Financial Times "Looks like a bubble ready to burst"

purch

chewmylegoff wrote: »

Does one opinion constitute a consensus these days?

No, but for the feeble minded one opinion can always become fact !!!

mayonnaise

lukeh23 wrote: »

Consensus seems be something will give after the next election

Yes, some on here would agree with that.

brit1234 wrote:

These low interest rates are just delaying the problem, I wonder if someone wants it delayed to after the next election. House prices will return to normal values, the number of cash buyers are running out no matter now much the vested interest groups talk the market up.

http://forums.moneysavingexpert.com/showpost.php?p=23808979&postcount=31

brit1234 wrote:

The game is over its time to take the pain and get onto recovery rather than delay it to after the next election as they are doing.

http://forums.moneysavingexpert.com/showpost.php?p=24884641&postcount=3

JamesSmith2000

chewmylegoff wrote: »

Does one opinion constitute a consensus these days?

good point, I mean this forum is full of opinions like house prices will never come down at all, they will keep going up with no corrections forever.

Losing_the_way

PasturesNew wrote: »

House prices aren't linked to earnings because so many people are buying multiple homes, homes for cash ..... BOMAD/grandparents, cash gifts .... an increasing amount of "not income related" sources of funds.

According to Mark Carney's answer to Jennifer Ryan, Bloomberg News

"on cash purchasers. I mean, in
the most recent data it moved a bit, but the volume
transactions on cash* purchasers is about 3%, value is about
8% in London."

*Editor’s note: volume of transactions of foreign purchasers (not cash)

From the last Financial Stability Report, page 3.

http://www.bankofengland.co.uk/publications/Documents/fsr/2014/conf140626.pdf

mayonnaise

lukeh23 wrote: »

I also believe we can't rule out a correction, and correction is needed

JamesSmith2000 wrote: »

good point, I mean this forum is full of opinions like house prices will never come down at all, they will keep going up with no corrections forever.

Maybe you guys missed it, but we had a correction in '08-'09.

danothy

TickersPlaysPop wrote: »

in line with the triple dip prediction

Have we even got to a double dip yet? I thought that the revised figures confirmed that there was no second round of recession.

antrobus

danothy wrote: »

Have we even got to a double dip yet? I thought that the revised figures confirmed that there was no second round of recession.

Correct.

Meanwhile, back in the real world;

Construction sector takes on staff at record pace in June
http://www.telegraph.co.uk/finance/economics/10940139/Construction-sector-takes-on-staff-at-record-pace-in-June.html

British car industry adds 44,000 jobs to employ 750,000
http://www.telegraph.co.uk/finance/newsbysector/industry/10938527/British-car-industry-adds-44000-jobs-to-employ-750000.html

Even Ocado is about to declare a profit for once.:)

mayonnaise

antrobus wrote: »

Correct.

Meanwhile, back in the real world;

Construction sector takes on staff at record pace in June
http://www.telegraph.co.uk/finance/economics/10940139/Construction-sector-takes-on-staff-at-record-pace-in-June.html

British car industry adds 44,000 jobs to employ 750,000
http://www.telegraph.co.uk/finance/newsbysector/industry/10938527/British-car-industry-adds-44000-jobs-to-employ-750000.html

Even Ocado is about to declare a profit for once.:)

Construction, car manufacturing...not the lowest paid jobs then.
I can imagine those people will want to buy a house or upsize at some point...that will put upwards pressure on house prices.

I can also imagine the usual suspect on here will still blame HTB

dktreesea

AndyGuil wrote: »

I'm not sure price to average earnings is the correct measure to look at. Price to average earnings for buyers is more appropriate and is currently around 3.4.

Yes, especially given the point that low to middle earning households have been forced out of the market.

I would have thought this bodes well for the larger buy to let investors who presumably would be targetting the frustrated would be buyer to tenant their properties. But the guy being interviewed seems to think that once interest rates start to rise, this group could be in trouble, faced with very low yields and unable to unload their properties at a profit because they have paid too much for them in the first place.

It will be interesting to see if that comes to pass. According to http://www.financialreporter.co.uk/view.asp?ID=15528, BTL lending financed 16,200 home in April 2014, 8,400 of these being to buy houses as opposed to remortgaging existing BTL properties, and this is 49% up on last April.

They make the point that the BTL market is underpinned by a shortage of affordable homes to buy. Or to rent for that matter, given the lack of new build social housing in the past decade or two. I don't see that changing. Yes, Osborne goes on about his new garden cities he is planning, but will those houses be cheap enough for people currently forced to rent to be able to buy them? Probably not for the vast majority of renters.

As to building affordable housing, who exactly is expected to be able to afford such housing? London's mayor was recently going on about the 78,000 affordable homes built in London during his tenure. Were any of these available to buy, given his definition of affordable was able to be rented at 65% of the average market rent for the area?

I thought the whole point of affordable housing was to enable low and middle income earners to be able to afford to buy a property, not to still not even be able to afford to rent it?
http://www.lbc.co.uk/boris-forced-to-defend-affordable-housing-at-state-of-london-debate-92770

There's new "affordable housing" available for rent a mile away from us (so still inner city, close to all amenities etc) up here in Edinburgh. https://hillcrest.org.uk/Northern+Housing/Property+Search/
£770 a month for a 2 bedroom place. They are nice enough flats and the housing association claim they are available for single people earning up to £28k a year and families earning up to £36k a year. Even on £28k a year, is £770 a month on an after tax salary of £1,797 a month really "affordable"? What's "affordable" about having to pay 43% of your after tax income on rent?

Graham_Devon

dktreesea wrote: »

£770 a month for a 2 bedroom place. They are nice enough flats and the housing association claim they are available for single people earning up to £28k a year and families earning up to £36k a year. Even on £28k a year, is £770 a month on an after tax salary of £1,797 a month really "affordable"? What's "affordable" about having to pay 43% of your after tax income on rent?

Thing with these places is that usually the rent goes up in line with RPI too, so it becomes less and less affordable as the years pass, unless you get wage rises above RPI, which would seem unlikely looking at the past few years.

Often they are more a trap than helpful.