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

padington

Crashy_Time wrote: »

I am predicting that many who bought into this bubble will be bankrupt in less than five years.

I'm predicting you will change your avatar before we get to December 2019

Crashy_Time

padington wrote: »

I'm predicting you will change your avatar before we get to December 2019

To what?...HPI Time ....:money::beer: :rotfl: Keep dreaming son.

Windofchange

lisyloo wrote: »

I do expect prices in London to go up although I expect rises to moderate considerably. The reason is that the population and the demand to be in that city will continue to rise beyond the supply. I don't think there are very many people here from any spectrum of the argument who disagree that London is a special case because of the income from sectors like banking and foreign money.

So by your reasoning, house prices can go up and up and up and away with no faltering? You contradict yourself below when you say you base your financial decisions on logic - there is no logic to what is going on in London at the moment. People buying a place, doing nothing and flipping it for a 200k profit 4 months later, people buying studios in Battersea power station for 800k off plan and then trying to sell them for 1.5 million. An entire generation priced out of property ownership. Myself earning around 50k per year being unable to afford a garage within the M25? The assumption by the likes of yourself that this can just run on forever and none of this money will need to get paid back? The hysteria, the mad scramble to get on the ladder before it's too late. Shared ownership, first time buyer loans, 20% discount on new builds, Quantitative easing, emergency interest rates for 5 years, Key worker mortgages, help to buy and on and on and on. Is this the sign of a healthy housing market where the government needs to continually inject cash and effort to keep it afloat? What would have happened in 2008 had they not stepped in? A crash. But hey, push that under the carpet, it'll never come back to bite us in the backside. The party carries on. All hail the new paradigm

lisyloo wrote: »

Are you discounting millions of foreign people? The market for London is wider than jsut the UK population.
Why do you think there aren't enough people coming in at the bottom in London. If you went to view a house you'd find youself competing with many others. Where are you getting your information from? What leads you to believe there aren't enough in London?

What the Russians and their screwed currency/economy? The Chinese with their shaky economy? The Scots? I think you misunderstand the importance of equity. If you take the 500k flat in Putney that I posted a few pages ago, I wonder how many people such as myself would be 'competing'. You have two types. You have those who have been given money by parents/relatives, and you have those who are investors. Both of these types rely on equity. If you brought in 1997, you may have 500k equity in your three bed house in Wandsworth. You can use this equity to leverage yourself further by taking out a loan against that value. This is what has been happening largely this last decade. What happens when the equity runs out though? What happens when the bank of mum and dad is empty? What happens should, shock horror, the housing market go into reverse and your 500k Putney flat is now 'worth' 400k? You will see a rapid collapse of the house of cards. I would not be competing against anyone, as I cannot afford to. with a 20k deposit and 4 x salary (should I be granted that), I would maybe have 220k. What will that get me in Zones 1-6? Wanna sell me your flat? Nope. Thought not, you've worked hard for that equity after all. The cheek of me.

lisyloo wrote: »

I agree, and I think that's a bad thing.
However what solid arguments or evidence do you have that is cannot continue.

BTW - please don't tarr people's views with their politics or wishes.
I'm someone who believe it's insane/madness/inquitable etc. but still believes it can continue.

See above. There is so much evidence that I could spend a day writing it out. A solid, rational, functional housing market does not need a dozen government backed schemes to allow well qualified middle classes to buy a shoe box in Streatham. Have a google - there have been a lot of negative press releases as of late. How is that deficit cutting going Dave? What about the 30k drop in house prices last month in London? 14% fall in SW London?

As for you BTW point, I'm not sure I understand what you are getting at? Didn't you at the bottom of your post boast that you base all you financial decisions on logic, yet here you are saying you believe that it is insane/madness/inequitable? Make your mind up! Are you a person of great logic or not?

lisyloo wrote: »

So because you think it "madess" you think it cannot continue. I think you are making a BIG mistake if you are making life changing decisions based on the fact that you do not like the way the world is. I don't like the way the world is right now. It's become highly inequitable in this country, however I base my financial decisions on logic and I hope you take what I am saying the right way, but your posts come across as if you are basing your view because you just don't like what you see.

