Wake up Bears its feeding time

the_ash_and_the_oak

chucky wrote: »

just going by cycles, my real thoughts were between 2012 and 2015 - no proof or anything just a date where cycles of recessions go by, i sold a couple of properties in 2005 and 2006 because i wasn't comfortable with the economy. because we've had what he have now i pushed it out further.

for example 2001/2002 recession in the USA - we got out of that one i believe by being clever with our interest rates.

again 2005 we could have had a HPC and possibly a recession but rates were used again.

so we've had one now and am guessing the next one will be in about 5 years time = 2015

Ok so you mean you were kind of thinking 2012 originally but because of the credit crunch etc back to 2015? that makes good sense. There are a few factors imo (demographics in particular) that were described as a factor in 2007 but to me seemed too early to come into play just then (and still too early obv)

Are you glad you sold the couple you did? (was it all of them or did you keep some too?)

Wookster

Graham_Devon wrote: »

We crashed for a reason. Some blame america, some blame the massive increase in prices and dodgy lending in the UK also, some blame both.

If I can add, that is dodgy lending to support those dodgy prices (both private and commercial).

chucky

the_ash_and_the_oak wrote: »

Ok so you mean you were kind of thinking 2012 originally but because of the credit crunch etc back to 2015? that makes good sense. There are a few factors imo (demographics in particular) that were described as a factor in 2007 but to me seemed too early to come into play just then (and still too early obv)

i was thinking 2012 and 2015 but think all has been pushed out again.
house prices will come back to the norm but your right about demographics being brought into play.

the_ash_and_the_oak wrote: »

Are you glad you sold the couple you did? (was it all of them or did you keep some too?)

most definitely, i sold two and got out. i had to sell otherwise i would have had a capital gains liability plus i wasn't comfortable with the economy so had a good excuse.

the_ash_and_the_oak

GDB2222 wrote: »

I am convinced that the last 6 months of rises are real, not just noise. However, it doesn't matter even a little bit why those rises took place. The real question is whether house prices are too high now and due to fall in the long run. That long run may not happen for a while if interest rates remain low and jobs continue to be bolstered. However, eventually, we need to get back to some form of normality, and what happens then?

Well this is the thing - if you think there are more downward pressures than upwards in the future then I don't really know why the rises of 2009 would make you feel that was less likely to happen (actual stagnation would have made me feel it was less likely

I think these are undeniable truths:

1. House prices are a very high multiple of earnings by historical standards
2, Mortgage payments are affordable currently, given current low interest rates, and it's not clear when rates will increase, but surely they must eventually?
3. We are very likely to have a new government shortly, with different priorities

1 and 2 are kind of the same point. They are high by historical standards because money is cheap by historical standards imo. The question might well be - is credit (at lets say 5%) cheap by the standards of the next 10-15 years?
3. I don't think this really is going to matter that much

Ron2256

I don't see house prices going down at all this winter. Not with interest rate at 0.5%.
Most mortgage holder are sitting pretty, well not all of them but most.
And I expect this will carry on as long as IR stay low.
We could see a new bubble forming as soon as next year and I don't think anybody will be willing to stop it. The BOE will raise IR eventually, but by then inflation will be way over target.
Uncertain times ahead.

the_ash_and_the_oak

Ron2256 wrote: »

I don't see house prices going down at all this winter. Not with interest rate at 0.5%.
Most mortgage holder are sitting pretty, well not all of them but most.
And I expect this will carry on as long as IR stay low.
We could see a new bubble forming as soon as next year and I don't think anybody will be willing to stop it. The BOE will raise IR eventually, but by then inflation will be way over target.
Uncertain times ahead.

The thing about 0.5% rates I can totally see in helping prevent forced sales - but rates for 90% LTV ftbs are still around 5-6% aren't they? Not massively high by any means but not exactly low.

Opinion (here at least) seems divided between 1) rates are coming down helping more people into the market and 2) best takes advantage of the low rates while you still can

1984ReturnsForReal_2

StiflersMom wrote: »

... doubt it'll be six months.

Come February, we will see house prices picking up again at a good canter

Oct, Nov, Dec, Jan, Feb & I say March to...

Graham_Devon

the_ash_and_the_oak wrote: »

The thing about 0.5% rates I can totally see in helping prevent forced sales - but rates for 90% LTV ftbs are still around 5-6% aren't they? Not massively high by any means but not exactly low.

Yes, but may I put another "spin" on this.

After the problems we had with the banks, rates would always be high.

However, the rates FTB's expect now, are the same, and maybe even lower than the rates they saw in 2006, when the base rate was 5%ish.

For example, I was paying as a FTB in 2006, 5.5%. The same as a FTB now.

In 2007/8 when I came off my fix, I started paying closer to 7% (think it was 7.25%), I'm now paying 3.5%.

Now, if base rates were 3% instead of 0.5%, we would probably be seeing entry rates of 8% by now, if not more, in my opinion, as the same problems would still exist, and the banks would still need to make the same profit margin, we'd just have a slightly higher interest rate.

The only thing that's different now compared to the boom is the lack of credit, or should I say, the difficulty in getting credit. As 80% of FTB's are simply gaining deposits from their parents, even the deposit issue can often be put to the side.

the_ash_and_the_oak

Graham_Devon wrote: »

For example, I was paying as a FTB in 2006, 5.5%. The same as a FTB now.

this goes back to my earlier q. I don't really get why anyone would be particularly disillusioned by rises - but even less so if you own?

The only thing that's different now compared to the boom is the lack of credit, or should I say, the difficulty in getting credit. As 80% of FTB's are simply gaining deposits from their parents, even the deposit issue can often be put to the side.

80% of FTBs have deposits from their parents? really?

GDB2222

the_ash_and_the_oak wrote: »

1 and 2 are kind of the same point. They are high by historical standards because money is cheap by historical standards imo. The question might well be - is credit (at lets say 5%) cheap by the standards of the next 10-15 years?
3. I don't think this really is going to matter that much

Good point, nicely encapsulated - ie is 5% going to be the norm for the medium term?

On point 3, you need to bear in mind that the conservatives let rates get up to nearly 15% in the early 90's so as to get inflation under control. That was pretty hard-line, though.