UK property crash

Killerseven

British property shares some similarities with oil at the start of 2014. Everyone thinks it can’t go down in price, and everyone thinks that it’s relatively scarce. But that’s increasingly not the case.

Supplies are expanding more than demand as London sees the largest expansion of property supply in living memory.

For one thing, house price growth has cooled remarkably in recent months, particularly in London, where fear of higher taxes and stricter mortgage rules seems to have hit prices hard. For another, efforts to boost supply are having an impact – as a piece on Bloomberg in October put it, “homebuilding in central London doubled in two years” amid low rates and high prices.

Saxo reckons that the threat of higher rates from the Bank of England will also put pressure on “mortgage rates and in turn household finances already undermined by” low wages. They suggest prices could fall by as much as 25% this year – eye-catching, but not impossible.


moneyweek.com/predictions-for-what-lies-ahead-in-2015/

CLAPTON

Killerseven wrote: »

British property shares some similarities with oil at the start of 2014. Everyone thinks it can’t go down in price, and everyone thinks that it’s relatively scarce. But that’s increasingly not the case.

Supplies are expanding more than demand as London sees the largest expansion of property supply in living memory.

For one thing, house price growth has cooled remarkably in recent months, particularly in London, where fear of higher taxes and stricter mortgage rules seems to have hit prices hard. For another, efforts to boost supply are having an impact – as a piece on Bloomberg in October put it, “homebuilding in central London doubled in two years” amid low rates and high prices.

Saxo reckons that the threat of higher rates from the Bank of England will also put pressure on “mortgage rates and in turn household finances already undermined by” low wages. They suggest prices could fall by as much as 25% this year – eye-catching, but not impossible.


moneyweek.com/predictions-for-what-lies-ahead-in-2015/

amasingly there are people alive today who remember the massive building programs in the 50/60/70 which dwarf the current rates

prices might fall by 25% but then again they might rise

everyone doesn't think they can't go down : as evidenced by the author

antrobus

Killerseven wrote: »

....Saxo reckons that .....

I know it's only Money Week, but it still pays to actually read the article;

Every year, Saxobank puts out ten ‘outrageous’ predictions for markets over the coming year. These aren’t meant to be taken entirely seriously – they’re more in the spirit of ‘outside the box’ stuff that might take everyone by surprise.

Although, actually it's Saxo Bank.

You can read their 10 outragous predicitons for 2014 and work out how many were right here ...
http://www.prnewswire.com/news-releases/saxo-bank-10-outrageous-predictions-for-2014-236151291.html

... or contemplate their 10 outragous predicitons for 2015 here.

http://www.afr.com/p/markets/saxo_bank_outrageous_predictions_ZVOUpBuHxpn31ixA7dYmSP

In_For_A_Penny_2

Killerseven wrote: »

British property shares some similarities with oil at the start of 2014. Everyone thinks it can’t go down in price /

Whoever thought that?

Killerseven

Oil first, then stocks and property to follow oil down.

CLAPTON

Killerseven wrote: »

Oil first, then stocks and property to follow oil down.

presumably you are selling your own home so you can buy back in a few months at a massive discount

tkane

The most crucial factor in the event of a correction is supply. There is no pressure on households to put up their homes for sale at a loss/big discount for as long as interest rates stay stagnant. Coupled with falling unemployment, rising wages and lowering inflation the environment is completely against a 'house price crash'.

Oh and the press are still running with the 'threat of interest rates hikes' is deterring buyers crap. We've known since November that interest rates are not going anywhere for quite some time. Possibly down, but certainly not up.

ging84

anyone who doesn't release that opec have been artificially restricting supply for 40 years or more to sustain a high oil price effectively giving them the power to set the oil price to what ever suits them, should not be writing articles predicting anything

Bubble_and_Squeak

tkane wrote: »

The most crucial factor in the event of a correction is supply. There is no pressure on households to put up their homes for sale at a loss/big discount for as long as interest rates stay stagnant. Coupled with falling unemployment, rising wages and lowering inflation the environment is completely against a 'house price crash'.

Oh and the press are still running with the 'threat of interest rates hikes' is deterring buyers crap. We've known since November that interest rates are not going anywhere for quite some time. Possibly down, but certainly not up.

this is true to the extent that increased supply hastens the speed of a correction but it in terms of the housing market its not enough to stop it. somebody somewhere has to sell. that person sets the price.
we have a situation now where people think their house is worth x amount and will only sell for that price. people who need to sell will sell. they set the price, not the people who don't.

padington

Bubble_and_Squeak wrote: »

this is true to the extent that increased supply hastens the speed of a correction but it in terms of the housing market its not enough to stop it. somebody somewhere has to sell. that person sets the price.
we have a situation now where people think their house is worth x amount and will only sell for that price. people who need to sell will sell. they set the price, not the people who don't.

Problem is that there are more buyers than sellers by a long chalk. London is increasing population by a new borough of people every three years. The rental on property is always going to be an amazing earner. Expect a dip and be quick to buy in it but don't miss the boat because it won't last.

jjlandlord

Killerseven wrote: »

Supplies are expanding more than demand as London sees the largest expansion of property supply in living memory.

Supply might (do you know?) be increasing more than demand is increasing.

However I am rather convinced that supply is still way below demand.
Just look at the commuter trains and roads into London every day...