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[MSE Lawrence]

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's 'Property Porn Experts: where are you?' Blog.

Click reply to discuss below.

[d31b0y]

it wasn't just the property porn "experts" in cloud cuckoo land either, this from a building society predicting that in London first time buyer homes will cost £1m by 2018
http://www.stroudandswindon.co.uk/on...ome_pr136.aspx

based on that same broken logic, my own "shocking research" reveals that if house prices continue to follow the current crash trend*

Then by 2018 first time buyer homes in London will be absolutely FREE !

lol

[moneybagsuk]

Lol, Martin is right as ever, all those property development / buy to let millionaire programmes recorded 12 months ago are starting to look a bit silly now aren't they?

I love looking at the downward trending UK sold house prices graphs on Zoopla for England as well as the counties - you can see the property bubble bursting graphically before your very eyes...

[WTF?]

It's great that Martin is talking about this now but the facts are that about a year ago, people predicting that the market was about to go into decline and warning would-be buyers vocally about the dangers of buying property at that time (August 2007) were almost shoved off the 'House Buying, Renting & Selling' board on MSE.

All talk about property prices falling was confined to a single thread in the hope that it would go away. It didn't, of course,and around last April a 'House Prices' board was started due to demand from members.

So it wasn't just mainstream media that were denying the facts and refusing to accept predictions - it happened on MSE too!

[Errata]

Where are all the property porn pundits ? They're busy developing moneysaving internet sites or taking short sharp debt counselling courses !

[MSE Martin]

Originally Posted by WTF?

It's great that Martin is talking about this now but the facts are that about a year ago, people predicting that the market was about to go into decline and warning would-be buyers vocally about the dangers of buying property at that time (August 2007) were almost shoved off the 'House Buying, Renting & Selling' board on MSE.

All talk about property prices falling was confined to a single thread in the hope that it would go away. It didn't, of course,and around last April a 'House Prices' board was started due to demand from members.

So it wasn't just mainstream media that were denying the facts and refusing to accept predictions - it happened on MSE too!

Thanks for this note, and I understand why you may come to that conclusion, but I think there's some confusion.

The issue you're talking about has nothing to do with the sites view on house prices. It is to do with the behaviour and organisation of the forums.

Sadly almost any discussion on homes and mortgages was swamped with house price discussion to the detriment of people needing help. We had huge duplication of topics and posts and wanted to try and make it easier for people to use the forum.

My own view, and by definition the view of the main site, has been on about house prices for years. Here's the first three blogs I came across...

• When did home ownership become a right (MAY 05)
• A nation hypnotised by property porn (SEPT 06)
• If I hear renting is just throwing money away (NOV 06)

I'm not sure how writing this in one of the highest profile part of the site and inclusion in the weekly email that goes to millions can quite count as hiding it. You'll also see from one of the blogs a link to when I ranted about this on BBC TV in 2006.

I hope that clears it up.

Martin

PS please can we NOT continue the debate here, lets stick to the main issue of the blog rather than discussing forum policy

[freeliving]

Well they're probably laughing all the way to their bank, (talking of which, if you haven't already, take a look at this site talks about why current money system doesn't work and NEVER will http://www.moneyreformparty.org.uk/ u can watch their dvd on utube or buy theirs
who knows maybe they were bank sponsored programs ^^ :P and the presenters got throw backs??

time for us all to wake up... we'll be slaves to the banks till the day we die there just isn't enough money in the system to pay back all the money we owe including the banks interest - it's time to break the system stay out of debt

Have fun, work less, play more

[setmefree2]

Originally Posted by freeliving

time for us all to wake up... we'll be slaves to the banks till the day we die there just isn't enough money in the system to pay back all the money we owe including the banks interest - it's time to break the system stay out of debt

Have fun, work less, play more

Hi,

When I logged on this morning I noticed this:-

"Debt is like fire: a useful tool, but get it wrong and get burnt"

It's one of Martin's little mantras. I'm grateful to the banks who lent us the money we needed to buy our home. Our interest rate has varied from 4.5 to 5.67%, hardly usury. The house we bought had been in someone's family for a 100 years. Maybe it can be in our family for a 100 years and my family will always have a roof over their heads?

