House Price Crash, can it happen?

D S Patterson

Supply has most likely been eaten up by the greed of people demanding more than their immediate property requirements. In other words the buy to letters (or buy to leave empty) which covers those seeing housing as a pension, the property for the offspring, and the pure greedy driven on by rising prices and feel good factor from those rising prices.

You’re right the supply would have to increase very dramatically to exceed this demand. However the majority of purchasers are not in it for a home and therefore when faced with a loss) or financial strain, or fear of a greater loss will not all hold on (and many are already covering a rental loss or have a return less than the Building Society A/c, hoping that it will become a profit in the near future). They are not getting them cheap because prices are being pushed up. With a downturn as the prices fall some will buy in (mainly homebuyers) the others will wait for the market to bottom out or disappear into the next investment type.

We are waiting for the steam to run out or a trigger and the supply of homes will miraculously increase. After all people pile in on a rise and pile out on a fall.

Bahtat

“Your 'greedy baby boomers' are generally those who have lost large amounts from their pension funds and National Insurance contributions and now face a pitiful future on below subsistence State Pensions.

I don't know how old you are, but I feel life may yet hold a few unpleasant surprises for you.”

I think you’re argument works both ways – pension losers will rush into the next thing (house bubble) and be a loser there too if they arrive too late. Life is full of unpleasant surprises and one is about to happen to the greedy and the young who haven’t much experience of the housing market – as opposed to yourself who is too experienced and insulated to succumb to a downturn I expect.

The silly blighters are stretching themselves too far and the faster we arrive at the peak – i.e. say at 15% HPI per year the further the market will have overshot.

IMHO