My perspective as a "bear"...

Loughton_Monkey

Phew!!!!

Glad we got that off our chests are we? Only the 42nd post and you've used up most of the page. Think they ought to charge you extra for that.

[Edit: What happened to the tedious post I complained about? It's gone! Not that I'm complaining.]

HAMISH_MCTAVISH

mcc100 wrote: »

Trying to portray all bears as wanting to see people on the streets ???

And how do you expect a crash to happen without seeing people on the streets?

A crash (or significant price adjustment, if you prefer) cannot happen in isolation.

It requires mass forced selling, which can only happen with recession, increasing unemployment, reposessions, etc.

If you wish for lower prices, then you wish for the misery that goes along with it. There is no other choice.

treliac

HAMISH_MCTAVISH wrote: »

And how do you expect a crash to happen without seeing people on the streets?

A crash (or significant price adjustment, if you prefer) cannot happen in isolation.

It requires mass forced selling, which can only happen with recession, increasing unemployment, reposessions, etc.

If you wish for lower prices, then you wish for the misery that goes along with it. There is no other choice.

That's strange thinking. Were you around in the early 90's?

HAMISH_MCTAVISH

treliac wrote: »

That's strange thinking. Were you around in the early 90's?

In the early 90's, prices fell by just 13% on average.

Then stagnated for years as wages caught up.

That crash mostly only happened in "inflation adjusted" terms.

Expecting a crash in actual prices of 25%, 35%, 50%....... Without utter economic and social devastation?

Impossible.

Graham_Devon

HAMISH_MCTAVISH wrote: »

And how do you expect a crash to happen without seeing people on the streets?

A crash (or significant price adjustment, if you prefer) cannot happen in isolation.

It requires mass forced selling, which can only happen with recession, increasing unemployment, reposessions, etc.

If you wish for lower prices, then you wish for the misery that goes along with it. There is no other choice.

And if you wish for boom, you wish for bust, which means you wish for all of that too.

Everyone knows house prices can't just keep accelerating. I know, I know, you blame the lenders for not lending enough, not the actual prices of the houses.....but they WERE lending enough, which inevitably led to bust.

Either way, wishing on a boom, basically means you are wishing on all of what you describe.

You simply do not get a bust, without boom.

Personally think theres an overuse of the word "crash". It's only really those wanting to see prices rise which use the term. Everyone else says falling prices. The two are different.

People can bang on warning others that they wont get a "crash". Means nothing, falling prices will be just fine, thanks. Don't really want a crash.

Generali

tomterm8 wrote: »

You'll have to give me more detail on what demographic factors you think will effect really long term house prices.

Perhaps I don't mean demographics but I describe myself as a long term bear, especially on SE England house prices. This is the theory that I signed up to MSE in order to come up with. Basically I wanted to find out as much as I could about the house market in order to find out if the below is wrong. The more I've learned, the more right I think I am.

The reason is because people (baby boomers and The Greatest Generation) have been sold a lie about pensions and are going to end up with a lot less than they expect in retirement. The defaults have already started (raising the retirement age, removing the connection between wages and pensions, changing the index link to CPI from RPI) and they will become more aggressive as of necessity.

Look at the cost of the unfunded liability that the Government has, add on the pension shortfall and add to that the fact that pension funds will most likely be net sellers of assets all at the same time and tell me the above is wrong. You can argue the arcanery of discount rates and so on but even if you halve the unfunded liabilities you still end up with an amount that is utterly unaffordable.

As a result many people, especially those in the South East, will find themselves living in what they consider to be poverty in a house worth hundreds of thousands of pounds. If they move 200 miles south to France or 200 miles north or even just to a small flat then they can realise a goodly chunk of that capital. It is hardly financial engineering of the Buffet standard to work out that if you have a massively valuable asset and a low income then cashing in that asset may well be the way forward.

Graham_Devon

Generali wrote: »

Perhaps I don't mean demographics but I describe myself as a long term bear, especially on SE England house prices. This is the theory that I signed up to MSE in order to come up with. Basically I wanted to find out as much as I could about the house market in order to find out if the below is wrong. The more I've learned, the more right I think I am.

