How far do people really think house prices are going to crash....

I wish I knew the answer to this question myself, would help us make a few decision at the moment.

reading in the local newspaper today, it says that as house prices have fallen and are still falling and its more difficult to get a mortgage sorted, the rental market is picking up and likely to go bonkers.

If theyre right, Id keep the house and rent it back out again, ride it out.

Going by my own experience here but i'd try to ride it out if possible. We have 2 houses at the minute. Last year (June 2007) house A was worth £148,000 I have dropped the price to £137950 and there is still little interest. it's not because it's not worth it - but there is no movement here at all. I can afford to drop anymore than this as I had 100% mortgage on it.

So my other option is to rent out. Which is what we'll end up doing I think.

Problem is that I don't want to stay in rented forever, we have a young family and I would like a "proper" family home at some point. It does seem sensible to rent it out again but i could do without the hassles of repairs from tennants etc. I am also worried that we will at some point need to sell it again and by then it could have fallen much more than it has now. What to do what to do... Thanks for your replies....

I rent a flat and am planning on riding it out. My tennants were originally looking to buy but although prices are falling mortgages are also much harder to get approved so they've decided to stay put for another 6 months.

I personally think you'd be better to see things through if you can.

Whats the rental market like a you going to be able to get new tennants? As the credit crunch hits harder and people find it difficult to both sell and remortgage there could well end up with a glut of houses available to rent therefore pushing rental market prices down. I'd sell especially if your renting and have equitity in the property at the moment, you can then buy a family home in the downturn. IMO is going to get a hell of a lot worse before it gets better.

It all depends on what's happening in the funding market but we have a vicious circle at the moment - house prices going down caused by more stringent lending (and appropriately risk priced), which causes lenders to make their criteria more strict and so on...

I know of a couple of sizeable house builders who haven't sold a new build property in the last month. Front page of the Independent today confirmed what I've been told recently.

I hope the rental market does pick up. There are several places for sale in our village, and we're desperate for a bigger place (to rent). We were offered one last month as the house hadn't sold, but the vendors/landlords then accepted an offer on it and didn;t bother to tell us (it's sold STC on rightmove since last week, but still nothing from them, so it doesn't sound like they'd be great landlords?). Our trouble is we want a longish term rent (3-4 years) while I'm at Uni, but vendors just want to rent out until the market picks up. If that happens in 6 months, we're screwed (though I appreciate that it would be better for alot of you!)

Thanks everyone...

It should rent out again easily, it's in good catchment area, stones throw from getting into the City and the airports...That is a very good point about a glut of properties though, thank you! The thing I am really worried about is that we make a loss (very small) each month in terms of rental income covering the rent on this place and if it goes down and we sell it at a huge loss, I know this is going to affect any future property that we buy, I realise it's all relative though. If we accept the offer, the chain is quite far progressed so I know this counts for something, it's just that we have made stupid decisions with property before and I am scared of not being on the ladder...

I don't know about London, but oop north round here we are telling vendors that prices are dropping like mad because they really are - if your agent's on a commission they would get more if they got you more. it sounds to me like they're being honest because otherwise they'd hold out a few weeks and get more money off you! and we're getting a lot of offers round here between 50-75% of asking price, then these smarty-pants investors who put them in can't work out why no-one's accepting.

problem is, vendors understandably don't want to drop too far, but then they ask why they should bother dropping the £10k we advised because they didn't get any further interest when they dropped £2k... tbh you're often better off dropping in one go than in little chunks because anyone watching certain houses will get over excited at a £10k drop (or more, proportionally) whereas no-one gives a monkey's uncle about £2k. The lady that cracked me up recently though was the one who complained we hadn't made a massive fuss that she'd put her price down by £50. Yes, that's fifty pounds. Although not as good as the man who rang to tell me his house had no kerb appeal, and his garden was a mess ?

sorry, i digress, as you can see.

That made me laugh Moomoo, thank you!

Thanks everyone for all your replies, it's just so nice to get a different perspective on things. I also know how lucky we are to be in such a position, hope my post hasn't annoyed anyone. Things have to come down round here though, we are now renting a 3-bed semi with a postage stamp garden, and it was valued recently at £700,000!! Think we are coming round to a decision to sell it and keep our fingers crossed that we are doing the right thing for once...

It's so difficult to know what to do isn't it? We've got a great little house but it is a bit, erm, liittle for the two of us (was okay with just me in it).

We've seen a fantastic house we'd like to buy that really would mean we wouldn't have to move again unless we wanted to so we're on the market to see if by some strange miracle we can sell in time to pick that one up.

But then, if the housing market was going to crash / drop further, we'd be better of waiting for a bit because the gap between houses comes down too and it's easier to trade up.

I think as it is we're just going to see what happens. If we do happen to sell in time to get that one, we'll go ahead as we love it. If it goes before we can sell, we'll take ourselves off the market and wait a bit.

