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

Blooloo

wotsthat wrote: »

People on HPC want to end up as homeowners.

Why not just buy a house and pay down the mortgage asap instead of worrying about playing bulls and bears?

If you been paying any attention at all, ie, engaged in debate, you will have observed that one of my key points is that the financialisation of the housing market removes this choice from many and increasing numbers of people.

Philuk

HAMISH_MCTAVISH wrote: »

(...)

Why do you think that is?

And to circumvent a number of posts and get straight to the point, if you could wave a magic wand tomorrow and make all houses 50% of the price they are today, how many new empty houses would suddenly spring up for those cooped up families to go and live in?

I would completely agree it's not out of choice, and it's not just "lots", it's many millions of adults living with parents, or lodging, or in HMO's, or flatshares, or what have you.

But the point we are trying to make, is that if prices were to halve, where would the millions of houses suddenly appear from for these people to go and live in?
(...)

Perfectly logical thinking on paper, not sure it all adds up in reality. From a correlation point of view, prices in London have probably triple in 16 years while its population only increased by 20%, pricing out many of us in a relatively stagnant ratio population/house stock. So who now lives in those higher end (ish) property?

It's incredibly complex to factor in foreign investment, buy to let and investment company's impact on price and housing stock. Yields in central London are less than 4% gross which probably net to 1-2%, most (foreign) owners prefer to leave their properties vacant than going through the hassle of renting it out, their target being capital preservation/appreciation in a highly inflationary, 0%ish interest rate world. This trigger a ripple effect where the typical South Kensington French families gets kick out to Fulham, which in turn get Fulham's financial workers moved to Wimbledon, and so on and so forth.

Also, a significant part of London housing is in need of refurbishment/redevelopment and currently inadequately deployed due to lack of credit for investors since 2008, things have been turning around over the last 12 months and new projects are flourishing all over London. They do take 12-24 months though to materialise, but we might be in that perfect storm where unusable stocks aren't repaired yet while economy is recovering fast for many.

Not saying anyone has the answers, but there are many more factor to explain poor housing condition than simply a mismatch between number of flats and population.

chucknorris

saguk1234 wrote: »

HPI nutters have gone very quiet. I think the panic has set in!

I would welcome more HPI because I would gain quite a lot and it would further boost my retirement income, how does that make me a nutter?

saguk1234

But who would be left to buy your overpriced property?

ukcarper

saguk1234 wrote: »

But who would be left to buy your overpriced property?

You think property is overpriced now but it is still selling as long as the number of people who can afford to buy exceeds the number of properties available prices will rise.

saguk1234

No its not selling actually. I have seen more and more for sale and rent baords going up. Nothing. Tumbleweed. And I am in zone 2 London.

System

:laugh:

Classic stuff.

ukcarper

Joeskeppi wrote: »

:laugh:

Classic stuff.

Head sand springs to mind.

System

ukcarper wrote: »

Head sand springs to mind.

It reminds me of the good old days of arch-muppets like ad44downey who spent their days going out of their way to look like as much of a bell end as possible before eventually disappearing in a shroud of shame.

hpc_troll

wotsthat wrote: »

People on HPC want to end up as homeowners.

At risk of being told off for being for suggesting that you are off topic, I think you are off topic. However, I'll pick it up as I think that this goes straight to the heart of why this 'debate' is going nowhere, slowly.

There is no such thing as a generic hpc poster. Many posters are owner-occupiers, some are openly BTLers. Some are attempting to call the market. Some think trying to call the market is a mugs game. Overall one would assume that posters are bearish on prices, but there are definitely very established posters who are committed to the view that everything will be done to prevent nominal price falls - and how could you be less bearish than that?

The posts that you are making are dismissive, but you're fighting ghosts. I've been on their two years, maybe reading three years. The so-called Sell To Rent crowd that you imagine as representative don't seem to actually exist.

Read the comments section on any of the broadsheet newspaper on-line. These views that you seek to brush aside as the crying into the beer of losers who can't admit that they are wrong come from all quarters, because in 2008 lots of things changed a lot. Right now the downside risks of buying are almost certainly a little elevated compared to times when we weren't awash with cheap money and trying to pay prices at 10x to 12x median local earnings.

I understand that people with a lot of skin in the game might not welcome a dispassionate discussion of the possibility of a downwards move back towards historical trend relationship with rents, but then do what Hamish does -make an argument.

wotsthat wrote: »

Why not just buy a house and pay down the mortgage asap instead of worrying about playing bulls and bears?

Again, no offence intended and I accept that you may not accept me as the arbiter of what is an what is not off topic, but in my opinion, this is off topic.