[Closed] Are we heading for the biggest housing crash in history?

No.

But welcome to the forum. What bikes do you ride?

An impressive first post!

No

Thanks Scot.

Unfortunately, I don't have a bike.

So what do you think will happen with property prices in the near future?

House prices are never going down and never let anyone talk you into buying Specialized tyres.

Again?

Might be a 1995 stylee correction but not a crash. Too few houses too many buyers.
Remember tubeless is a fad. Like 27.5.

Long term house prices will always go up.

But what is going to happen in the next 1,2 or 3 years will they keep rising? If you think they will please give me your reasons why?

sharkattack, I thought it was Contis? 😀

Hopefully no

House prices won't go down long term as long as the people selling them are controlling the supply!

So what happens when all these buyers don't have the resources to pay for these expensive houses anymore due to businesses collapsing and people losing their jobs. We have just come out of a pandemic with mass money printing which is going to have disastrous effects on economies all over the world.

Please explain to me where all this money will come from?

Tony don't worry too much about the cynicism shown in response to your first post. It's quite normal!

I wrote a similar post (not long after I also rejoined) about how private housing is being concentrated into a smaller number of hands (moderately wealthy people owning more than one property) and this being akin to a re-emergence of a feudal like system.

The baby boomers are dying. They are a very large block of the population and they are thge largst property owning block. As the houses they once lived in become vacant and thus sold, it is possible this will result in a correction.

What may happen however is that the people you would ideally want to have buy the resulting surplus (i.e. first time buyers/millenials buying the houses left over as everyone has finished trading up to the larger baby boomer homes) simply cannot afford them. Instead the relatively wealthy with existing property portfolios leverage these assets to buy more property thus keeping the price high and further disenfranching millenials.

So what happens when all these buyers don’t have the resources to pay for these expensive houses anymore due to businesses collapsing and people losing their jobs. We have just come out of a pandemic with mass money printing which is going to have disastrous effects on economies all over the world.

Please explain to me where all this money will come from?

My long lost Nigerian cousin who has just e-mailed me with a very tempting offer?

Even with rising interest rates if you are a saver or investor the traditional ‘safe’ investment options give derisory returns therefore residential property is one of the few things that for those with surplus cash can put their money into. As the UK is still seen as a destination for laundered money, UK property is also a relatively safe bet for your run-of-the-mill kleptocrat. Also, house builders have no interest in significantly increasing the volume of houses they build when all the Polish builders left and you can make as much money effectively doing nothing. They may be some ‘local’ adjustments as the appeal of city centre living and working loses it’s appeal post-COVID, but demand in other areas for second homes, holiday rentals etc far outstrips supply.

No bike, my word you poor person. You need one or four !

Can you please explain your motivation for posting this question as your first post on a mountain bike focussed forum?

Are you selling somthing, or have some kind of vested interest.

Can you please explain your motivation for posting this question as your first post on a mountain bike focussed forum?

Why is this relevant?

No vested interest in buying properties or being a landlord has this would go against my way of thinking. Sorry for my mistake I will remove my post if you want me to, I didn't realize I have posted in the wrong place.

I didn’t realize I have posted in the wrong place.

You haven't.  This is the chat section of the forum, topics like this are fine.  I must admit though I am a little intrigued as as to why you would join a mountain bike forum specifically to post this, if you don't own a bike? Not having a pop, honest.  Just curious.

No problem thanks you for welcoming me.

I was searching on google for chat forums for housing and this site comes up on the first page.

Supply and demand innit. Demand is outstripping supply in the UK right now so any corrections are unlikely.

27.5 or 29?

I was searching on google for chat forums for housing and this site comes up on the first page

Genuine LOL....peak STW 😂

And in answer to the question, no....at this time demand still outstrips supply and therefore, even with budgets squeezed, in the near term I cant see house prices falling. Might change as the economic damage from covid, bexit and war continues but conditions will have to be much worse and sustained at that level before any significant fall

I am a little intrigued as as to why you would join a mountain bike forum specifically to post this, if you don’t own a bike? Not having a pop, honest. Just curious.

I get that you're not having pop and perhaps the answer is that this is a well established community of people that has evolved so far from it's original focus that it has become something more. It's a testimony to (modern) community that a group of people with only a fleeting connection to a shared interest should register loudly enough in the digital space that it eventually attracts members with no connection to cycling.

What do you think about landlords who are renting their properties? Do you think the way the cost of living is going a lot of people will struggle to pay high rents which may well lead to a lot of landlords folding?

No problem thanks you for welcoming me.

I was searching on google for chat forums for housing and this site comes up on the first page.