I d say do what your circumstances and your finances dictate. youre never going to call the top or bottom of any market, so its not wise to try to second guess. the only certainty at the moment is that if you are off the ladder, getting back on it (if you need to borrow) is extremely difficult. i was talking to a mortgage broker friend recently and he said that even those with 30% equity (as an example) were struggling not only to get reasonable rates, but to get any kind of multiple at all.

the short answer is that no one can really advise you without knowing all of your circumstances. however, it seems "unusual" to me to own a house which sounds like its not difficult to get tenants for, but still, youre renting the place youre living in? i m not sure of the logic behind that really, though i m sure theres a logical explanation.

It is really really difficult. I am now slightly less stressed after a large glass of white! Good luck with everything, hope you get that house (but if you don't, maybe it wasn't meant to be (using a quote from my mum that has been driving me mad recently!!)). Emma

Thanks Nick, it's difficult to give advice over something like this without knowing the circumstances. Basically we rushed into buying a house when I was heavily pregnant, ended up having the baby the day we moved house and never felt settled, decided to move to different area that happened to be much more expensive, found rented house that we could never ever afford to buy (without lottery win), thought we were being sensible by not leaving ladder with other place, especially as it could easily be rented out. Going back isn't an option as we now have a bigger family. Have been very happy in rented for at least three years but can't continue to rent forever...That's a compact version anyway!

A lot of house builders have stoppped building altogether (apart to get the roof on and make the property secure) and many have made up to two thirds of their workforce redundant (including most of their land buyers).

I know large building firms with housing developments here who haven't sold anything in about 6 months and have closed all sites leaving all workers without jobs. Gah life is so depressing.

I think if I were in your shoes I'd sell and stick the money in a very high interest account - at least then you're getting a return on it rather than the loss you're making now. This might not be a very long term strategy but I'm all for living for the moment ?

Seriously though, we're currently trying to sell in quite a different market (in the West Mids) but we've dropped our price by over 15% since January (much of that in one chunk too) and we're still getting no interest. If I were in your shoes with a buyer ready and waiting who's in a decent position, I'm fairly certain I'd be snapping their hand off.

Hopefully it will come off 20%+. Maybe up to 30%.

In your situation , if no plans to move back I would sell now & review in 18mths - 2 yrs.

*Housewifes viewpoint*

If you have a decent amount of equity in the house and are going to want to use that in the next 2-5 years I'd sell and invest it.

If not I'd hang on, people talk about the property crash of the 90s ( and I know this is different) but the houses that went into negative equity then were still good investments for the people who were able to ride the storm.

Plus, any move up the property ladder is easier (if you can get credit) in a falling market.

in today's Times

In Scotland, houses are ether sold at a fixed price or an offers over price. We made an offer on one the other day which Mr Mal loves and which was offers over £168k. Usually, the vendor would expect minimum of 20% over and in some areas way up to about 60%. But we offered them £180k because of the amount of work needing done to it.

The EA called to say they wouldn't accapt a penny less than £200k and they didn't care how long it took. She did laugh when she told me this. So, 2 days passed and they called me again today to ask if we were going to increase the offer; I said no. They are now going to call the vendors and explain the market situation and suggest they take it. I really couldn't give a toss if they do, it needs so much work and muggins here will need to take care of it all while Mr Mal is on a boat in the Med somewhere. They inherited the property so it's not like they need X amount to buy their next place.

Gah!! If you want £200K and not a penny less, then why not ask for it? Why put it on at o/o £168K, crazy thinking. In the current market, they will be really lucky to find a buyer willing to pay much more than you guys are offering them. Sure, they might get it back if they leave it on for another year, but then what condition will the house be in then?

Some people are just greedy.

Thanks everyone for your replies, I appreciate them. Rache, thanks also for that article, it makes interesting reading!

Well, we have accepted. Slightly makes me feel better that we shouldn't lose that much rent as the chain is quite far progressed and they aim to be in at end of August. Anyway, that's if all goes according to plan. At least I can console myself with the fact that if we have made a huge mistake, there may well be a possibility that my childhood dream of living in a tee-pee could become a reality!!

Emma

We are in the same position. We kept our old house as we have a lot of equity in it. I wanted to sell it last year but H was having none of it.

Our rent does not cover the mortgage. The house needs work doing to it. We could really do with getting the equity back to make our current mortgage lower and I am currently upduffed and only entitled to SMP when I have maternity leave.

At least our Tenants are now reliable payers. They cannot get a mortgage at the moment so hopefully things may pick up next year (wishful thinking!)

I've go a piece of string here, I wonder if any Hitchers could tell me....

I want to sell Castle ONE, no secret there. I can't actually do so because the work done last year was grant aided and the contract states that I cannot sell for seven years without refunding the money awarded, it gets less of a % each year till the contract period is up, but if I sold right now I'd end up with faff all (Castle ONE was in a bit of a state).

So in a way.... I'm happy to sit it out. (That 'way' being the 'have to' way).

At a guess (and that's all it is really) I'd say it'll be a couple of years at least before things stabilise. And it could depend on what part of the country you're in. Prices here became so artificially high that I'd imagine we'll continue going down for a while after the rest of the country starts to pick up again.

I really should have sold on instead of rebuilding.... But hey, life's a beach.