Property !!!!!! A Nation Hypnotised? Blog Discussion

vishpatel

ReportInvestor wrote:

Since 2001, it has done, yes. You don't even need to turn on your calulator to see that.

The tide may or may not be starting to turn. I haven't got the figures to hand for that.

So what matters to someone making a decision now? What happened between 2001-2006, or what is happening now & going forward?

vishpatel

ericthekidstoner wrote:

it'd be interesting to see when the over-correction will happen. so far it's been an under-reaction which says to me that despite the efforts of the banks etc., public sentiment and belief is still favouring a continued rise

what efforts?

It is in the interest of the goverment to keep the public in debt, so they have to work hard, and drive economic growth.

It is in the interest of the banks to issue more mortgages, so long as a decent percentage of them are being repayed.

As you say, the ultimate test is whether the economy keeps going when growth inevitably slows. Goldilocks anyone?

ericthekidstoner

vishpatel wrote:

what efforts?

reporting low predictions

vishpatel

ericthekidstoner wrote:

reporting low predictions

For every bank (?) forecasting a slowdown, there is probably another forecasting the opposite.

What matters is the publics appetite for debt.

ericthekidstoner

i agree

most - if not all - of the leading lenders have predicted low single figure annual growth for house prices this year: Nationwide, Halifax etc.

ReportInvestor

I did think, for a short while, that the availability on the net, to all interested parties, of actual house price sales in the previous quarter - based on hard Land Registry figures, as opposed to the EAs' hyped offer prices, would put a break on the market.

But that obviously hasn't done the trick .

Perhaps other factors are at work?

Martinslovechild

Here's the graph showing that we're currently 38% over the long-term trend for house prices in the UK



Now if there's anybody out there who'll tell me this is sustainable in the long-term, I'll eat my hat. A climb up to 2009-2010 and then a massive fall from 2010-2015? Now that's more like it...

navelgazer

Martin is quite right when he says housing markets can crash. But some historical and statistical facts need factoring in to the discussion.

Housing markets do crash from time to time and usually create misery and mayhem in their wake.

Home ownership is not a right and has only been viewed as such by the majority of the population for the past twenty years or so in the UK.

It is usually high interest rates that cause the problems with housing market.....If you cant afford to buy, the chances are others can't either and so the balance in supply and demand is affected. Affordable property/ loans pushes demand up, supply decreases and prices rise.

That all being said, if you take a look at the index of prices over the past 7 decades (see table 2) you will see that property over the past 70 years, has consistently risen in price (often doubling or better every decade). Property IS as safe a long term bet that you can make BUT, like all investments, they can be wiped out by short term problems OR major economic/ world events that happen from time to time.

As an estate agent, you might expect me to say that but my company was the first and remains the only estate agency in the UK to use plain english campaign approved language in our contracts and we pride ourselves on honest, open and frank advice. In short, buying a house carries risks but can also offer major rewards...as long as you can afford to take a long term view and cover any major interest rate rises over the period of the mortgage!

I always advise my clients that they are buying a home, not an investment but, if it turns into an investment over time that they might be able to realise the value of when the children have left home and they downsize; then so much the better. Good luck!

rizla01

Well!

For my tuppenyworth.

NO ONE EVER GOT WEALTHIER MERELY BY RENTING!

Historically, some homeowners were unlucky but most have done very well out of homeownership.

We will always get 'Blips' but overall - property goes UP!

Chrysalis

I think not many people will argue the point over long term houses go up in value, the argument is, is it a good time to buy during a boom. People out there advising people to buy when its clear at some point their has to be another dip and that will be the best time to buy not now.