House Price Crash Website

poopscoop

Chrysalis wrote:

Economy - I dont believe jobs are more secure, far from it. We have more temp workers then ever, the new trend by companies is to outsource (recent ntl 6k job losses), and there is a pattern of more and more unskilled work been outsourced and people who have gone to uni etc. and now doing skilled work are carrying student debts. When the credit buying stops the economy will crash its just a matter of when. We also now export less then we import as well and are predicted to fall below india GDP within 10 years.

That is so true, no job (being an employee) is secure nowadays. Offshoring is so cheap it's time to do other things. Things you have passion for and make a business out of.

lessonlearned

I doubt it. I am still selling plenty of houses.

With almost 20 years experience of selling houses I think I've come to the conclusion that for most of my clients, buying a house is seldom a simple financial decision.

Most people buy a home (note the word home) with their hearts and not their wallets and they will move heaven and earth to acheive their goals.

Most purchasers will stretch themselves to their absolute limitto buy the best they can afford, for themselves and/or for their families. Buying a house is about putting down roots and building a nest. (Investors and speculators are of course another matter).

Yes, prices are currently high and getting onto that first rung of the ladder is tough, but I truly don't think this is a new phenonomen. I genuinely don't think it is any harder nowthan say, 20, 30 or even 60years ago.

During World War II great swathes of housing were destroyed and housebuilding took a long time to replace damaged or destroyed housing stock.

As a nation we still don't build enough houses per year to keep up with demand and it is the law of demand and supply which helps to keep prices high.

Secondly, we live on a small densely populated island and therefore housing will always be expensive compared with larger less densely populated countries such as say, France or Spain.

With regard to repossessions. An increase in the number of repossessions is a sign of a relatively healthy housing market. Banks are not in the habit of repossessing property they have no hope of selling. When the market is depressed the number of repossessions tend to decrease. It is is not until the market picks up again that the banks start repossessing and selling to get their money back.

Yes the housing market can be volatile at times and therefore subject to boom and bust cycles but in the long run we have to remember that we all need a roof over our heads.

As a very wise man once told me "Land will always be the best investment - it is the one thing we can't really making any more of". This is especially true in Britain where land is in such short supply.

F_T_Buyer

The problem with HPC is the forum moves far too fast, and it's impossible to keep up with what's going on. When you do find good threads, they are good - and its probably the best place to find out whats going on in the UK housing market. There is however time wasting threads which are about nothing at all...

There is a negative tendancy, but in saying that they are many places where there's an optomistic tendancy - one of which this place was. If I previously came on certain forums and said prices *may* fall I would be hit down in flames.

I do however think prices will fall, and am honestly surprised they haven't yet. I have studied economics, and continue to keep up with what's happening in this country with regards to business and finance (partly for interest & deciding where my investments go).

One of the major problems with the discussion of the housing market is people want to feel wealthy, and no one likes someone else saying you're not as wealthy as you think. This leads to name calling (e.g. doom mongers) and bitterness towards those who think prices will fall - some of which is apparant on this thread. If anyone is a doom monger it is (e.g.) The Express and the EAs who say prices will double in the next ten years (whereby they also say wages will not double).

Remember - the majority of the younger generation is priced out of home ownership in their own country, like I am. It would have been far more beneficial for everyone if prices had not got so far out of sync with wages, but they have - predicting a crash, correction, stagnation is not a wish of mine it's something I anticipate.

I do feel people are pushed into buying for the first time, not with a gun to their head, but by advise for exsisting homeowners who have already made money. I think anybody who doesn't understand economics and the housing market should be advising someone to buy or not; and this includes people on this website saying "houses always go up" (which is simply not true), but EAs and IFAs (who are salesman).

I am a little surprised by some peoples reasoning on this website. Like someone has said, this website is about value. People figure out how to play financial industry and make money from it, like credit card stoozing. But they are those who argue about the housing market because it's what they want to believe.