Soon we will have all our mortgage offset - only £40k to go.

MY POINT- well sometimes it's necessary to get into debt in order to secure what you want and I'm grateful to the the banks for providing us with this opportunity. I'm a MFW and will have rid of my mortgage asap but debt isn't always bad IMHO.

Regards

SMF2

[midflight]

"Lol, Martin is right as ever" - MONEYBAGSUK

Hmmm... Here's what Martin actually said:

The price drops aren’t unexpected, only the timing was difficult to pick. I remember causing a stir on Vine (BBC Radio 2) about a year ago, saying “there’s going to be a house price crash”, but then explaining “these things are cyclical, there’ll definitely be a crash, I just don’t know whether it’ll be in one year, two, five, ten or twenty.”

Did that really cause such a stir!?!? I honestly don't know anyone who wasn't expected some kind of serious house price correction. Everyone's been banging on about it for at least 2 years before it started to happen, and the indications have been obvious for even longer. Even Mystic Meg could have seen this coming.

If that's all it takes to be able to say "I told you so", then in that case I'd like to drop a similarly prophetic bombshell by predicting:

THERE WILL ABSOLUTELY 100% DEFINITELY BE A SERIOUS MAJOR TERRORIST ATTACK IN THE UK, IN WHICH HUNDREDS OF LIVES WILL BE LOST!!! (I'm just not sure if it will be in the next one year, two, five, ten or TWENTY)

Please don't say I didn't warn you...

[pathfinder2]

That was the problem though, no one believed that there would ever be a house price correction, ever. The TV pundits didn't do anything to dispel that notion either, they kept urging people to buy now, before prices went up again. It was painful to watch and people would not listen to anyone that had a negative opinion on house prices.

A crash was bound to happen but when no one quite new. I remember telling my friends in 2004 that prices were too high and they would crash very soon, and then they went up for the next three years. Fundamentally I was right, but you try telling that to panic stricken buyers, piling in to bid £200,000 for a broom cupboard in Kensington.

When will the recovery start? My money's on 2013-14. But it all depends on the severity of the slump, Japan still hasn't recovered 18 years after theirs.

[moanymoany]

The writing was on the wall last year for anyone to see. I thought the decline would be slow and we did our house up and put it on the market at the end of February. By the end of March it was clearly falling fast so we knocked money off the price and sold it for 8% less than the original price.

It was amazing how many people said we were mad - even the EA said it was too much. Our buyer had sold at the peak in '07 and completed in 4 weeks. When we went to thank our EA - who had been fantastic -they told us we had been on the ball and had been right.

[astralbee]

Of course, we'd all have liked a slice of the pie when everyone was talking about making money out of property. But I bet as many people lost as there were profiting from the huge rises in the past few years.

I know a couple that tried to make money by buying run-down houses, living in them while doing them up, then selling for profit. They worked all year only to make a measly £1000 from the sale.

Those of us that passively thought we might be sitting on a goldmine with the value of our own property rising may be initially disappointed by the crash... but if like us it was all speculative and you were not really serious about selling then you've lost nothing!

Dar

[freeliving]

Originally Posted by setmefree2

Hi,

The house we bought had been in someone's family for a 100 years. Maybe it can be in our family for a 100 years and my family will always have a roof over their heads?

SMF2

the way we're going on this planet there won't be any resources left in 50 years and life will be real tough. Oil production has peaked, there's 90% less fish in the sea, England and America are going to war to fight for oil and resources...

All I'm saying is if we didn't have to pay interest on money we wouldn't have to increase the rape of the planet (production and profits) in order to pay fictitious money back to banks, who are ofc profit making organizations...

