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Debate House Prices
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MSE News: House price rise predicted by MoneySavers
Comments
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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".
So true. Bizarre that they can't see it.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
julieq - educate yourself (and that goes for anyone else on here that thinks house prices can magically stay as inflated as they are) by typing into google 'The unemployment figures mean carnage for the property market ' to find the moneyweek article - sorry can't link to it directly from here.
I'm not a bitter potential FTB. I own a house outright and have a second house with 50% equity. When prices are down 40% from peak I'll buy myself a bigger house to live in
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julieq - educate yourself (and that goes for anyone else on here that thinks house prices can magically stay as inflated as they are) by typing into google 'The unemployment figures mean carnage for the property market ' to find the moneyweek article - sorry can't link to it directly from here.
I'm not a bitter potential FTB. I own a house outright and have a second house with 50% equity. When prices are down 40% from peak I'll buy myself a bigger house to live in
Moneyweek :rotfl:'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
julieq - educate yourself (and that goes for anyone else on here that thinks house prices can magically stay as inflated as they are) by typing into google 'The unemployment figures mean carnage for the property market ' to find the moneyweek article - sorry can't link to it directly from here.
I'm not a bitter potential FTB. I own a house outright and have a second house with 50% equity. When prices are down 40% from peak I'll buy myself a bigger house to live in
US housing: it's not a bubble
Moneyweek, December 2005
http://www.moneyweek.com/investments/property/us-housing-its-not-a-bubble.aspx
Favourite hobbies: Watersports. Relaxing in Coffee Shop. Investing in stocks.
Personality type: Compassionate Male Armadillo. Sockies: None.0 -
Julie, I always read your posts and generally thank them on the premise that anyone who has put in that amount of effort deserves the kudos. Thanks should never be confused with agreement though, I have even started thanking Hamish.
You use the word correction so we will go forward on the basis that we both agree house prices were vastly overinflated.The correction in house prices was long predicted, but the consensus was for a period of stagnation.
Credit is not tight, it has returned to normal levels.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 stronglynow.
You talk further down about historical anomalies, 125 percent LTV and interest only mortages with no vehicle for capital repayment, those were historical anomalies.
Strongly?prices are rising stronglynow.
Well they do nowPeople do not generally buy houses with loans alone, they buy houses with loans based on income and with equity and savings
Prices are set at the margin. I know that because Generali said so and it made sense. If first time buyers cant get on the housing ladder the most important rung is missing and no one is going anywhere...... and first time buyers do not buy average houses.
Average people earn average amounts and buy average houses. I cant see how that is affirming the consequent but I am open to the arguement.There's no reason why there should be a link between average earnings and average prices. It's a complete non-sequitur.
Couldn't agree moreI'm a bit sick of people saying the "bulls" wish people to be locked out of the market. It's rubbish.
You are not talking about logic, you are talking about opinion.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.
I think it, I am always right, therefore my opinion is logical. That's a thingymajig, I forget the word. Non-sequitur.
I will look up game theory. I enjoy new ideas.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.
We did actually get it the first time.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.
Your idea of phenomenal might not be the same as mine. It is an emotive word for something that is purely subjective. For professional landlords yields are fairly good for those who saw a second house as a pension vehicle, the road is a little bumpier.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.
Agreed. Sort of.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
Too much googling, someone else can do it. You can do anything with statistics and graphs, even I know that.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.
You're just perpetuating another myth. Shame on you.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.
Seriously sometimes people go to far on here, on both sides of the arguement.
I am bored now. I have the attention span of a goldfish TBH. I reserve the right to come back and debate this bit later;). Well, if Ad doesn't do it first (and better).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".Retail is the only therapy that works0 -
julieq - educate yourself
:rotfl::rotfl::rotfl::rotfl:
We really need a better class of bear.
I can think of two, or possibly three, hpc-ers that might give julieq a run for her money, but you are most certainly not one of them.
Your retort above, urging one of the most erudite posters out there to "educate" themselves by reading moneyweek, of all things, is laughable.
You truly have scored nil pois.....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Prices are set at the margin. I know that because Generali said so and it made sense. If first time buyers cant get on the housing ladder the most important rung is missing and no one is going anywhere.
Exactly - well put.0 -
Exactly - well put.
If prices were set at the margins, then all the reposessions and auction properties selling this year at 40% off peak would have dragged prices down.
Instead prices have risen every month since february.
That meme has crashed and burned along with so many others. Try again.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Exactly - well put.
income multiples also fell, with first-timers typically borrowing 3.24 times their salary to fund a purchase, compared with 3.33 in June and a peak of 3.39 in July last year.
Doesn't seem onerous, just waiting for the deposits now (into at least the third year of saving.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Hamish, you are luring me to the dark side. I couldn't agree more.HAMISH_MCTAVISH wrote: »We really need a better class of bear.
Your retort above, urging one of the most erudite posters out there to "educate" themselvesRetail is the only therapy that works0
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