MSE News: House price rise predicted by MoneySavers

shakerbaby

HAMISH_MCTAVISH wrote: »

:rotfl:

Bit of a back slapping party......

Prices will fall!!!!!!

Yes they will.

Ummmm, what do we talk about now then?

You miss it really Hamish, hence why you're always popping over their to see what's the latest the bears are grazing on.

Cleaver

mewbie wrote: »

98% of them. Yes.

Who would I genuinely seek financial advice from on this board? Maybe Purch.

Fair enough. I think that's quite a disrespectful comment though. In my eyes there seems to be a lot of help, advice and guidance dispensed on this site that seems to aid people who want to hear a varity of opinions from a lot of different people, rather than an 'official' view from a bank, salesperson or website with an agenda. For me, someone doesn't have to be an economic genuis to dispense advice that is useful.

Just as an example I may ask which way houses prices are going and whether I should buy a house. In essence, there isn't a 'right' answer. What's useful is that a number of people with different views add their comments, which I can then use to make my opinion, whether they are staunchly against buying a property or very much in favour. I don't really agree with a lot of the articles people post on here, but each one I read gives me a diffferent perspective and adds, in some way, to my understanding.

I think most MSEers will use this site in the same way and will filter through all the contrasting advice to come to their own conclusion. Obviously you think differently though, and that's fair dos. Although I do sense you getting a tad more bitter in recent months Mr Mewbs.

mewbie_2

StevieJ wrote: »

I don't agree, the people who find their way to MSE tend to be people who are looking for information and advice to improve their lot, Sheeple don't bother.

They are looking for money off offers - cheap insurance, info on best savings accounts. That's fine, but as far as them giving me advice on which way the markets are heading - well - I'll stick to reading as many sources as possible and trying to find some truth within the VI output.

Biggest bubble in history. How difficult is it to see that it cannot go on? 98% morons.

HAMISH_MCTAVISH

julieq wrote: »

Oh go on then, I'll bite...

a) No they don't. The long term trend for HPI is 2.9% compounded, we're at that point now.

b) Unemployment is not high by historical standards, and a great deal of it is falling onto those who don't have mortgages. For those who do, interest rates are sufficiently low to ensure it's not a big problem. The general economy is recovering now, so employment will gradually return.

c) What happened last time is not a guide to what happens now, and in fact is more likely to change what happens because participants are aware of what happened last time and will anticipate it. Look up game theory.

d) There was hardly any reckless lending in the UK. There was reckless lending in the US, which was what brought down the banking system (as far as it went). The housing market was sustained in 2003 at normal multiples, not by reckless lending. Self certification is not the same as lying necessarily, high multiples are not necessarily reckless or unaffordable.

e) Of course low rates have an effect because they reduce the cash outflow for BTL landlords (to take one example) or people in difficulties and hence ensure they don't need to sell. That throttles demand and pushes up prices, which oddly enough is exactly what is happening.

f) "huge" is not a quantifiable amount. Debt is being paid down net anyway. This is hyperbole, not argument.

g) interest rates rise when they can rise, which is when the rise won't cripple the general economy, which is in turn when there is a general recovery, which in turn when people can cope with them rising. Even then they won't rise rapidly.

h) everyone lives somewhere, there is massive demand for housing and a dwindling supply. As Hamish puts it succintly, the only way round this is to build more social housing.

i) Why would fuel price inflation be a factor restraining house prices when it has never done that in the past? That's a neo-millenarian position, not a logical conclusion. Rising fuel prices cause people to use less fuel, they don't cripple their ability to afford housing.

j) you can't have low interest rates causing a problem and then also claim high interest rates will too, make up your mind. In fact again the likely consequence of higher import prices is for people to import less, not to depress house prices.

h) interest rates on savings basically just track inflation, nothing much more than that. You increase savings by saving, not by waiting for interest. But once again, you can't have it both ways, you can't have low interest rates depressing the amount people can save and high interest rates forcing prices down.

It's laughable really that the word "sheeple" is being used by the bears condescendingly about other site users, given that all they really do is peddle a concotion of pat homilies and received wisdom without really working through any of the conclusions and seeing that in many case they're intrinsically contradictory. It's certainly a herd mentality. And more than that, they are lapping up essentially mass media stereotypes uncritically and assuming that everyone apart from them is MEWed up to the eyeballs and pursuing a vacuous and consumerist lifestyle. So just who are the sheep here?

The fact is that the underlying analysis has been proved wrong by events. Anyone with an ounce of intellectual honesty would be disposing of what they previously believed, looking at what is actually happening, and figuring it out. It's really not that hard.

Someone should really call a Vet.....

















Theres' a badly mauled bear out in the woods somewhere licking their wounds.:rotfl:

StevieJ

carolt wrote: »

Well, this last bit is certainly right!

The crash in house prices took all the bulls and most of the world's banks, economists, governments - not to say the bulls on here - by surprise.

So excuse the bears for being a little smug.

Ah so we have had the crash then, 14% what year does that take us back to.

julieq

The correction in house prices was long predicted, but the consensus was for a period of stagnation. The near collapse of the world banking system wasn't really anticipated, but even with that and the tightest credit since 1982 prices are rising strongly now.

People do not generally buy houses with loans alone, they buy houses with loans based on income and with equity and savings, and first time buyers do not buy average houses. There's no reason why there should be a link between average earnings and average prices. It's a complete non-sequitur.

I'm a bit sick of people saying the "bulls" wish people to be locked out of the market. It's rubbish. What we do is to explain why what is happening is happening and that a further big correction is wishful thinking based on faulty logic - if you understand why things are happening you have a far better chance of making optimum decisions. Yes, it would be nice if we could all have nice houses, but unfortunately everyone is in competition with other people with differing priorities and motivation, and what "should" be the case won't necessarily happen. Everyone here should look at game theory, it's fascinating and explains a lot of what we're seeing.

To put it another way, I'm "locked out" of the market for chemical factories. People who can afford to invest in chemical factories buy them, often on the basis of loans, and sell me the products in one form or another. It's not bad that I'm locked out of buying factories, it's just how it is. Their income bearing potential implies a higher capital value than I can raise.

So it is with housing, people who can afford them will buy them either to live in or to rent out to people who can't at a profit over the lifetime of the investment. That has been the case throughout history, it's a historical anomaly that we have high percentage home ownership here.

There's no reason for rents to shoot up, but they're not exactly low, are they? Yields are phenomenal in any case, and rents have held up at a time when just about anyone with a variable rate mortgage has seen their outgoings reduce 8 fold or more.

Interest rates will rise as fast as the state of the economy permits. You certainly can't extrapolate from the ERM crisis coming of the back of a massively overheating economy and stonking wage inflation, which was the back drop to high interest rates to the currently very depressed conditions. We wouldn't see anything similar without a similar backdrop, and there are very few inflationary pressures inside theUK economy, if anything deflation is a more present threat. And there is no reason why the BOE would attempt to control external price inflation (imported goods and oil) with higher interest rates because they wouldn't have any effect, in fact they'd make a dodgy situation far worse.

As for the rest, put numbers on things please, otherwise you're just perpetuating myths. It's received wisdom that there was massive fraud in self certified loans, but there's no real evidence for that. Even the Northern Rock mortgage book is ticking over. We are simply not seeing massive defaults.

What I really object to is not the arguments from the bear side - they're entitled to their opinions - but the abject contempt in which they hold anyone with differing views and their mob mentality. Anyone who had predicted EXACTLY what has happened since 2007 in 2007 would have been shouted down and mocked as a fool. On the other hand they have got just about everything wrong, from the idea of Zimbabwe style hyperinflation from QE, oil price inflation, the scale of the house price crash, the rise this year (longest Spring EVER!), the resilience of rental income, the lack of BTL bankruptcies in any significant numbers, etc, etc. In the face of being so utterly and completely wrong, most people would ask themselves if they may have been mistaken, but in fact what happens is that they just look for another problem to fulfill their prophecy. It's mind boggling that a group who think resolutely in one direction and move as one would call anyone else "sheeple".

StevieJ

mewbie wrote: »

They are looking for money off offers - cheap insurance, info on best savings accounts. That's fine, but as far as them giving me advice on which way the markets are heading - well - I'll stick to reading as many sources as possible and trying to find some truth within the VI output.

Biggest bubble in history. How difficult is it to see that it cannot go on? 98% morons.

Some very good investment and pension advice for example, maybe not the direction of the markets but advice on risk and portfolios composition (to reduce risk).

bluey890

mewbie wrote: »

It is exactly the same, except they have a different opinion on the market. 98% morons. In amongst the idiocy there are one or two excellent and informative posters, certainly ahead of the mainstream press reporting.

This is a not a bear / bull thing Stevie - it is simply that most people do not have a clue.

Here's a simple example of the media and VI reporting. WMD in Iraq. Go back and look at the press and the government, and the sheeple's reaction. Want to sell something to the sheeple? It's way too easy.

Why did Mao put the intelligentsia into the fields? It's OK, I'll stop now, it's boring. No one listens, no one learns - it's OK. I think we arrive with our opinions fully formed, and leave the same way.

Evolution has not led to rational decision making. Over confidence in one self, maybe. Rationality, no.

Re: Sheeples. People are subject to media from first thing in the morning to late at night.
It must have significant effect on them over time.

bluey890

mewbie wrote: »

They are looking for money off offers - cheap insurance, info on best savings accounts. That's fine, but as far as them giving me advice on which way the markets are heading - well - I'll stick to reading as many sources as possible and trying to find some truth within the VI output.

Biggest bubble in history. How difficult is it to see that it cannot go on? 98% morons.

Mewbs, where I politely disagree with you, is this bubble is valued in terms of paper currency with ink on. It's basically valued in terms of toilet paper, and not very good toilet paper at that.
How many pieces of paper with ink on should a house be worth ... who knows?

mewbie_2

julieq wrote: »

long boring self justifying twaddle...

All just VI nonsense Julie. Save your fingernails.