom Howard]

Hmm, HPC correctly predicted the contraction of credit, house price falls, bank collapes, Government bailouts, and the collapse of our Capitalist society as we currently know it. Things will NEVER be the same again, and many commentators in the media have said all of this was UNEXPECTED. I was reading about it YEARS BEFORE IT HAPPENED !!! (If you really want nightmares, visit HPC for the next chapter... now thats doom mongering if ever I saw it !)

[Ad]

Fair point on housepricecrash.co.uk.

Refreshing points-of-view during the boom but sadly now full of embittered underachievers spreading class-envy, whilst arguing over financial concepts they'll never grasp.