The Unique Property Site Blog

---

The House Price Crash Has Started

I tend to get my stats from the US before they come out in the UK, but if they are slightly different, the direction and general conclusions are the same in both countries. In short, the cost of houses is going up courtesy of interest rates, and their price is therefore going to come down to balance the household expenses.

As I said way back; sell before the disaster strikes, then rent, and buy when when the carnage is over. Certainly dont buy now.

So, today when the mortgage rate is over 7%, basically if you are a new buyer and you want to put 20% down and you want to buy a house, it's basically going to cost you almost twice as much on a monthly basis as it would have been a year ago. That’s quite some hike.

But what that means is that for houses to remain affordable with a mortgage, prices are going to have to come down quite considerably. And we are only at the beginning of this change in direction. Obviously rather a lot of people have already sussed this as I notice there are rather a lot of properties suddenly coming on the market. Folks want to lock in a sale before the carnage really starts.

Supposing someone wants to move into a similar house to the one they are selling. Here are some figures of how things are going to turn out in the States. The figures will be different in the UK, but the end result will be the same, your new home is going to cost a lot more unless the purchase price drops considerably.

In the USA, for swapping an existing home for a similar new home the American mover is going to have to find an extra $15,000 a year. That’s going to impact house prices across the pond quite considerably.

Something similar is going to happen in the UK with the way interest rates are rising, and they are likely to rise more than in the rates in the USA. Add in inflation which is now in double figures and still rising, and you can take it that house prices are on the way down, and that trend looks set to continue. If you need to sell, sell sooner rather than later.

As for government expenses just think what interest rate rises do for that debt. I dont know what the national debt is now, but it is several trillions. What does a 1% rate rise do to the cost of that? A 2% rise? 3%? Life in the UK is not looking good as you guys creep into winter.

Your previous wonderful prime minister actually went out of his way to visit Kiev and hassle the government there to quit the peace talks. Look at the casualties stacking up, and look at the world you have inherited as a consequence of that, plus those lunatic green freaks who think you can stay warm on solar and wind power.

I think you guys are mad to put up with the morons in Westminster, and your pain is only just beginning.

The USA is rapidly becoming the most unpopular country on the planet, and Britain still hangs on to their coat tails. That isn't going to do the country much good.

And Europe is quite deliberately being destroyed. The standard of living in the old continent is dropping slowly at the moment, but next year the drop is going to go exponential. Those lunatics in Brussels thought it was a great idea to interfere in Russian politics. Now instead of buying agricultural products and energy from Russia, Europe is having to buy it from India and China who dont have the energy in the first place. They buy it from Russia cheaply, double the price and now sell it to Europe. Your energy still comes from Russia but at twice the price. Clever stuff, isn't it.

Subscribe to our email alerts on the housing markets both in the UK and abroad.