That's my 2p anyway. If you want to discuss why I think prices will fall, start another thread and i'll happily join.

~~~~~~~~~~~~~~~

I did find one post from HPC which summed up what's going on and thought you may like it:

i've been around for a while....pretty much day 1 i think i joined after they got rid of the old forum....(i'm still a newbie tho cos hardly ever post!)....i thought prices would be well on their way down by now but looking back i can see some of the reasons they only stagnated....and it aint no new paradigm......its basically government and banking policy that has allowed it all to continue........however i'm hoping we're now at the point where theres no more tricks to use to keep prices high. the way i see it prices should of popped with a bang by the end of 04 but who could of foreseen the govenments foolish policies.

2004 - was the year of MEW...everyone was at it especially those that had brought in the last three or four years because they had never seen how a poor performing economy can be and just what being in debt means.... the media & banks promoted it....everyones friends and family were at it....so no one saw any problem with taking on more debt....in fact i dont think people even saw it as debt....they saw their house as a cash machine instead. this MEW allowed people to service other credit card debts, unsecured loans, holidays, cars etc...basically keeping the repo man away.....if MEW hadnt gone mainstream then forced sellers would of been on the rise during 04 putting downward pressure on prices....the banks went for a two pronged attack by also increasing income multiples by which they would lend and allowing self certs to pretty much anyone = new buyers...no forced sellers...no crash...phil and kirsty enticed mr and mrs average into btl on the back of a rising market

Gordon brown - now did he have a long term plan for all this since say 2001 because im always shocked at the confidence he displays during budget talks etc when im screaming at the telly how he's wrong...he's been right more than me tho!!! However, looking back if he did have a plan written down it would go something like this.......firstly give indepence to BOE so they can be the fall guy at the end (as it is oil is his new fall guy!!)...anyway make em independent.......then change the way inflation is measured to keep interest rates down knowing money supply would then increase....surely this would of meant higher inflation and interest rates....but gordy's plan includes chinas cheap imports into the equation so infact inflationary pressure would be downwards as we loaded up on mp3 players and dvds.....the contiuing growth of supermakets and their pressure on suppliers costs meant cheaper food products (not to mention their move into white goods)...again inflation low....interest rates low....money supply high (side effect...more debt.....the cure....MEW)......no bear could of predicted this so we get slated....bears opinions changed slightly from one of a crash to one of slow falls over a no. of years (just what i noticed on the forum)

2005 - everyone who could of MEW'd pretty much had done by mid way through the year so it took a nose dive...high street suffered...and it looked again like prices may go down. interest rates foolishly cut to save the day....however no saviour then available from unsecured loans, high cost of living etc (as people have already taken equity out of house).....so the market looks even more risky..........another rabbit out the hat needed....cue.....the year of the interest only mortgage...took off in 2005 and went mainstream later in year and full steam ahead in 06.....new buyers.....high money supply...low inflation. the side effect in 05 is the Uk's reliance on world economies as manufactuiring went down down down because of gord's much needed cheap imports. Banks stave off forced sellers by allowing people to swap from struggling on a capital repayment to IO......also dishing them out to ftb's = no forced sellers whilst allowing more new entrants to the market thus prices rise...again...no bear could of predicted Interest only going as far as it has....so we take another beating!

2006 - interest only mortagage now the only thing stopping a crash.....its working.....but for how long.....we are now at the mercy of world economies......i cant see any other rabbits out the hat......you never know tho...can there be anything left to sustain prices??? i still think prices will crash over a short time period due to the crazy level of prices, debt and peoples ability to pay....i think banking policy and lending criteria can change quickly as all they are interested in is risk and money making.... and i think gordons plan (was it a plan or has he jus been lucky???) is now at an end.....i mean what else has he got left??

Another good website is The Mootley Fool

Ian_W

Don't often comment on house price crash threads these day ... soooo 2005 darlings. However,