I like the way you assume I have a choice. I like the way you think I sat down last weekend and thought, hey, I think I'll buy a flat this week, oh no, hang on, I can't be bothered. This is what you property will go up forever types don't get. I'm not making any financial decisions - the decisions for myself and hundreds of thousands of others have been made for me/us. This is why the crash is coming. It might not be tomorrow, it probably in my view won't be till after the election, but if you think an economy based on borrowing against imaginary money is sustainable, then Dave and George have done a great job with you. You have brought into their vision. No more boom and bust.

lisyloo wrote: »

So if you won 100 million on the lottery and had a load of mates in Fulham - you wouldn't even consider it?

I don't have any mates in Fulham, which maybe says enough about our differences than I could ever type. If I won 100 million then money would have no meaning to me, and I could buy what the heck I wanted. I was having a discussion with an old friend of mine over some beers the other night, and we were both saddened that a terraced three bed house in our old neighbourhood sold for £1.25 million (Zone 4) a month ago. He has a young family and would love somewhere to bring them up, but alas, a two bed flat is what he can (barely) afford on a policeman and wife's physio salary.

It is interesting you need to cite winning the lottery as a viable way into property ownership. This is exactly how I feel.

lisyloo wrote: »

Well clearly not enough so far to cause prices to come down (until very recently). If we're talking about London there clearly are enough people there to support it. I'm priced out from a small flat in London and we're in the top 1% of the population salary wise, but there ARE enough people in the world richer than us to price us out. Is it simply that you cannot accept this?

But hang on, are you not the girl with a small flat in London that suits your needs, yet you can't afford one? I'm confused. You are again confusing people's ability to buy with the financial institutions ability to loan. This isn't kept afloat by hoards of foreign buyers, this is kept afloat by lax lending that lead to the financial crash of 2008, and will lead to the crash of the next 12 - 24 months. Did all our banks pass the recent stress tests with flying colours? There HAVE been enough loans to keep London flying. However, once this dries up, and it is, then where will the money come from? If you weren't able to get a mortgage, could you buy a house outright?

I am old enough (don't know about you) to remember the crash of the late 80's and early 90's. My father got laid off from his accountancy job, had to drive a taxi to make ends meet. It was the same situation - people thought they had found the new paradise, no more boom and bust, no more recession. The one absolute guarantee in a capitalist economy such as ours is greed. This greed fuels ever rising prices in asset classes until a bubble is created. This bubble then pops and leaves the masses picking up the pieces, as we were in 2008, and as we will be again in 2015/16 in my view.

You are of course entitled to your view, but if you think there is nothing to back up mine, open your eyes. What's the latest thing that has been put out there? Oh yeah, Dave and George out of the kindness of their hearts are bringing forwards the first time buyer bribe, erm, I mean pledge to build 100,000 new homes with a 20% discount. Oh yeah, of course you can have that alongside your government backed mortgage and deposit. As a sane adult do you think this is a good sign? Everything is rosey? No need to panic? Houses are fairly priced? Oh yeah, about the election, well it just happens to co-incide with it. Can we please have your vote so we can then have a crash and nobody can boot us out for the next 5 years.

Sentiment is a killer in this game. Just as this bubble was built on a mentality of easy money and can't lose mate, so it will be popped once the bad news hits.

Windofchange

As an aside, I'm most probably not sticking around in this country for too much longer anyway. London is becoming an emotionless cess pit of bankers, people called Rupert and hipsters who own a delightful studio in Hoxton. I shall be seeking my 'value for money' around the other side of the world where my profession is paid twice as much, and housing costs about a quarter of the cost as here. I know of a lot of educated (at the UK's expense) adults who are doing likewise.

If as you say, the millions of foreigners are buying over here then there should be plenty of houses for me over there!

Cloudydaze

I know anecdotal evidence counts for very little but I live less than a mile from the putney flat you posted in a similar style property. I think you are wrong the only bank of mum & dad or investors can afford to buy these properties. I have got 3 new sets of neighbours in the last 6 months...

1. Couple who sold Central London flat as they wanted more space and garden as they have a new baby.
2. Couple who sold a house round the corner and bought the small flat and plan to buy a house in the country.
3. Recently divorced guy in his 50s who has moved from Surrey.

