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

lisyloo

Rent is shooting up in my neck of the woods, 6 months ago a nice 2 up 2 downs were renting for £1500, now £1700 a month is being breached.

Just out of interest a what point do you think people will change their behaviour in your neck of the woods e.g. share, go somewhere else, look for something smaller, commute further etc.

Reactor_2

lisyloo wrote: »

Just out of interest a what point do you think people will change their behaviour in your neck of the woods e.g. share, go somewhere else, look for something smaller, commute further etc.

I know the above was not addressed to me, but I thought it would be amusing to add my thoughts:

How about if the biggest employer in the area is axing thousands of jobs, like Microsoft? How about an ebola breaking out in your area? How about out-of-control youths burning down the high street?

chucknorris

lukeh23 wrote: »

Your assets would have seen an approx 20% increase. Thats super bubble levels. You're a brave man if you plan to hold into that market for next ten years. Your username would be very apt.

I would call it sensible rather than brave. If you were in my shoes with a few properties, not only with equity but also with low margin tracker mortgages, would you really sell up and walk away from not only the decent yield, but also the additional profit (from low interest rates). If so, where would you invest the money?

lisyloo

Sorry I don't get your point.
I was asking at what point prices would affect behaviour .
Yes of course there are dozens of other factors that affect behaviour too. We don't get riots or deadly diseases very often but certainly the availability of jobs is a factor.
I was asking about prices though as surely the ability to pay isn't completely elastic outside london zone 1.

padington

lisyloo wrote: »

Just out of interest a what point do you think people will change their behaviour in your neck of the woods e.g. share, go somewhere else, look for something smaller, commute further etc.

They are already changing. Many people on my road use airbnb, spare rooms are a thing of the past and we're beginning to see new immigrant families sharing houses like Ozzie backpackers did the nineties or most Londoners did 100 years ago.

lisyloo

Thanks, looks like people are willing to live in higher occupancy/smaller places rather than move elsewhere (assuming they have a choice of course).
That's bad news for those expecting prices to fall as it looks like expectation or willingness to put up with less accomodation is still elastic.

As my DH only found a job in London I understand people's choices are sometimes limited (at least the good choices).

padington

Reactor wrote: »

I know the above was not addressed to me, but I thought it would be amusing to add my thoughts:

How about if the biggest employer in the area is axing thousands of jobs, like Microsoft? How about an ebola breaking out in your area? How about out-of-control youths burning down the high street?

The youths burnt our high street in 2011. With cities growing that increases the propensity for everything to increase proportionally more on average. This includes many good things like standard living, cost efficiency etc but that also includes crime. It's something like 20% more of everything, more beautiful people, more ideas , more culture, more wealth and more crime every time a city doubles in size. Crime is simply an industry we don't like.

Where there is muck, there is brass

MARTYM8`

Clearly in London where some areas have seen crazy rises in the last few years there will be a period where people stop for breath. Various factors may affect things e.g. who wins the election, a potential stockmarket crash as prices are toppy now, and further problems in the banking system/China/Europe.

My impression is that properties are taking longer to sell in London - and some ridiculous asking prices are being reduced - as the surveys suggest. The point is if you do have ever rising house prices you do actually need to have people with the income/funds to buy them!

padington

MARTYM8` wrote: »

My impression is that properties are taking longer to sell in London - and some ridiculous asking prices are being reduced - as the surveys suggest. The point is if you do have ever rising house prices you do actually need to have people with the income/funds to buy them!

Or you share more. This is where the jobs are going to come from, more and more and more.

It's becoming common for professional people to do three days in London, live in a relatively cheap box room with a family and spend the other four up north or in the country. The pressure is increasingly for that box room to house someone else on the other days.

... And thats professionals.

That box room could theoretically house a bunk bed.

If you're a copyright lawyer or film editor or a PR person, London just offers the incentives to do crazy things that other places don't.

Ever seen how supply and demand works with back packers? They don't stop making the pilgrimage to the best places, they just live in bunks with eight to a room.

Families will get squeezed out of London but the singles, commuter workers and 'work tourists' will find a place to crash in houses of more and more people sharing the rent

The next thing to go viral is a website that let's you know not when a room is free but when a bunk bed is.

lisyloo

If you're a copyright lawyer or film editor or a PR person, London just offers the incentives to do crazy things that other places don't.

There are certain jobs that can only happen in London. The fashion industry is another one.

However for everyone else isn't there a point where you'd say no?
If we (as a married couple) had to actually share sleeping accomodation then I'd say no even if it meant dropping both our careers and massive lifestyle change.
I guess if you're single and young then it doesn't matter so much.
So maybe it'll squeeze out anyone that's attached and wants to live with their partner also.

But I get your point that it can go on and on even if certain groups get squeezed out.