The property boom is well underway now.

HAMISH_MCTAVISH

Rinoa wrote: »

Not sure that I've seen any bull forecast huge price increases indefinitely.

Most 'bulls' on here just don't think there will be another crash ~ with perhaps modest rises in line with wages.

Initially, yes. We are after all at the start of a house price cycle, where prices tend to rise more slowly, not in the boom phase twards the end of one.

The mainstream forecast for prices from here is for 40% appreciation over the next 10 years in real terms. Which is far slower than the last 10 years, but still healthy.

stueyhants

HAMISH_MCTAVISH wrote: »

Initially, yes. We are after all at the start of a house price cycle, where prices tend to rise more slowly, not in the boom phase twards the end of one.

The mainstream forecast for prices from here is for 40% appreciation over the next 10 years in real terms. Which is far slower than the last 10 years, but still healthy.

So is that 40% rise above wage growth ? If that's the case how do you propose its funded ... buyers paying a higher % of their income on mortgage payments ? You can't rely on IR coming down to soften the increase in mortgage debt.

nollag2006

HAMISH_MCTAVISH wrote: »

The mainstream forecast for prices from here is for 40% appreciation over the next 10 years in real terms. Which is far slower than the last 10 years, but still healthy.

I would agree with that synopsis. Runaway inflation is no good to anyone, but 3-5% per annum is about desireable, as it would keep price rises broadly in line with wage growth and just ahead of RPI.

Unlikely though - history tells us that prices will sky rockets in 10 - 12 years time, followed by a correction of up to two years (latest one was Q3 2007 to Q1 2009)

treliac

nollag2006 wrote: »

history tells us that prices will sky rockets in 10 - 12 years time, followed by a correction of up to two years (latest one was Q3 2007 to Q1 2009)

Unless there's some learning from history. It's such bad news for those caught out by buying at the top... takes such a long time to recover from negative equity and affects life plans and hopes.

buglawton

The mainstream forecast...

Well an increase like that with higher mortgage payments taking a larger percentage of earning by 40% would mean a predicted muh lower standard of living and less actual living space per person in UK than now.

I'm already half-planning to sell up & move to a nice European suburb on retirement.Actually I don't believe such a 40% figure for one minute, it has a motive behind it of course. But if such a thing were to come to pass then I'll be off to where property prices are 30% of the UK's (not 30% less - 30% of) - not in the sticks but in well infra-structured modern place.

Perhaps at next election we should not be voting Lab, Con or Lib but for the house-us-properly party?

HAMISH_MCTAVISH

treliac wrote: »

Unless there's some learning from history. It's such bad news for those caught out by buying at the top... takes such a long time to recover from negative equity and affects life plans and hopes.

See this is a perspective I don't agree with.

Negative equity is irrelevant to most people, as most owners only move every 15 years or so. I think 3 times in a lifetime is the average..... So it only impacts the tiny minority who unexpectedly have to move. Everyone else can afford to wait until they make the gains they want, which of course reduces supply, and drives prices back up quicker.

As for boom/bust, everybody ends up at more or less the same place in the end.

For example the house I bought in 1990 has appreciated by 400%. If I had waited a few years, and got it for 10% less, my gain would be more like 410%. But I'd have to offset the few years rent costs against the extra 10%.

It's so small a difference as to be utterly meaningless over the long term.

treliac

HAMISH_MCTAVISH wrote: »

Negative equity is irrelevant to most people, as most owners only move every 15 years or so. I think 3 times in a lifetime is the average..... So it only impacts the tiny minority who unexpectedly have to move. Everyone else can afford to wait until they make the gains they want, which of course reduces supply, and drives prices back up quicker.

It's so small a difference as to be utterly meaningless over the long term.

Not at all. A good number of my friends were caught out in the 90s HP crash (bro-in-law for one). Set them back a great deal. Plans for the future, starting/increasing families all impossible to fulfil as they weren't able to move, as previously planned, from starter homes.

Pobby

Hmmmm. Interesting. So 2 huge stock market crashes within a decade. Government debt and personal debt at a premium. A white wash on inflation. Job losses. Low wage inflation.

The crowning glory is an emergency interest of 0.5% and all you lot talk about HPI. What really is your problem?

Harry_Powell

Pobby wrote: »

Hmmmm. Interesting. So 2 huge stock market crashes within a decade. Government debt and personal debt at a premium. A white wash on inflation. Job losses. Low wage inflation.

The crowning glory is an emergency interest of 0.5% and all you lot talk about HPI. What really is your problem?

What's your problem with people talking about whatever they like on an internet forum? Did Martin hand over ownership of his website to you?

If you don't want to talk about house prices, then why are you on this particular board? Or do you only want to talk about prices falling, not rising?

Pobby

Harry_Powell wrote: »

What's your problem with people talking about whatever they like on an internet forum? Did Martin hand over ownership of his website to you?

If you don't want to talk about house prices, then why are you on this particular board? Or do you only want to talk about prices falling, not rising?

Not that I need to explain anything to you as no doubt, as is your way, will read into it what you will. It`s this endless one way deal that certain people argue when it comes to house price inflation. As if house prices are decoupled from the wider economy. I don`t think so.