Perfect storm for UK house prices

Flight2quality

Lots of foreign investors were horrified by the riots, they were worried about their expensive properties getting smashed up or burnt down.

As the pound sterling gets stronger compared to other currencies who are doing better in the race to the bottom, foreign investors will want out of London.

It does seem lots of factors are converging like the perfect house price crash storm. All this talk about relaxing planning permission and the influx of new homes being built around the country, on top of what the government has already promised to build.

Foreign investors selling up taking their money out of London just at a time when there are many new homes being built and added to the supply.

All this at the time when we are getting near to interest rates going back up, and an end to easy credit which we still have now. The auction houses will be full of repossessed properties of people who can only just afford the interest only now, before rates go back up.


On top of all this the cuts to housing benefit can not be postponed any longer and huge numbers are forced to move away from London to cheaper areas. Creating even more supply and even less demand.

It would be the perfect storm for UK house prices.

the_flying_pig

A true perfect storm would have one or more of higher rates, lower inflation, and more empty houses.

But if your question's just whether HPs will probably fall a bit from here then my answer's 'yes, probably'..

michaels

Is this one of those 'bull in disguise' posts where the OP lists all the things that might reduce house prices, none of which are actually happening?

Flight2quality

Some people still have their head firmly in the sand. More people worry about one, fiat currencies, two, sovereign debt and three, banks raising repayments. It would take very little to tip repayments over the edge to make a dramatic difference where many can't afford the repayments. People should fear banks raising repayments, even if base rate stays down here even longer that’s what I think they should fear.

At least if you fix now you can sleep well for the term of your fix, and hope you still have a job in a few years.

JonnyBravo

Flight2quality wrote: »

Some people still have their head firmly in the sand. More people worry about one, fiat currencies, two, sovereign debt and three, banks raising repayments. It would take very little to tip repayments over the edge to make a dramatic difference where many can't afford the repayments. People should fear banks raising repayments, even if base rate stays down here even longer that’s what I think they should fear.

At least if you fix now you can sleep well for the term of your fix, and hope you still have a job in a few years.

Such is your worry it's driven you to forget your old log in names eh? :eek:

Flight2quality

the_flying_pig wrote: »

A true perfect storm would have one or more of higher rates, lower inflation, and more empty houses.

But if your question's just whether HPs will probably fall a bit from here then my answer's 'yes, probably'..

So you are a bear! Welcome to the dark side

OptionARMAGEDDON

All this at the time when we are getting near to interest rates going back up, and an end to easy credit which we still have now.

Ha ha ha! You really think they are going to put rates up until everything is completely fixed? The reason they keep scaring people with stories of rates going up is so people go on fatter fixed rates (fatter for the banks) who need the capital at the moment. I however will be staying on my 1.99% above base fix. Rates could go down again before they go up.

Batchy

No one cares, if the mess gets dragged out, the happy people are the workers, the unhappy ones are the ones who cannot work, the other happy ones are the non workers.

What will change when this mess is sorted

Everyone will be happy as they are all working.
no one will be unhappy cause they can't work, as there will be an abundance of oportunities.
No one will be HAPPY not working as this will just no longer be an option for anyone where it is physically possible for them to work.

Then the mess will end...

But basically the mess will never go away, so make hay now, even thou the sun isnt shinning, the hay seems to still be coming regardless.

Too many people are hiding beneath their duvet playing XBOX or PS3... or on their Iphone... ive never seen so many unemployed people with Iphones before in my life... life must be good!

wymondham

Batchy wrote: »

Too many people are hiding beneath their duvet playing XBOX or PS3... or on their Iphone... ive never seen so many unemployed people with Iphones before in my life... life must be good!

I'm sure I read somewhere having an iPhone is now a human right? :rotfl:

OptionARMAGEDDON

BEARSvsBULLS wrote: »

You have no understanding of whats going on. Wait until everything is completely fixed? What are you smoking? Keeping interest rates too low for long is making this crisis worse and drags it out.

Yes you go on thinking they will sort this mess out while interest rates are so low :rotfl:

Its going to sort the mess out a lot quicker than bankrupting the banks with another load of defaults. Look what happened in Japan. The BOE are sh*t scared of deflation, it will kill for good any recovery.

If granny cant afford as much food, that is a price worth paying in their eyes. We went through a decade of underpaying for raw goods,due to the flood of liquidity into the market. All that is happening now is a correcting in some asset values and the upward recorrection of commodity prices. Petrol for example, in real terms, compared to disposable income and corrected for increased mpg of modern vehicles still costs less than what it did in the 80s. If we dont recover from this in a strong and sustainable way, then the UK is screwed.

This is an global overleverage issue. You dont recover from that by putting up rates, you can only deleverage by keeping rates low and scaring people into making overpayments.

The ECB are already regretting raising rates. The BOE are not going to make the same mistake.

Jimmy_31

Batchy wrote: »

No one cares, if the mess gets dragged out, the happy people are the workers, the unhappy ones are the ones who cannot work, the other happy ones are the non workers.

What will change when this mess is sorted

Everyone will be happy as they are all working.
no one will be unhappy cause they can't work, as there will be an abundance of oportunities.
No one will be HAPPY not working as this will just no longer be an option for anyone where it is physically possible for them to work.

Then the mess will end...

But basically the mess will never go away, so make hay now, even thou the sun isnt shinning, the hay seems to still be coming regardless.

Too many people are hiding beneath their duvet playing XBOX or PS3... or on their Iphone... ive never seen so many unemployed people with Iphones before in my life... life must be good!

I will let all the lads at work know that they should stop being so miserable earning a wage that will not cover the bills, come on lads were the happy ones:rotfl: