I'm experiencing higher volumes now

mbga9pgf

whathavewedone wrote: »

But that assumes that no one will want to buy in the future. Most people who buy homes do so to live in them. Assuming people decide to rent in future - who's going to buy those homes to rent them out then? Will they not want to make a profit out of that?

Sorry but if the theory is that house prices can only ever go down/stagnate ultimatey houses will end up cheaper than food. That's as nonsensical as houses only ever going up and ending up costing billions of pounds in a hundred years.

Yes, but if a house goes up 3% and my wages go up 3% its WORTH the same.

mbga9pgf

Conrad wrote: »

Dopester I enjoyed your informative post, cheers.

As for which categories of customer I am seeing more of, it's buyers as opposed to remortgagors, but to re - itorate, I may be seeing more due to the contraction in the broker & lending community.

High income multiples have not returned, although 5 x income is still available with the likes of C & G, which some will argue is irresponsible.

Will the market boom again? It will, within 5 years at most. The reason is simple; People trust the investment alternatives even less. Stock markets and packaged investments in the eyes of many are to be avoided at all costs. I routinely here of Accountants telling thier clients that 'pensions are a waste of time'. Such sentiment has become deeply embedded.

Furthermore, shelter is one of lifes most basic requirements. As such over any medium to long term span, the cost is highly likely to rise.

People will always attatch significant value to shelter, despite the odd collapse in prices.
Darwinian theory informs us all species make territorial security a high priority. A stable secure self governed dwelling enviroment, is more conducive to Genetic and Mmemetic transfer.

Dont you see that buying property has become just as risky as equities though? Once everyone has lost on average 40% of their most expensive asset cant you see a little bit of reluctance creeping in there to not risk it again, especially at higher multiples?

This crash will have a profound effect on the housing market. I think the next boom will be far more subdued, nowhere near as big, as a result of subdued attitudes to risk on the part of the consumer, as well as reduced risk taking by the lenders. Which is no bad thing at all really. The next boom will be nowhere near as big as the one we have just had and I honestly dont think real prices will reach anywhere near as high. House prices caused the economy to collapse. What is going to happen to make banks make the same mistakes after such a small time frame?

lostinrates

Conrad, how ar you feling now about buying a BTL? IIRc correctly that is on the cards?

I'm seeing more and more houses fall into the eye watering as opposed to eyes tightly closed catagories, and am debating going to see one that is out of our budget at the momnt but may drop down into it. I'm also a bit gutted as I missed something that was pretty much our dream parcel of land -right acrage and pretty darn perfect location- it went to best and finals in December, I'm not sure why it didn't come up on seraches before. Crucially however it was advertised at a price per acre that I consider more reasonable than other lots in previous months(5k per acre guide price).

We had agreement in principle for what I think is a large multiple in autumn and I'm keen to see what we'd be able to borrow this year.

BlondeHeadOn

OT, but everytime I read this thread title it reminds me of a !!!!!! Spam email I received on Monday - IT HAD EXACTLY THE SAME TITLE !

"I'm experiencing higher volumes now"

:rotfl:

I had to read the thread just to check it wasn't a !!!!!! post! (Or maybe that's just my dirty mind....)

Mind you, maybe it would class as 'property !!!!!!'?

Really2

mbga9pgf wrote: »

Dont you see that buying property has become just as risky as equities though? Once everyone has lost on average 40% of their most expensive asset cant you see a little bit of reluctance creeping in there to not risk it again, especially at higher multiples?

The average owner house even if it does lose 40% will still not be in NE.
It is only the boom being whipped off.

We all know it will be back again, Just like equities if the company survives the downturn you make a packet.
Homeowner survives the downturn house price goes back up.

One thing for sure is even if you purchased a house in summer 07 in 25 years time it will still be worth at least 2X what you purchased it for.

Not talking up houses just stating a fact.

lostinrates

Really2 wrote: »

One thing for sure is even if you purchased a house in summer 07 in 25 years time it will still be worth at least 2X what you purchased it for.

Not talking up houses just stating a fact.

I think you ar right. But I think you could possibly equal that rate of return by investing the amount you'd be paying as interest in other ways and reting with the 'repayment' part. For some people this would be a better lifestyle, for others not.

Cannon_Fodder

Conrad wrote: »

People will always attatch significant value to shelter, despite the odd collapse in prices.
Darwinian theory informs us all species make territorial security a high priority. A stable secure self governed dwelling enviroment, is more conducive to Genetic and Mmemetic transfer.

I don't disagree, indeed I can see evidence of it in the actions/attitudes of (more commonly) the females of my acquaintance.

My query, is why did people choose to jeopardise their *high priority* shelter and territorial *security* by borrowing against it, MEWing etc, whether for holidays, cars or for BTL deposits...?

Shouldn't their main residence have been more important to them, if its such a high priority...?

Is it a testoterone thing, the male "hunting" for additional resources over-rides natural female caution/nest-making?

Really2

lostinrates wrote: »

I think you ar right. But I think you could possibly equal that rate of return by investing the amount you'd be paying as interest in other ways and reting with the 'repayment' part. For some people this would be a better lifestyle, for others not.

I think every projection would show that not to be the case though.
short term it is (less than 10 years) but rent inflates over time where the debt deflates.
That is why so many people still want to buy as it is the cheapest way of living over 25 years and even more so over 50+

Conrad

lostinrates wrote: »

Conrad, how ar you feling now about buying a BTL? IIRc correctly that is on the cards?

I'm in 2 minds about B2L.
On the plus side I've seen some attractive yields above 7% net of service charges, and I could afford to buy something small for cash, which, might not be the case if prices recover their losses. Furthermore, ultra low interest rates might bring investors out of hibernation, thus the bargains could be hoovered up.
Low interest rates also make the case for clinging to cash weaker, when I could be earning significantly more from property rental.

On the down side, there is a real risk of a further 20% price fall, rents are reported to be falling and I'm also hearing from EAs that there is an over supply of rental property. The lending contraction is real so its got be reasonable to conclude price will fall further.

As ever teasing out the true picture is proving very difficult.:rolleyes:

I'm not a very good investor as I lack the conviction and tend to over analyise and paralyise myself.

mbga9pgf

Really2 wrote: »

Not talking up houses just stating a fact.

No you are not, you are spouting rubbish. because if prices will double from now, housing will be even more unaffordable than it was. You cant beat market equilibrium.

You cant say, well, house prices will cost twice as much in 20 years time ignoring the fact that wages will have doubled as well! You cant just ignore wage inflation. If the average house costs 2X and wages are 2X what they are today, the house is WORTH exactly what it was today!!!! you might as well put your money in the bank. Investments are only 'good' where you get a sustained stable increase above wage inflation. Anything less and you are losing money.

Until 2001, house prices followed wage inflation almost exactly with one or two lesser deviations. it was averaged out, a neutral investment. It was only the hype and credit-fuelled boom of 2001-2007 that caused house prices to rise over wages in a much larger more sustained boom than normal. 2001-2007 was the 'odd-one-out'.

Claiming houses are anything other than a home and instead think they are an investment for capital appreciation purposes quite frankly doesnt understand the most basic tennents of economics. :rotfl: