More pain ahead for homeowners as demand slows

Why do 'falling prices' mean pain for homeowners? I feel no pain...in fact I am quite pleased that some sense may be knocked into the housing market and there is hope that the younger generation may actually be able to afford a home of their own, without crippling themselves with so much debt,in future!

Absolutely agree with the above comment.

Almost everyone out there, including Government (more house price generate more stamp duty on tax), media (including this reporter) expect the house price to continue to go up, which is completely wrong.

Central banks lost the control of interest rates on housing market by taking it to so low. In its current form, interest rate can go only one way, UP.

There are lots of people out there simply taking 'interest only' mortgages in these ultra low interest rates.

These borrowers are going to cause huge bomb in few years time causing the housing market to crash again (Phase 2), unless government bail them out( that's what happened last year, which effective removed the free market, which is wrong)

Well said Grumpy Old Man. House prices have been farcical for years and are still so. The latest thoughts are to provide more affordable housing. Fine, but buyers will still have problems upgrading later in life because salary rises will not match up to rediculous house price increases. I believe this point has been valid for years only to be "solved" by the provision bad mortgages.

Yes, but people will be feeling 'pain' - the many members of the 'younger generation' who ventured onto the property ladder within the last decade, and who now find themselves owing more than their property is worth, with the gap getting wider and wider. I imagine that's pretty painful. They borrowed within their means and thought they were being sensible. Not everybody is blessed with the wisdom of the previous posters, and not everybody is a buy-to-let speculator or an idiot who took out a 120% mortgage, courtesy of immoral lenders and their laughable 'criteria'.

Ed P,so what is the answer then.....ever increasing prices in an overpriced market then a real mega crash?

Unrealistic values of house prices, have in the past, persuaded a large number of people to delude themselves that they are 'rich'.They have often remortgaged,bought 'stuff' they couldn't really afford .... flash cars,extravagant holidays etc.All this caused a false boom built on the back of non existent paper profits and encouraged by the last Government.

Look where that got the country and a lot of individuals.

Regrettably,the young people who have bought houses within the last few years did NOT borrow within their means.Sadly for them many were sold unaffordable mortgages based on an unrealistic multiple of their earnings to enable them to buy overpriced properties.Not necessarily their fault,but that is no reason not to be pleased that sanity may be returning to the housing market.If these young people first and foremost consider their house a home and stay put,they will not feel the pain.Prices will gradually recover; but they do need to rebase first.In the meantime,homeowners should consider paying off their mortgage with any spare cash rather than doing what some have done and use the house as a large automatic cash machine!

Regrettably,so many believed that house prices only ever go up....they don't!

As a Landlord Bring it on

It was actually Mrs Thatcher et al who started the ball rolling by encouraging wider home ownership. Removing social housing provision and flogging off state assets (council houses) at large discount to tenants encourage profiteering and provided a surge in the availability of capital.

Until that time there was no stigma in renting. China has started to engourage house ownership to boost the money supply, I suspect that in 10-15 years time their property market will crash, bringing it's economy crashing back to earth.

The last government is at fault for slashing interest rates to help those who over extended. The banks have not set mortgage rates at similar levels anyhow - shame on them. The way out of the mess we are in is to encourage saving and not living permanently on credit. Interest rates should return to 4-5%, and mortgage rates to 5-6%. As someone menioned above a HOUSE is to live in, and house pric growth which outstrips inflation is bad news.

However I expect the government to let us experience some inflation in order to devalue their debt, which is apparently now ours.

Grumpy Old Man, it's great that sanity is, perhaps, returning to the market, and you make a lot of sense, but in your original post you asked 'why do falling prices mean pain for homeowners', as though it was good news for everybody.

It might well be, in time, but I was just pointing out that it would be quite painful for a lot of people, as the article suggested. Whether you feel they deserve the pain for being foolish, or it's a price worth paying, is another issue.

I think we’ve had at least 30 years of rising property prices (remember endless dinner-party chatter about house prices and people being encouraged to buy their council houses in the 1980s), so can we blame young people for absorbing the idea that it was sensible to get on to the property ladder as quickly as possible – rather than wait until such times that prices would fall to reasonable levels?

Granted, so long as they sit tight, they won’t really feel any effect, but there will be numerous reasons why people have to sell, and I just have some sympathy for them.

I also absolutely agree with Grumpier old man and Anonymous 1. Why does media always write articles such as this encouraging people to believe a falling house price is a pain to everybody, which is totally untrue. It was high time for media to change their mentality when writing articles about house prices and be more responsible for what they write. There is a huge merit of falling house prices, and there are many people who welcome it. Who wants to mortgage (and remortgage) his/her life to cope with ever increasing house prices.