Viewing 40 posts - 1 through 40 (of 41 total)
  • Property prices and recession (middle-class track world class content)
  • Premier Icon cynic-al
    Full Member

    I have a place I could sell or let in an Edinburgh property hotspot – places going for up to 50% over valuation. I have some psychological baggage about it and would quite like to sell it and walk away, but that might change and it also might be a good investment. (I’d prefer to invest the money ethically all other things being equal tho).

    Any thoughts on whether a property crash is likely in the next year?

    Premier Icon Nobeerinthefridge
    Free Member

    No chance. Sell and move on.

    Premier Icon Ro5ey
    Free Member

    You know the answer yourself …. No there is not

    But if the “baggage” really is too much, get rid ….. just don’t look at what it’s worth in 25 years time

    Good luck.

    Premier Icon dangeourbrain
    Full Member

    Any thoughts on whether a property crash is likely in the next year?

    One has been due for a long long time, its not happened though and won’t in my life time.

    Remember 2008, that was a big property crash and the result was average prices only went up by an amount similar to inflation. That year.

    Premier Icon nickjb
    Free Member

    Some people have been predicting a crash is just about to happen for at least 10 years and prices have kept on going up. I can’t see much changing anytime soon. There is a massive housing shortage, building work has been stalled by covid and the cost of building has gone up quite a lot. Long term even if there is a crash prices will recover, its a pretty safe investment if you aren’t stretching your finances. Also it can be an ethical investment, you don’t have to be a slum landlord.

    Premier Icon Dickyboy
    Full Member

    Property crash will only happen if cheap credit vanishes & the chances of that now we are so wedded to it are slim to nothing.

    Premier Icon the-muffin-man
    Full Member

    If you are happy with the money you would get for it now then just sell it.

    Especially if it carries baggage you’d rather offload.

    Premier Icon matt_outandabout
    Full Member

    It’s all about how much you can borrow, for not a lot.

    It’s not about house prices any more.

    Premier Icon footflaps
    Full Member

    Some people have been predicting a crash is just about to happen for at least 10 years and prices have kept on going up.

    Only 10? Some people on here have been saying that for much longer!

    Premier Icon blokeuptheroad
    Free Member

    If it’s not your main home don’t forget you will get spanked for capital gains tax if when you sell, the value has gone up significantly since you bought/inherited/acquired it. Unless CGT rules are different in Scotland?

    Premier Icon wonkey_donkey
    Full Member

    Only 10? Some people on here have been saying that for much

    Pretty sure when we bought our first house 20 years ago it was at the height of the market and a crash was coming!

    Premier Icon tonyd
    Free Member

    I was convinced that prices must come down back in 2008, and still think they should have done. What I wasn’t aware of at the time was that our national obsession with ever increasing house prices would win over and we’d bankrupt the country supporting them via the banks.

    While I still think prices need to drop a lot to something more inline with earnings and not fantasy borrowing, I think we are too far down the rabbit hole now. If “they” wouldn’t let it happen in 2008 there’s no chance it’ll happen now or any time soon.

    My completely uneducated opinion is that “they” will try to inflate the debt away, hopefully not Weimar stylee. If I’m right (and I’m probably not) then if you do sell, buy something else rather than leave the money in the bank!

    Premier Icon 5plusn8
    Free Member

    Since 1996 everyone I know who has sold and waited for the drop has found the sum of money they got is now worth much less against property and they can only afford something smaller than they sold. 1999 dot com crash, 2007, 2014, all came and went without any remarkable or long terms drops in value.
    Especially in edinburgh, house prices will never drop there.

    Premier Icon tjagain
    Full Member

    (I’d prefer to invest the money ethically all other things being equal tho).

    If yo are providing someone with a quality home at a reasonable price then I do not see the ethical problem. Of course if you provide the minimum and charge the maximum then thats a different issue. the flat I rent out is kitted out to a very high standard including high standards of insulation and let at 80% of market rent. I have put £12000 cash and £10 000 of labour into it over the last few years. You cannot solve the UKs mucked up housing market on your own

    I really do not see a significant price crash in Edinburgh. It might stagnate but drop – I doubt it

    Premier Icon Daffy
    Full Member

    Rent it out – get a managed letting firm to do it and try and put it out of your mind.

    Premier Icon brads
    Free Member

    50% over valuations??

    New one on me.
    I’d bite anyone’s hand off that wanted a property that much.
    Where in Edinburgh is this place. ?

    Premier Icon Nobeerinthefridge
    Free Member

    House round corner from me went 30% above, and I’m only in lowly prestwick, 50% isn’t beyond the realms.

    Premier Icon the-muffin-man
    Full Member

    Longest crash/flattening I can remember was in the early 90’s – we bought our first home in 1990 for £52k and sold it seven years later for £53k! 🙂

    Premier Icon johndoh
    Free Member

    Longest crash/flattening I can remember was in the early 90’s – we bought our first home in 1990 for £52k and sold it seven years later for £53k!

    Yeah, prices were pretty stagnant around that time. I bought my first house in 1995 for £42,500 and for the first four or five years the price barely changed then they started to shoot up. I sold in 2002 for £115k when I realised what was happening to the market and moved to a bigger place whist I could still afford to. Identical houses on that street now sell for £250,000.

    Premier Icon rone
    Free Member

    Agree with most of the above.

    The benefit of a house crash would hopefully be the beginning of the end for the Tories. Which is why they will fight tooth and nail to prevent it. The conditions just aren’t here though.

    And poor young’uns might be able to get on the ladder a bit easier.

    Premier Icon Nobeerinthefridge
    Free Member

    the-muffin-man
    Full Member
    Longest crash/flattening I can remember was in the early 90’s – we bought our first home in 1990 for £52k and sold it seven years later for £53k! 🙂

    Very much dependant on area. We bought a new house in 2006 for 128k, sold 7 months later for 141k, prices have never reached 141 again in that estate since.

    Premier Icon cynic-al
    Full Member

    Thanks all.


    @nobeerinthefridge
    why no?


    @Dickyboy
    isn’t there talk of inflation? I know Bojo et all will probs do everything they can to retain power but they have to start paying for COVID sometime…


    @the-muffin-man
    that is tempting but I also might want to get past the baggage


    @rone
    I agree but the market should be all rental rather than a house being an investment. It’s a Ponzi!


    @brads
    Joppa

    Premier Icon trail_rat
    Free Member

    agree but the market should be all rental rather than a house being an investment. It’s a Ponzi!

    Rent from who….the ruling class ? Or worse still the government ?

    If you think house prices are bad you should see what you get for a rental. When we bought 12 years ago we halved our out goings and doubled our house
    and garden size . Even locally where house demand is wway down…..this is still pretty normal.

    I’d rent it through an agency my self.

    Premier Icon BoardinBob
    Full Member

    Remember 2008, that was a big property crash and the result was average prices only went up by an amount similar to inflation. That yea

    Hmmm. Bought a flat in May 2007 for £165k. A couple of years later the same flats were selling for £95k. Took until 2019 until I got back to what I paid. I reckon that’s a fairly big crash.

    Premier Icon tjagain
    Full Member

    The various”property crashes” were IMO very regional and price bracket dependent some places did see huge drops from a very overheated market.

    round here ( leith Edinburgh) there was no drops at all – a year or two of small or no rises then stupid price inflation again

    Premier Icon nuke
    Full Member

    And poor young’uns might be able to get on the ladder a bit easier.

    I like the idea of this but i just don’t think it’ll happen as if prices dropped, it would in all likelihood be as a result of recession/economic downturn of which the young uns are most likely impacted so wouldn’t likely be the first in line at the estate agents

    Property crash will only happen if cheap credit vanishes & the chances of that now we are so wedded to it are slim to nothing.

    ^^°agreed

    Premier Icon tjagain
    Full Member

    Or worse still the government ?

    State rentals are the cheapest form of housing and before the thatcher sell of also of high quality housing

    Premier Icon Inbred456
    Free Member

    Sell it and buy something on the coast.

    Premier Icon oldtennisshoes
    Full Member

    Sell it and buy something on the coast.

    Joppa is on the coast (ish).

    Premier Icon trail_rat
    Free Member

    State rentals are the cheapest form of housing and before the thatcher sell of also of high quality housing

    Ah yes you get placed where your told rather than where you want/need to be….. If there is space.

    Other wise your hung out to dry.

    Premier Icon tjagain
    Full Member

    not pre the selloff of all the quality housing. Thats just not how it worked back in the post war years up to the selloffs.

    Premier Icon trail_rat
    Free Member

    Indeed but with the best rose tinted specs in the world…..those days have gone.

    I wouldn’t trust the roof over my head to the current flavour of politics…..either side .

    Premier Icon intheborders
    Free Member

    Longest crash/flattening I can remember was in the early 90’s – we bought our first home in 1990 for £52k and sold it seven years later for £53k!

    Same for me, bought in 1989 for £42k, sold in 1999 for £47k – price dipped below purcahse price through the early 90’s.

    New house though. Just looking on RIghtmove and I’d guess £250k now.

    But that is the only time in my house buying lifetime – first bought in 1986.

    Premier Icon greentricky
    Free Member

    I think it can be very location dependent, where I live had the same value in 2019 as 2009 and only the Covid bounce has created any appreciation on it in the last decade

    Premier Icon Dickyboy
    Full Member

    @cynic-al check out the historical bank of england base rates, they haven’t been above 1% since 2009. Previous to that they hovered around 5% for 17yrs. Prior to 1992 they were around 10% and more for 20+ years. If the base rate went back to 5% most non fixed mortgagees would be truely ****** & so would the economy, gov won’t allow it to happen, might get some slow creep but nothing drastic.

    Premier Icon footflaps
    Full Member

    If the base rate went back to 5% most non fixed mortgagees would be truely ******

    Since 2014 the BoE had mandated that mortgage affordability tests include a rise of 3% in base rates, so 5% wouldn’t be the total disaster you’d expect.

    Premier Icon 5plusn8
    Free Member

    If you look at APR actually paid the average is something like 5.2% since 1999, when base rate goes down the mort companies put their margins up. The amount people pay has not varied by much.
    In 2003 you could get 0.25-0.5 above base, base was 5%ish.
    When it went down to less than 1% the margins became 3-4% above base .
    (Note true APR includes fees etc – eg your typical 2 year fix seems amazing at 1.95% or something, but often has a naff off fee which bumps up the true APR).
    These days with base at 0.1% imaging getting a 0.5% above base rate deal?? Never happen.

    To me the market is nowhere near as unstable as you think.

    Premier Icon footflaps
    Full Member

    To me the market is nowhere near as unstable as you think.

    +1

    You can read the BoE’s most recent summary here:

    https://www.bankofengland.co.uk/financial-stability-report/2020/december-2020#S4_The_UK_mortgage_market

    Premier Icon Marin
    Free Member

    Rent it bank the cash and have a long think for what the rental or sale cash can do for your life. Just don’t come back pretending to be an accidental or nice landlord we’re all in it for the money.

    Premier Icon Nobeerinthefridge
    Free Member

    @cynical why no? There’s been a worldwide recession, and a pandemic, and the housing market hasn’t collapsed.

    Oh, and what Terry says, bollocks to renting.

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