'We've reached a tipping point' Signs of house price weakness

Blooloo

ukcarper wrote: »

Long term I can't see any circumstances where renting would be cheaper. Short term or if you need to move on regular basis then yes. Crashy's tell us he has spent £81k over the last 17 years the interest on mortgage over the same period would have been £35k .

do you have a link to these figures please.

most people move up a ladder...

Bubble_and_Squeak

really good thread! enjoyable read.

in answer to the title of the thread i feel that the tipping point in london was reached in april with the introduction of mmr. since then several factors have come into play. the crisis in ukraine has slowed russia money coming into prime london and chinas property bubble looks like it has popped (i'm assuming this is "bad" for london prime hpi). also, the funding for lending scheme has been cut back- this i believe was a big driver in the recent surge. probably the biggest factor now is the change in sentiment. the media is all over the "london bubble" and when you get a bubble you inevitably get a crash.

i know hamish is going to bring out the old supply & demand argument but i feel this has been overplayed by the media and likes of ukip for their on respective reasons. yes, we have a shortage of housing in london but i believe this has already been priced in over the long term.

i'd just like to add i've been renting for just shy of 10 years in london and this has enabled me to live in accommodation and areas where i would have no chance of ever buying. i'm currently in a position to buy but i feel that prices are unsustainable at these levels and a correction in london is currently underway

Rota

Blooloo wrote: »

so would someone paying a mortgage along with the loss of use of the capital deposit, expenses of repair, decorations, insurance, and general !!!!!!!g about.

I dont know crashys case, but it doesnt disprove my assertion that sometimes its cheaper to buy, and sometimes its cheaper to rent.

most buyers in todays market are looking at the monthly costs...capital appreciation is the icing on a cake baked into the sale pitch of the mortgage vendors. And according to posters here, this mortgage market is already restricted by sensible lending.

Yeah, those aren't big costs allocated over the life of a mortgage. Sure it might take a bit of effort but that's life. Getting told I can't paint walls, change curtains or have a dog would really annoy me.

Rota

Bubble_and_Squeak wrote: »

really good thread! enjoyable read.

in answer to the title of the thread i feel that the tipping point in london was reached in april with the introduction of mmr. since then several factors have come into play. the crisis in ukraine has slowed russia money coming into prime london and chinas property bubble looks like it has popped (i'm assuming this is "bad" for london prime hpi). also, the funding for lending scheme has been cut back- this i believe was a big driver in the recent surge. probably the biggest factor now is the change in sentiment. the media is all over the "london bubble" and when you get a bubble you inevitably get a crash.

i know hamish is going to bring out the old supply & demand argument but i feel this has been overplayed by the media and likes of ukip for their on respective reasons. yes, we have a shortage of housing in london but i believe this has already been priced in over the long term.

i'd just like to add i've been renting for just shy of 10 years in london and this has enabled me to live in accommodation and areas where i would have no chance of ever buying. i'm currently in a position to buy but i feel that prices are unsustainable at these levels and a correction in london is currently underway

Welcome to the party. :hello:

ukcarper

Blooloo wrote: »

do you have a link to these figures please.

most people move up a ladder...

The post where he said he spent £81k is in this thread somewhere he linked to a 1 bed flat which was £45k in 2002 I used that figure and 4.5% interest. Obviously interest might have been slightly higher but is also the flat would have been cheaper in 1998.

Zither

With the exception of super-cheap credit, I've no idea how house prices have remained so high for the last few years, e.g...

Very little wage inflation

general inflation in goods, utilities and childcare outstripping wage growth by a 'decent amount'

growth in zero-hour contracts

Private debt like credit cards, personal loans seems to be more of an issue for lots of people

Don't know much about it yet but the new mortgage assessment criteria that came in a few months ago

talk of moving to 3-4 day working weeks in the next decade (because there's not enough work to go around for everyone)

I just don't see the fundamentals that have lead to 10-20% growth in houseprices each year. Probably missing something obvious but beyond me!!

Rota

Zither wrote: »

With the exception of super-cheap credit, I've no idea how house prices have remained so high for the last few years, e.g...

Very little wage inflation

general inflation in goods, utilities and childcare outstripping wage growth by a 'decent amount'

growth in zero-hour contracts

Private debt like credit cards, personal loans seems to be more of an issue for lots of people

Don't know much about it yet but the new mortgage assessment criteria that came in a few months ago

talk of moving to 3-4 day working weeks in the next decade (because there's not enough work to go around for everyone)

I just don't see the fundamentals that have lead to 10-20% growth in houseprices each year. Probably missing something obvious but beyond me!!

You don't know? I'll tell you. 1m more people in the country and about 6 houses built for them to live in.

I don't see or hear about 3-4 day weeks. Unemployment was over 10% in 2008-9 now it's 6% and dropping every time stats are released.

Jack_Johnson_the_acorn

Zither wrote: »

With the exception of super-cheap credit, I've no idea how house prices have remained so high for the last few years, e.g...

Very little wage inflation

general inflation in goods, utilities and childcare outstripping wage growth by a 'decent amount'

growth in zero-hour contracts

Private debt like credit cards, personal loans seems to be more of an issue for lots of people

Don't know much about it yet but the new mortgage assessment criteria that came in a few months ago

talk of moving to 3-4 day working weeks in the next decade (because there's not enough work to go around for everyone)

I just don't see the fundamentals that have lead to 10-20% growth in houseprices each year. Probably missing something obvious but beyond me!!

we haven't seen 20% each year, its only risen at that pace this year and that clearly isn't sustainable over a long period, and nobody on here is saying it is. But if we continually restrict credit during a massive housing shortage we will continue to see a build up in demand that eventually leads to a surge in hpi.

mystic_trev

Blooloo wrote: »

do you have a link to these figures please.

most people move up a ladder...

If he's rented for that long he's certainly lost out.

By the way Blooloo, welcome to the Forum, I always enjoyed reading your postings on HPC, before I was banned (for no apparent reason than being Bullish on prices) three times! Why the Moderators ban anyone who's doesn't follow the Party line, is beyond me!

Bubble_and_Squeak wrote: »

i'd just like to add i've been renting for just shy of 10 years in london and this has enabled me to live in accommodation and areas where i would have no chance of ever buying. i'm currently in a position to buy but i feel that prices are unsustainable at these levels and a correction in london is currently underway

London prices are certainly 'toppy' and I think they'll be some kind of correction, but don't expect a crash. A large percentage of London properties are cash purchases.

A warm welcome to MSE to you as well!

Zither

Rota wrote: »

You don't know? I'll tell you. 1m more people in the country and about 6 houses built for them to live in.

I don't see or hear about 3-4 day weeks. Unemployment was over 10% in 2008-9 now it's 6% and dropping every time stats are released.

Sure, I take your point. And am only speaking from an anecdotal perspective. But everything I 'seem' to read indicates that a lot of the decrease in unemployment is more to do with growth in part-time jobs, zero-hour contracts etc.

The move to smaller working weeks is fascinating stuff - automation of employment (like cashier-less tills in Tescos, for example) (which are a pain in the bum btw!!) seems to mean fewer jobs for everyone. Automation of other jobs through machines, improved software could mean fewer people needed to carry on doing jobs that currently require manual intervention. I haven't got a sense for how the economy will develop to replace these lost jobs yet.

Totally see what you're saying about supply and demand though. Just wonder at what point a lack of wages/employment (as I see things) will undercut demand (if no-one can afford the actual supply).