Experts take cautious view on rising house prices

macaque_2

House prices to fall for five years, warns thinktank

http://www.cityam.com/news-and-analysis/house-prices-fall-five-years-warns-thinktank

chucky

that's real house price drops and not actually an actual nominal house price drop.

it's just going to mean that FTB's are going to find it tougher and tougher to get onto the property ladder...

JonnyBravo

chucky wrote: »

that's real house price drops and not actually an actual nominal house price drop.

it's just going to mean that FTB's are going to find it tougher and tougher to get onto the property ladder...

Disagree. Wages are starting to increase and will (IMO) continue to accelerate.
Houses will be cheaper, but not massively so.
(who cares about nominal? if wage inflation is zero then nominal=real and it might matter but wage inflation>0)

chucky

JonnyBravo wrote: »

Disagree. Wages are starting to increase and will (IMO) continue to accelerate.
Houses will be cheaper, but not massively so.
(who cares about nominal? if wage inflation is zero then nominal=real and it might matter but wage inflation>0)

nominal prices will/probably increase by less than inflation. you don't need 100% of people getting pay rises for nominal prices rises.

nominal is the £ in your bank account for the deposit. inflation > than the rate it increases then the percentage of that deposit vs house price is smaller so LTV needs to higher. higher LTV = higher mortgage rate.

also, with wage increases less than inflation rate less than wage increases. disposable income to create a deposit is harder.

tartanterra

House prices to fall for five years, warns thinktank


Well, if this is true at least it's good news for all those prospective LL's waiting to dip their toes into the BTL market....:)

System

“Also, interest rates will have to return back to around five per cent at some point,” added NIESR’s chief economist Ray Burell.

Doesn't sound like the sort of comment a chief economist would say.

geneer

chucky wrote: »

that's real house price drops and not actually an actual nominal house price drop.

it's just going to mean that FTB's are going to find it tougher and tougher to get onto the property ladder...

Missed the part where real house price falls are bad for the bears.
Real falls is not stagnation. The majority of the 90's crash was of course real.

chucky

geneer wrote: »

Missed the part where real house price falls are bad for the bears.

who cares about 'bulls' or 'bears. these 'bears' are bunch of no hopers who post on various internet forums trying to talk the housing market down anyway.

Herbie_Hancock_I_wish

chucky wrote: »

who cares about 'bulls' or 'bears. these 'bears' are bunch of no hopers who post on various internet forums trying to talk the housing market down anyway.

Now that is odd Chucky , I have a property , nowt owed on it . A bunch of other friends in the same place yet we are bears . How long can we carry on at 0.5% interest ? It is like a bandage covering a huge wound . I do not believe inflation is as stated . As an intelligent bloke , I sure you agree that the increase in house prices during the last bubble was a house ( excuse the pun ) built on sand .

Of course the bank rate is held . Imagine if it returned to the the average

http://news.bbc.co.uk/2/hi/business/7818717.stm

There is a graph there . Now imagine if we returned to a level that was the average , methinks about 8% . In a selfish way I would love it as someone who right now is out of work after 40 years of grafting.

Do you believe that inflation is as published or indeed wages are rising .

The government are up to their eyeballs in debt , the tax payer bailed out the greedy lenders , yet the bosses still demand daft bonuses . Pratty boy from Northern Wreck gets a stupid pay out for being a miserable failure .

Rents being as high as they are , more darn benefits to pay out . Frankly , I think that we are in a mess . The Thatcher experiment screwed up . Buy a house and we will have 3 million unemployed within a few years , unable to pay for their homes .

Well sooner or later the props will have to be taken away . I just hope a sense of reality returns .

purch

Doesn't sound like the sort of comment a chief economist would say

Yes a (Chief) Economist would always say..

“Also, interest rates might return back to around five per cent at some point, or they might not” :eek: