UK Property - Buy before it's too late?

JoeK_3

Guy_Montag wrote: »

According to the Irish Mail on Sunday prices have dropped in Ireland by 20% in 6 months. So all hope may not be lost.

There had to be a correction at some stage as they have seen a massive increase in property prices since joining the euro. In comparison to Eire the UK is in a dip on property prices.

Buy now as prices are cheap in the Uk.

JoeK

Guy_Montag

JoeK wrote: »

There had to be a correction at some stage as they have seen a massive increase in property prices since joining the euro. In comparison to Eire the UK is in a dip on property prices.

Buy now as prices are cheap in the Uk.

JoeK

an annualised fall of 40% is some "correcrtion" were that to happen in the UK we would see the average price fall from 185k to 111k.

Bit desperate for work are we?

MortgageMamma

I doubt JoeK could be desperate for work Guy Montag, he owns at least four companies that I've seen so far

ManAtHome

JoeK wrote: »

When UK eventually joins the euro, our interest rates will be aligned with the rest of Europe at 3.5%.JoeK

..and rising. Also, we may have to harmonise our property taxes (no CGT exemption, property/wealth taxes around 1% of capital value etc).

And/or be stuck in an exchange rate/interest rate mechanism which works for countries without massive trade imbalances, where "government borrowing" includes off-balance-sheet items like PFI. Hmmm, think the UK would be a bit behind Italy on the new conditions.

But I'm sure you could all live with a 25% rise in overall taxation to balance the books out of your 1% mortgage savings...

JoeK_3

Guy_Montag wrote: »

an annualised fall of 40% is some "correcrtion" were that to happen in the UK we would see the average price fall from 185k to 111k.

Bit desperate for work are we?

You are missing the point completely.

What happens when interest rates are reduced? The money supply is increased to the consumer and a feeling of wellbeing is spread across the population. This uphoria is then spent buying property and improving everyones standard of living.

Supply and demand.
A simple case of economics.

Sorry if the thread has given you the wrong message.

See you in ten years time somewhere in Eire over a pint of guiness.

Regards
JoeK

UK007BullDog

I dont know, in the end the incomes of the average Joe will decide the property prices. Once people can no longer buy the prices will stagnate and even fall. its already happening in certain areas in the UK (Not London), unless the banks are willing to give 12x plus income multiples.

Reading some financial stuff from foreign websites it seems that in Spain the housing crash has started. People are desperate to leave and move into the cheaper Balkans market for retirement purposes as their western euro pensions have more value there.

And look at japan, they have still not recovered very well.

Like MM says, what goes up will come down eventually.

Lets see what the next rate rise will do next month.

Guy_Montag

JoeK wrote: »

You are missing the point completely.

What happens when interest rates are reduced? The money supply is increased to the consumer and a feeling of wellbeing is spread across the population. This uphoria is then spent buying property and improving everyones standard of living.

Supply and demand.
A simple case of economics.

Sorry if the thread has given you the wrong message.

See you in ten years time somewhere in Eire over a pint of guiness.

Regards
JoeK

The way I see it - it would be too unpopular for the UK to join the Euro, anytime in the next parliament anyway. So this is going to happen in not less than five years, which is plenty of time for the UK HPI to go into reverse.

However, assuming we join the Euro tomorrow our economy would have a fairly large weighting on the ECB decisions. We would be the second biggest economy in the Eurozone & therefore exert upward pressure on their interest rates (which are rising anyway). It would not take long before IRs are the same as they are now. Only the ECB wouldn't give a f'k if they burst the house price bubble & might have been more responsible about inflating it in the first place to avoid a small recession.

JoeK_3

it's all a matter of opinion anyway.

What's betting on a conservative pro euro parliament in a few years?

Like I said, it's all conjecture but I'm buying now for the long term.

See you in ten years time somewhere in Eire over a pint of guiness.

Regards
JoeK

MortgageMamma

I have a very simplistic view of things

BBR increases. overstretched affordabilty. inflation. Increase in tax for average earners. Surely they can only come down?! Most people have affordability issues right now, there are increased respossions, more people entering bancruptcy and IVAs - as a nation we are already pushed to our limits, HOW CAN we withstand house prices becoming higher?

JoeK_3

MortgageMamma wrote: »

I have a very simplistic view of things

BBR increases. overstretched affordabilty. inflation. Increase in tax for average earners. Surely they can only come down?! Most people have affordability issues right now, there are increased respossions, more people entering bancruptcy and IVAs - as a nation we are already pushed to our limits, HOW CAN we withstand house prices becoming higher?

The rate increase next month will stabilize the Uk property market and things will cool on the economic front. We are already seeing a massive reduction in credit take up and the repossession problems currently being experienced are as a result of a massive credit card spree some five years ago, when interest rates were at an all time low.

The Bank of England are taking big steps to slow inflation down and we may even see a 0.5% base rate increase.

JoeK