The housing market has CRASHED - can prices fall by 40%?

Question

I just had to wipe 25% off my 500k house to sell IN LONDON... sold for 371,000 on friday 25th.

Be in no doubt that the market HAS CRASHED as Kinley reported a 9% fall across south london in past 2 months... how low will it go?

Answer 1

Hopefully a long time - everyone who has bought overpriced property over the last ten years & mortgaged themselves to the hilt have been the architects of this situation - with a bit of luck, house prices should halve so that first time buyers could have a chance.

Answer 2

Nobody was complaining when they went up by 40% over the last 2 yrs

Answer 3

Nobody knows just how low it will go, depends on the market which will have to be people who can actually afford what they are buying/have a deposit as its credit/debt/rising interest rates thats caused the problem - prices in Scotland havent dropped that much because no-one paid so stupidly high (although they have doubled over the last few years) for a small property BUT the market here has almost came to a standstill instead, so people arent able to sell, as no one can now afford (especially with the rising fuel and food costs here) to pay for a new home.

Anyway, a break in the market will allow new buyers and those on a minimum to average wage onto the market, as long as they have saved a deposit, the banks are still getting their cut through higher interest rates rather than low interest on massive morgages.  Once we see some more people being able to 'climb the property ladder' it will start to push the market back up.

Its happened before and it will happen again, it has its ups and its downs and you just have to take the rough with the smooth.

Its all relative anyway, you will now get your next property cheaper too.

Answer 4

Dont think anyone can tell you that and informed guesses' by experts have a habit of being wrong.

A number of years back - as you will see from the figures - i bought a new Bungalow and put my existing house out on rent. At the time, the house would have sold for £78-£80k. Three years later I sold it - for £46k !!!!!  (In one way you could say that i did not make a loss as i had originally bought it at £28k - but it depends upon your perception).

Where I live, a year ago houses' would sell within 6-8 weeks. now there are hundreds that have had for sale boards up for 6 months or more and keep getting 'Revised Price' notices over their Estate Agents listings.

The plain truth is that for a long time now houses' have been grossly over valued in relation to salary's and now, the most important buyers of all, the first time buyers, have been virtually forced out of the market.  I think that we are going to see a continuation of the down turn for quite some time yet.

In the country area I live in a new 2 bed Townhouse costs around 10-11 times the average local income!  Many moons ago when I bought my first house, a 3 bed semi, it cost me 4 times my gross annual income!

Answer 5

How much did you pay for the house? If it was less than £371,000 then what's the problem.

Surely with falling house prices, it is good for first timers, prices of homes are ridiculous, I was very lucky I bought mine in November 2007 for £65,500 (single person).

I looked on nethouseprices and the bloke only paid £37,000 for it in Feburary 2006.

Answer 6

The problem is mortgages.

Answer 7

You poor thing...owning a 500K house.

Answer 8

We bought our house in Oxfordshire for £165K five years ago.  Houses are still being marketed around the £200K region, but are forecast to fall back to the 2003 level by the doom pundits.

In any capital city property prices show rises and falls far more quickly than the rest of the market.   It's hard lines if you bought property as an investment, but the thing to realise is that if you have had to lower your price to sell in London, then so will everyone else.  It's a matter of sitting tight and riding out the storm, I'm afraid.

I did see a nice stone cottage for sale on a Greek island for around £7K; with what you've got you could buy that, invest the rest, live the life of Riley and still have a good income!

:-)

Answer 9

I'm sorry for your loss.