The UK Housing Bubble yet to Burst: FT Video

tommy75

nollag2006/Hamish (same person?) will be along soon with some info from an estate agent on why the average property price will be half a million over the next five years due to supply and demand.. Haha, you pesky first time buyers, take that!

doire_2

tommy75 wrote: »

nollag2006/Hamish (same person?) will be along soon with some info from an estate agent on why the average property price will be half a million over the next five years due to supply and demand.. Haha, you pesky first time buyers, take that!

You forgot to add nollags arguement to kill all arguements......

"you alll mised the boat. Oh well you will have to wait another 14.5 years for the next crash"

Really2

He is wrong though house prices never went back in the last crash to the 3.5X multiple (which some say is the long term average)

In 1993 the lowest point of the last crash nominal house prices were £50,128.

The closest I can get on average wage is 1997 which is £13,982. Wage growth around that time was 4% so if you take 4% off 4 X = £11,875.

So the average house would have had to of been £41,564.

So it would not be the only time a bubble has not returned to 3.5X average wage. It did not the last bubble.

GDB2222

According to Halifax, the low point in the previous crash was: October 1995. The average house price was £61,251. The average earnings was £19,796, and the ratio was 3.09.

They use average earnings for a male in full-time employment. If you included people in part-time employment etc, you'd have a lower average earnings figure and a higher ratio, ofc. The important thing is to be consistent.

http://www.lloydsbankinggroup.com/media1/research/halifax_hpi.asp

chucky

mbga9pgf wrote: »

I reckon 20% off will do it.

it won't be happening any time soon - it took banks collapsing, stock markets crashing, unemployment increasing and the starvation of credit to get 20% off.

none of that is going to happen now, there are too many markers in place to prevent this.

i wouldn't discount 20% off in real terms but even that is at a stretch of anyones imagination

Blacklight

mbga9pgf wrote: »

I reckon 20% off will do it.

Then everyone that has bought a property since 2006 will be in negative equity. But then that's what you want isn't it. How very nice and selfish of you. At least you'll be able to get you ten bedroom Georgian townhouse in Notting Hill for next to nothing, just like you personally deserve.

Do you honestly think anyone will sell with a debt of 20% more than the worth of the asset? Do you honestly think that anyone will sell with the knowledge of the level that prices can, and have, risen to and would rise to again?

The market would come to a standstill just like the one we're coming out of.

StevieJ

Blacklight wrote: »

Then everyone that has bought a property since 2006 will be in negative equity. But then that's what you want isn't it. How very nice and selfish of you. At least you'll be able to get you ten bedroom Georgian townhouse in Notting Hill for next to nothing, just like you personally deserve.
.

To be fair he has already bought along with Schiff, Geoff and Webb from Moneyweek, I wonder where !!!!!! bought in the end.

Really2

GDB2222 wrote: »

According to Halifax, the low point in the previous crash was: October 1995. The average house price was £61,251. The average earnings was £19,796, and the ratio was 3.09.

They use average earnings for a male in full-time employment. If you included people in part-time employment etc, you'd have a lower average earnings figure and a higher ratio, ofc. The important thing is to be consistent.

http://www.lloydsbankinggroup.com/media1/research/halifax_hpi.asp

But then how often is the male full time wage used on here to compare house prices.;)
But then you could argue changing times how often is a house purchased on one wage now? so in reality is 3.5X male wage actually even relevent any more (and before someone says children most women go back to do some kind of work after having children)

mbga9pgf

Blacklight wrote: »

Then everyone that has bought a property since 2006 will be in negative equity. But then that's what you want isn't it. How very nice and selfish of you. At least you'll be able to get you ten bedroom Georgian townhouse in Notting Hill for next to nothing, just like you personally deserve.

Do you honestly think anyone will sell with a debt of 20% more than the worth of the asset? Do you honestly think that anyone will sell with the knowledge of the level that prices can, and have, risen to and would rise to again?

The market would come to a standstill just like the one we're coming out of.

I exchange this week you pillock

People will sell because they have to, the government cant afford to prop up the market any longer.

You are forgetting, people dont sell at times like this because they want to. They will sell because Petrol will be costing 1.50 a litre, they have just fallen off the SMI scheme and need to sell. Get enough people selling with such low demand and you have significant price falls.

GDB2222

Well, if you are going to use average wages of some other type, do you include part-timers? the unemployed? Retired people?

I don't know what's truly realistic, but for sure if you use some other definition you can't compare your figures with the Halifax, and you're quite likely to get a higher ratio.