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

Crashy_Time

Jason74 wrote: »

I've joined you on that. I disagree with Hamish on many things (see my last post on this thread as exibit A), but I don't doubt that he's a genuine poster, and while his views (and others to be fair) may be influenced by their positions in the market (although of course, there's an element of chicken and egg here, as people could equally act in the market precisely because they hold a certain view), they are clearly his own views. Accusing someone of being "on the payroll" to promote a view is beyond the pail imho, especially when the notion has been so clearly demolished as nonsense.

Where was it demolished?

khards

HAMISH_MCTAVISH wrote: »

Sure.



They didn't. (they fell in some, but not all, of those years)

Now maybe you can answer my question....

If high prices are caused by lax lending, why is it that prices have reached a new peak when the number of mortgage approvals is still little more than half the long term average, I/O is virtually non-existent, self cert is banned, mortgages are being stress tested to 7% rates, and the average FTB is paying less than 3.5 times income and putting down 16% deposits?

Prices around here in are still at 2004 prices and seem quite reasonable to me.
I would suggest the area you talk about a new peak in is London. London has had a lot of demand from foreign speculators and highly leveraged (>4.5x income) first time buyers employed in the financial sector.
The upswing is on very low volumes and quite understandable.

I will agree that the country wide average FTB's are paying 3.5 x income, but can't agrgree that your 'new peak' is country wide.

Please can you linkl to the stats showing FTB's are paying 3.5 x income and the 'new peak' is country wide?

Sheep_In_Wolves_Clothing

HAMISH_MCTAVISH wrote: »

Sure.



They didn't. (they fell in some, but not all, of those years)

Now maybe you can answer my question....

If high prices are caused by lax lending, why is it that prices have reached a new peak when the number of mortgage approvals is still little more than half the long term average, I/O is virtually non-existent, self cert is banned, mortgages are being stress tested to 7% rates, and the average FTB is paying less than 3.5 times income and putting down 16% deposits?

HTB. A speculative bubble in London in no small measure caused by an influx of money from overseas, which is skewing the figures. A speculative bubble I should add that is now showing genuine signs of unwinding, probably due to sanctions on Russia, sanctions in Russia, sanctions in China and the bursting of a credit bubble in the same country. And also the new measures on lending which is putting a dampner on the promise of runaway house price increases.


The stress tests have only been introduced in the last 2-3 months, most of the recent increases occurred prior to this.


The low number of mortgage approvals says more about the unaffordability of houses to many than anything which contradicts your point about the average FTB taking on a mortgage at only 3.5x income - or did you mean x3.5 joint income?


The Government even agree that house prices are massively out of synch by introducing HTB in the first place, just to stimulate a mini 'boom'. If this policy were needed to boost house prices with interest rates at 350 year lows then it doesn't take Einstein to figure out that house prices can't go much higher than they are.

Jack_Johnson_the_acorn

Crashy_Time wrote: »

I think you live in Spam Valley, so it is good that you can spell the first line of your address.

I was finding you quite amusing but now you're getting quite dull.

Please answer my question posed a couple of mins ago....

Otherwise auf wiedersehen

Jason74

HAMISH_MCTAVISH wrote: »

Yes I understand how you think it works, but I'm not sure you're correct....

The central London super-prime areas are a vanishingly small number of houses in the big scheme of things.

Lets say 1000 people sell up in central London, then that 1000 people buy in middle London, then that 1000 people from middle London buy in outer London.....

At each stage of the ripple they make up a smaller and smaller percentage of the market.

By the time they get to outer London, it's probably 1% that is able to pay more as a result of someone 3 links up the chain paying more.

The other 99% have to buy with the same sources of income they always did.....



Yes.



And yes again.



We'll agree to disagree on that part....

Fair enough, although I think it's something you have to actually be in London to really see first hand. Certainly my own area has seen an influx of money from people priced out of more fashionable areas that would previously beed their "natural" buying spots. They in turn have been nudged out by people forced out of more fashionable areas still. So for me, it's quite literally a process I'm seeing with my own eyes, and it's certainly a factor in a heck of a lot more than 1% of sales

khards

HAMISH_MCTAVISH wrote: »

You too old bean.

Shame Ireland didn't work out for you.... Guess cheaper house prices aren't much use when you can't keep a job because the economy sucks.... A point we repeatedly warn the crashaholics about over here.

Welcome to MSE anyway though....

Aha yes, too true. We are much better off after moving back here, tho I do like Ireland. Sometimes in life you have to take Oppotunities like moving abroad whilst you have the chance - those options aren't always there.
We have a better jobs here now and have relocated nearer to our families rather than being stuck in the ares end of kent 300 miles away from everyone.

Re: Irish house prices, the prices here in Somerset aren't much different from the prices in Ireland in areas you would actually want to live, i.e. commuting distance from work.

Crashy_Time

Jack_Johnson_the_acorn wrote: »

Crashy, I'm 28, and I'm 8 years away from owning my house outright, I have to presume that you are in your 40's as you have rented for at least 17 years..... You keep calling people with mortgages muppets but check out this scenario.....

It's DEC 2011 I'm 25yrs old wanting a place of my own. I have saved £15k. Now I can invest in property and pay £100 less a month than it would cost to rent (mortgage term 25yrs).... or can I pay the extra £100pm in rent for possibly the next 50 yrs till I die.....

What decision do I make..... :idea:

What

I feel so sorry for you that I am not going to respond to any more of your posts. "Buying" in 2011 was probably the worst mistake you are ever going to make.

Jack_Johnson_the_acorn

Jason74 wrote: »

Fair enough, although I think it's something you have to actually be in London to really see first hand. Certainly my own area has seen an influx of money from people priced out of more fashionable areas that would previously beed their "natural" buying spots. They in turn have been nudged out by people forced out of more fashionable areas still. So for me, it's quite literally a process I'm seeing with my own eyes, and it's certainly a factor in a heck of a lot more than 1% of sales

I think you make a good point Jason, but London is the exception and not the rule.

wotsthat

Crashy_Time wrote: »

Why did prices fall if there is a shortage of housing?

There was a global financial crisis, banks were going bust, lending fell off a cliff, unemployment was going up, people were taking pay cuts to keep their jobs etc - yup - you got me there.

Jason74

Crashy_Time wrote: »

Where was it demolished?

If you can't work that out from what's already been posted, nothing I can add will be of much help