lessonlearned: Most purchasers will stretch themselves to their absolute limitto buy the best they can afford, for themselves and/or for their families.

Is probably the most compelling argument in support of HPC arguments I've seen for a good while. Whether it's a nest, home or whatever - it has to be paid for and people stretching themselves to the absolute limit are riding for a fall IMO.

An increase in the number of repossessions is a sign of a relatively healthy housing market. Banks are not in the habit of repossessing property they have no hope of selling. When the market is depressed the number of repossessions tend to decrease.

Erm, run that past again? According to the CML the record number of repos took place in 1991 at the peak of that "crash". Figures from 12 months ago were at an "historically low level" and whilst they have increased since, it's hardly surprising and they're not, on the last figures at least, particularly worrying but current figures aren't out until later this year.

Trouble with HPCers is someone told them, house prices are a "bubble" so they all go, Ha!! ... and we know what happens to bubbles, don't we - they aren't a REAL bubble, its a term - not a fact. IMO house prices are more like a balloon [come on guys, Ha!! ....] - if an outside violent influence, substitute reccession/int rates hikes for a pin, strikes them when they're over inflated the result may well be relatively violent falls in prices - if it doesn't that the pressure will gradually deflate on it's own. I say relatively violent because experience last time around tended to show it was a quite lengthy process over several years at different rates in different parts of the country.

How do I know that? In 1989 we bought a property which we sold for 50% more in 1992 when the UK figures suggested the prices had dropped 10-12%. The property we bought in 1992 was worth less than what we paid for it and spent on it for 5 or 6 yrs, despite a recovery from about '94 onwards.

Unlike shares there isn't a centralised market/index it's very localised, IMO, not even regional trends govern how prices are in your town or district.

So big question, will some external force cause a crash? I really don't know - neither IMO does anyone else. So a website that for 3/4 years has discussed, pontificated, plotted and justified something that hasn't even happened? Please pass me a tin of paint, much more interesting watching it dry!!

tomstickland

everyone was at it especially those that had brought in the last three or four years

BOUGHT!

With almost 20 years experience of selling houses I think I've come to the conclusion that for most of my clients, buying a house is seldom a simple financial decision.

Most people buy a home (note the word home) with their hearts and not their wallets and they will move heaven and earth to acheive their goals.

Most purchasers will stretch themselves to their absolute limitto buy the best they can afford, for themselves and/or for their families. Buying a house is about putting down roots and building a nest. (Investors and speculators are of course another matter).

Very interesting that you say that. I came to the same conclusion based on virtually no evidence, but just deciding that most people will borrow as much as they can. They don't think about the consequences, just a yes from the lender and an estimation of whether the monthly payment is affordable.

For various reasons, I've bought at about half of what I could afford.

Doozergirl

Ian_W wrote:

IMO house prices are more like a balloon [come on guys, Ha!! ....] - if an outside violent influence, substitute reccession/int rates hikes for a pin, strikes them when they're over inflated the result may well be relatively violent falls in prices - if it doesn't that the pressure will gradually deflate on it's own.

Ian, you are my hero! :kisses2:

Ian_W

Steady on girl, think about me old ticker!!:blushing:

lozthompson

I'm sorry, but it is supply and demand for me!

More people are living in the UK, more people live single lives (but still want their own property), more people want a 2nd home & more people with equity want to rent to make cash.

Vicious cycle

Property_Magnate

Well, I've been reading https://www.Housepricecrash.co.uk for a few days now. Looks like there is a whole underground movement out there!

My views:

Fact: Confidence is still relatively high - people are still buying.
Fact: Property is over-valued compared to the long term trend.
Fact: The economic fundamentals are weak and getting weaker.

As long as Confidence is high there are those that will stretch themselves to buy as they believe prices will be higher next month. There is a huge selling industry pumping out information to maintain confidence.

Me: After 20 years of buying ... I'm selling!

tomstickland

Whenever it happens it going to provide a lot of morbid fascination. How long will it take though?

Personally I'm 50-50 on whether there will be a crash or whether prices will stagnate or fall slowly over a period of time, meanwhile inflation will be catching it up.