None are called Rupert.

In_For_A_Penny_2

Windofchange wrote: »

Myself earning around 50k per year being unable to afford a garage within the M25?

50k a year would get you a much better standard of living elsewhere in the UK without having to resort to living abroad.

Windofchange

Cloudydaze wrote: »

I know anecdotal evidence counts for very little but I live less than a mile from the putney flat you posted in a similar style property. I think you are wrong the only bank of mum & dad or investors can afford to buy these properties. I have got 3 new sets of neighbours in the last 6 months...

1. Couple who sold Central London flat as they wanted more space and garden as they have a new baby.
2. Couple who sold a house round the corner and bought the small flat and plan to buy a house in the country.
3. Recently divorced guy in his 50s who has moved from Surrey.

None are called Rupert.

1) Equity in Central London Flat
2) Equity from house round the corner
3) No doubt equity (after the wife has had her share) from house brought in the 70's for two shillings and sold for 2 million recently.

This backs up my point/rant perfectly. Think about it. I earn in the region of 50k. I am pretty proud of this fact. It's a not too bad sum of money. I have a good job in the medical profession. It has taken me a lengthy degree and a lot of graft to get to where I am now. I cannot afford a one bed flat in an alright neighbourhood. Putney has always been a nice middle class area, but it's not Kensington or Mayfair. I look down the road at Wimbledon or Kingston - same situation, but maybe a fraction less. The place I am in at the moment - a three bedroom maisonette sold for 485k about 2 years ago. It has about 3 x the floor space of the flat that is now up for 15k more. MADNESS!!!!!!!!!!!

My point is exactly this. Without either equity or relatives, even reasonably affluent people in this country cannot afford to buy anywhere. That flat for instance. I wouldn't get a mortgage approved for even half the supposed value. And then people try to state there is no bubble. Carry on. No need for panic. I then sit at work and listen to a colleague who has inherited some dump in Morden and won't sell it for 390k as she has been told it's worth 410 - 425. She's not going to just give it away. My blood boils. I feel like the sixth sense - being able to see things and nobody will listen. All you get is constant propaganda about how high house prices are great and no crash on the cards and Kirsty and Phil all over the place. When I'm busting 60 hour weeks, I think, for what!? Yes I am privileged in many ways, but what end product do I have? Paying rent to someone to fund the system.

I think that there should be alarm bells ringing very loudly, but it seems that there are plenty who would rather this charade were kept going at all costs. Thing is for you home owners, what when you want to upgrade? The next rung just doubled in value too. It does nothing for society, and simply puts feed in the trough of the pigs that run this country for them and their chums.

Windofchange

In_For_A_Penny wrote: »

50k a year would get you a much better standard of living elsewhere in the UK without having to resort to living abroad.

I've given up with UK Plc. The system is broken and if I am going to move to Manchester I might as well move to the other side of the world as far as I am concerned. Plenty of folks just like me doing the exact same thing. Well educated, well paid, well fed up of the mess that has been created by greed and stupidity.

System

That's some tragic entitlement issues right there.

Wah I can't live in one of the best cities in the world. *toys*

If just a fraction of the people with that attitude actually went through with it and left the rest of us would be in a much better place.

Edit. With a negative £8000. Brilliant.

Windofchange

Joeskeppi wrote: »

That's some tragic entitlement issues right there.

Wah I can't live in one of the best cities in the world. *toys*

If just a fraction of the people with that attitude actually went through with it and left the rest of us would be in a much better place.

Believe me my friend, I am leaving. You have to be insane to believe what you just wrote. The city I was born in, grew up in and have played an active part of. I'm not asking for a penthouse in Mayfair, I'm asking for the chance to be able to put some roots down and build a life. You think the social cleansing of London - removing anyone who isn't a millionaire is a good thing?

May I ask Joeskeppi, who would you replace me with? When you need my medical advice or treatment, who would you have come fill my shoes? You think the central London nurses, paramedics, doctors, physios, social workers who might care for you or your loved ones have entitlement issues because they work their behinds off and have to either commute from 2 hours away or rent?

If you genuinely believe what you just wrote then I have nothing by pity for you.