Do you think property prices will double in 10 years?

happenstance

D_e_n_i_s_e wrote:

i predict an average year on year growth of 3%

therefore a house worth £100,000 now would be worth £151,258 in 10 years.

So they'll stay the same when you take into account inflation?

Anyway the stock market tends to perform better, the media is to blame for this housing bubble and trying to make people believe that buying anything in anyway is a sure fire way to make a profit. it isn't.

meanmachine_2

The OP is being disingenuous, as they already have considerable experience of BTLing.

If the yield really is 8%, and in Greater London I find that difficult to believe, then it sounds like a reasonable investment.

What have house prices halving or doubling got to do with anything? They're completely outside of the OPs control.

If the investment stacks up now, then it's a good investment. If not, then it isn't.

I'd LOVE house prices to double in ten years, as that means we'll all have suddenly enjoyed massive wage inflation to pay for it, and then sky high interest rates to try to put a lid on it, which then leads to a house price crash.

See? Something doesn't add up there. You can't have a second housing boom without wage inflation to pay for it, and you won't get that because interest rates will rise to stop it. So where is all this money going to come from? Bulgaria? Do me a favour.

ashm1

Hi,

I don't think an independent Bank of England would let house prices run away like this. They have an inflation target to meet!

Just my thoughts!

Many thanks,

Ashley.

BobProperty

ashm1 wrote:

Hi,

I don't think an independent Bank of England would let house prices run away like this. They have an inflation target to meet!

Just my thoughts!

Many thanks,

Ashley.

An inflation target that doesn't include most things that relate to housing costs. From the National Statistics website:
"In terms of commodity coverage, CPI excludes a number of items that are included in RPI, mainly related to housing. These include council tax and a range of owner-occupier housing costs such as mortgage interest payments, house depreciation, buildings insurance, estate agents' and conveyancing fees."

Chichi_2

ashcarrot wrote:

Errmmm I dont think over the 10 year the property price will increase at all or by only a margin because of the over inflated prices currently.

What you need to be aware of is you could be getting 5.1% interest. Although your yield may be 8% you got to bear in mind the following

Finding Tennants
Estate Agent Fees
Stamp Duty
Legal Fee
Survey etc.
Damage and Maintenence
Void Periods
House Insurance.
Tax
Interest Rates & increases in it.
Mortgage Fee's

We have considered all this and there's still a profit to be made. It's exempt from stamp duty.

ashm1

BobProperty wrote:

An inflation target that doesn't include most things that relate to housing costs. From the National Statistics website:
"In terms of commodity coverage, CPI excludes a number of items that are included in RPI, mainly related to housing. These include council tax and a range of owner-occupier housing costs such as mortgage interest payments, house depreciation, buildings insurance, estate agents' and conveyancing fees."

Leave it to the market to correct ?


Kind regards,

Ashley.

EdInvestor

I'd have thought a 100% rise is quite possible - a 7%p.a target is not that demanding, though a 50% rise in a decade is probably more realistic in curent conditions.

Have a look at the housing stats at https://www.nationwide.co.uk

In Q4 1989 the average house cost 61,495, the peak of the last boom.Ten years later it was 74,638, +21%.

In Q4 1995, in the slump it was 50,930 and ten years later in 2005 it was 157,387 + 209%.

Rather a big difference isn't it?


Here's another 10 year average price cycle which tends to suggest the +100% idea may have legs::

q1 1983 26,307
Q1 1993 50,128
q1 2003 119,938

My own gut feel is that nationally price rises will be more gentle going forward than in the past.But all property is local and London has a lot of international buyer involvement and City bonus influence which makes its behaviour unique and more difficult to predict.

Chichi_2

movieman wrote:

Yes. Rents dropped in the last crash, and wages are dropping in many areas as jobs are outsourced to China or 'insourced' to cheap immigrants: for example, I've heard several people in the building trades saying they're being undercut up to 50% by Eastern European immigrants, so they can no longer charge as much as they used to.



Tell that to the Japanese: house prices there are much lower than they were 15 years ago in their last housing bubble.

Britain has an aging population and declining opportunities for the young to make a decent salary as more and more jobs are given to foreigners willing to work for a fraction of the cost. What makes you think that house prices will increase?

Yeh and when these Eastern European builders get fed up renovating and builiding extensions for us, they'll club together on their low salaries and buy the cheap rundown houses (cos they'll go down in 10 years as most on this forum seem to think) and they'll renovate them and sell them on at a profit.

Chichi_2

movieman wrote:

Yes. Rents dropped in the last crash, and wages are dropping in many areas as jobs are outsourced to China or 'insourced' to cheap immigrants

Not all jobs can be outsourced you know as language proficiency is rated very highly in this country.

In the profession I'm in, I've not seen a Chinese or Polish person doing it!!!!

Hereward

Chichi wrote:

Not all jobs can be outsourced you know as language proficiency is rated very highly in this country.

In the profession I'm in, I've not seen a Chinese or Polish person doing it!!!!

I seem to recall that in the early 20th Century farm workers said that about sugar beet harvesting as it was too difficult to get a machine to pull the beet out of the ground and then chop the leaves off in one go. Now, virtually all sugar beet is harvested my machine: just because you haven't seen it happen, or it hasn't happened yet, doesn't mean that it won't!