The reason is because people (baby boomers and The Greatest Generation) have been sold a lie about pensions and are going to end up with a lot less than they expect in retirement. The defaults have already started (raising the retirement age, removing the connection between wages and pensions, changing the index link to CPI from RPI) and they will become more aggressive as of necessity.

Look at the cost of the unfunded liability that the Government has, add on the pension shortfall and add to that the fact that pension funds will most likely be net sellers of assets all at the same time and tell me the above is wrong. You can argue the arcanery of discount rates and so on but even if you halve the unfunded liabilities you still end up with an amount that is utterly unaffordable.

As a result many people, especially those in the South East, will find themselves living in what they consider to be poverty in a house worth hundreds of thousands of pounds. If they move 200 miles south to France or 200 miles north or even just to a small flat then they can realise a goodly chunk of that capital. It is hardly financial engineering of the Buffet standard to work out that if you have a massively valuable asset and a low income then cashing in that asset may well be the way forward.

One of the most forward looking, well researched posts I think I have ever seen.

treliac

Generali wrote: »

The reason is because people (baby boomers and The Greatest Generation) have been sold a lie about pensions and are going to end up with a lot less than they expect in retirement. The defaults have already started (raising the retirement age, removing the connection between wages and pensions, changing the index link to CPI from RPI) and they will become more aggressive as of necessity.

Look at the cost of the unfunded liability that the Government has, add on the pension shortfall and add to that the fact that pension funds will most likely be net sellers of assets all at the same time and tell me the above is wrong. You can argue the arcanery of discount rates and so on but even if you halve the unfunded liabilities you still end up with an amount that is utterly unaffordable.

As a result many people, especially those in the South East, will find themselves living in what they consider to be poverty in a house worth hundreds of thousands of pounds. If they move 200 miles south to France or 200 miles north or even just to a small flat then they can realise a goodly chunk of that capital. It is hardly financial engineering of the Buffet standard to work out that if you have a massively valuable asset and a low income then cashing in that asset may well be the way forward.

I agree. It's been looking this way for quite a while. We have already helped my mum to pay for much needed maintenance to her house and she has refused to move which in truth, because she loves where she is, would probably ruin her quality of life.

However, in order to sell up and realise that capital, there has to be a sufficient number of people willing and able to buy those higher priced properties.

macaque_2

HAMISH_MCTAVISH wrote: »

And how do you expect a crash to happen without seeing people on the streets?

A crash (or significant price adjustment, if you prefer) cannot happen in isolation.

It requires mass forced selling, which can only happen with recession, increasing unemployment, reposessions, etc.

If you wish for lower prices, then you wish for the misery that goes along with it. There is no other choice.

When house prices rise above sustainable levels of affordability, a correction becomes inevitable. Whilst any correction puts people on the street, the longer it takes to arrive, the more people it puts on the street (in the end).

House price booms not only cause homelessness when the correction arrives but they also cause financial hardship for many people in the mean time (especially younger people). Many young people today suffer severe financial hardship. Not least of this is linked to the cost of housing.

The UK government has bankrolled property interests over the last 3 years at the cost of severe financial hardship to many people living on fixed incomes and to the detriment of generations to come.

As the price correction develops, people will lose their homes. When that happens however there will be no fewer houses in the UK, just vested interests clawing back their assets. In many cases, such activities will fall little short of moral blackmail. If the lenders and property owners really care about homelessness, they would reduce their expectations on rent, house prices and mortgage rates.

StevieJ

Generali wrote: »

The reason is because people (baby boomers and The Greatest Generation) have been sold a lie about pensions and are going to end up with a lot less than they expect in retirement. The defaults have already started (raising the retirement age, removing the connection between wages and pensions, changing the index link to CPI from RPI) and they will become more aggressive as of necessity.

I thought they were restoring the wages/pensions link with the triple lock/guarantee, having said that an earnings link at the moment may not something to look forward to when losing a link to RPI.

The Government's support for pensioners remains absolute. The Budget affirms the commitment to a triple guarantee for pensions, meaning the basic State Pension will be uprated by the highest of the price index, earnings or 2.5%. We will ensure that the basic State Pension will go up in line with RPI for next year if that is higher than all of the three other elements.