But u know total respect when u have repaid your mortgage,well done, u've beaten the system just don't remortgage to pay for your retirement home :P

[tealady]

I feel that most people buy and move from house to house to make money. What they cannot see is they have not "made" as much as they would like due to interest payments, alterations and repairs. If house prices drop, well thats market forces for you, at least if people are selling to buy another house then theoretically the house they are buying will have dropped in price as well.
House buying and selling to make a profit is a form of gambling IMO, I bought my house to have a roof over my head not to use it as a cash cow.

[setmefree2]

Originally Posted by tealady

I feel that most people buy and move from house to house to make money. What they cannot see is they have not "made" as much as they would like due to interest payments, alterations and repairs. If house prices drop, well thats market forces for you, at least if people are selling to buy another house then theoretically the house they are buying will have dropped in price as well.
House buying and selling to make a profit is a form of gambling IMO, I bought my house to have a roof over my head not to use it as a cash cow.

Hi

I bought my house as a home too. People seem over obsessive about house prices (market values) when as you say alot of the cost of a house is in the interest paid on a mortgage. I don't get much time to watch property porn but if I did I'd enjoy it whatever the market values of house where. I like nosing at peoples decor and interiors....

Regards

SMF2

[majorzott]

In the past a mortgage was maybe three or three and a half times saleries, thus effectively capping the amount a couple had to spend on their first house, and even then only 90% mortgages were available, (10% deposit needed). Of course to make money the more a bank lends the greater its proffit, so slowly the amounts available for lending have risen, 4x, 5x saleries, 90% to 100% and even 110% mortgages. So the more to spend doesn't cap prices were they were! Only flaw is the loans became more and more risky and then - crunch.
Also people have gotten used to the 'instant fix', they don't expect to have to save up a 10% deposit, so I recon this correction will last for as long as it takes people to save a reasonable deposit, (generally), and then the market will begin to pick up again.
Another point so what if your house has dropped 20%, if your staying put what's changed really ? If you want to move then the house you want to move to will also have dropped 20%, so you'll actually be better off, (if it's more expensive). Only loosers are people at the end of the chain, - sellers who want to cash in their assets - everyone else is a winner.
Regards

[ManAtHome]

Originally Posted by majorzott

Only loosers are people at the end of the chain, - sellers who want to cash in their assets - everyone else is a winner.

Unfortunately the 'losers' at the end of the chain tended to be your children or grand-children etc, so the only real 'winners' are at the gene pool terminus...

[bobed]

Martin

It seems to me that we are to encouraged get bargains for cheaper items like clothes, broadband, electronics etc.

When it comes to homes - the biggest, most expensive purchase of our lives - there is noone championing the idea of value for money. Have you ever considered being this champion?

Bob

[tinecu]

Martin,
Many pundits were warning of a house price crash some time ago but they seem to have been drowned out by a kind of get rich quick fever that had overtaken the country. Remember those painful dinner conversations about how much someone had made by the apparent rise in value of their house....arrggh! The fact that I don't have to suffer these awful gloating idiots any more is a silver lining in the current housing market cloud.

FWIW I know that Home.co.uk were predicting house price calamity since 2006.
See: http://www.home.co.uk/asking_price_index/
In particular the article on house prices 'surging towards a tipping point'

Oh the madness of crowds (and banks!).

[1sue23]

I am a little confused as to when homes that we need to live in and to bring our children up in became something to make money from .
My parents purchased a house in the 50s after first living with parents and then in rented and every penny was accounted for to buy this home ,but never in my entire life did they talk about its value ,it was extended in the late sixties and had a new kitchen fitted but paid for with savings they would not have even known its value because it was their home end of .
Watching property programs now it is all about value and what it is worth kitchens are ripped out, new designer bathrooms are fitted ,family size houses are extended all to increase the value but it seems no family ever live in these houses because they are then sold on just for the money .It just seems madness, falling house prices may redress this and people will see houses as homes again not a quick money making scheme .