Thanks for the answer.  Go STW!  My own view, based on no particular insight or inside knowledge is we will likely see a correction, maybe quite a large one in the next few years. But after that, prices will continue to rise inexorably.  There is still far too little housing stock, and no real signs that will change significantly any time soon.

I understand the demand and supply issue. But what happens when people don't have the resources to pay for these high prices anymore due to the economic downturn?

It's not like it hasn't happened before.

Cost of living crisis aka redistribution from poor to rich means that money is concentrated in fewer hands. Uncertainty in the economy plus buy-to-let bollox means that many investors have become rent seekers. The wealthy can buy up property for their family and screw meveryone else with high rents.

I've just bought a property, paid over the asking, and sincerely hope that prices do fall but I can't see it happening.

It is interesting how when there's a crisis in the middle east or other major events new figures appear on here with well structured, grammatical and accurately spelt statements but who might imagine Mary bars to be somewhere to hang out in Glasgow. Strange.

Feels a bit like wishful thinking on your part do you want a crash?

I still don't think it will happen. The rich are getting richer, the poor, poorer. So the rich will still be able to afford the housing and get the poor to rent and pay their mortgages.

But what happens when people don’t have the resources to pay for these high prices anymore due to the economic downturn?

The risk is not that there won't be enough buyers, the risk is that there will be fewer buyers but still enough to compete and keep prices high. Economic hardship is usually an opportunity for those that survive to thrive; it's what causes the Gini co-effecient to increase. This is my theory and I'm not an economist. My (very smart) economist best friend however does indeed firmly believe that we are headed for an almight house price correction (she runs a very successful Private Equity fund and is so paid on her ability to, at some level, predict long run macro-economnic trends!)

A housing correction combined with falling real incomes and raised interest rates will just mean the rich can buy more of them.

I was searching on google for chat forums for housing and this site comes up on the first page

Yet some how you completely missed this is a mountain bike magazine forum?

Very odd that google would come up with here if you had no interest in biking.

Thanks for the clarification Tony, and apologies for my initial scepticism.

In a more considered reply, I thought my first house was expensive when I purchased it in 1999. A little worried about negative equity then, but there's been nothing but price inflation since then. I can't see sellers accepting lower prices, (apart from the odd stress sale) they'll just take longer to sell.

And when I searched for forums for housing I got the likes of
Forums - House Price Crash https://www.housepricecrash.co.uk › forum
House prices and the economy. This is the main discussion forum where you can have your say about house prices and the economy.

The threads are eerily similar to STW, they even have a 6,000 page Brexit thread.

Seems like a better hit than this forum, which didn't come up in the search AT ALL.

Do you _Scoff those tea cakes?

A lot of people out there with what I would consider spectacularly large mortgages , and interest rates can only go 1 way . I think there will certainly be a drop in prices , I'm just not sure how soon or how dramatic it will be .

The optimal number of houses to own is n+1

House prices will continue to rise in places like the Lake District where demand will always outstrip supply.

Yet some how you completely missed this is a mountain bike magazine forum?

Easily done if you aren’t a longtermer. A scan down the forum overview and it’s more Mumsnet than Singletrack.

It certainly has the feel of an overheated market. I earn well over the national average and way above the local average, decent amount of savings, ~50% equity in my fairly modest 2 bed terrace.

To upgrade to something bigger in my town would involve taking on a huge amount of debt. 3/4 terraces are 400k+, something detached starts at 500k and yet anything that comes on the market has 20-30 viewings and is sold over asking in days.

I don’t know who’s buying them but there is no shortage of them.

I think Betteridge considered this question - and answered it - some time ago.

https://en.wikipedia.org/wiki/Betteridg e's_law_of_headlines

A crash wont happen because:
a) Lending criteria has been tightened up, so people arnt overstreached
b) it goes across every government policy for the past 30 years

But there are a lot of indicators that the next recession is on its way though:
a) inflation is rising at an alarming rate, especially on essentials (food, fuel, utilities)
b) interest rates will continue to rise across this year

Both of these will continue to squeeze household budgets, which will lead to reduced demand for non essentials, which will start to impact on employment and that cycle continues.

Don't worry about UK house prices, just be thankful you've been sent to create economic collapse here rather than to the front line. 😃

For what it's worth I found this site when searching for how to deal with mice in the loft

Possibly. Nothing stays the same from a macro window.

We are almost certainly heading towards recession (nearly there early 2020). The contraction and expansion of the economy was a dead duck waiting to happen.

Tories will do anything to keep the asset class alive. But the BoE is stuck with very few tools as the current economic model fails.

Free-market capitalism is on life support.

Whichever government wants to succeed they must start adjusting the current circumstances. But no evidence of big spending taking place - so not good in my book.