HPC thread of the week

padington

Crashy_Time wrote: »

Debt, death, divorce, and many other reasons say that this is not correct. People who need and want to sell make the market, not HPI fantasists.

True but that happens in recessions . The UK economy isn't depressed, wages are growing. inward investment is growing and employment is high.

On top of this China and Europe are doing more QE and U.S. Interest rates look set to stay low for a good while yet.

cells

Crashy_Time wrote: »

Debt, death, divorce, and many other reasons say that this is not correct. People who need and want to sell make the market, not HPI fantasists.

divorce adds pressure to house prices and rents as two households are formed where there was one

Plenty of rich people get divorced. One French lady I know divorced her wealthy husband and bought a six bedroom semi and the husband kept the old family home.

And even for poor people it would mean two rentals (social or private) where there was previously one


Also debt doesn't cause a decrease in households. if you owe Mr bob £200k and need to sell your house to pay him. He then buys the house for £200k and you rent off him. No net pressure on sales as your debt forced sale resulted in one buyer and one seller


and death is balanced by birth and immigrants not to mention

The number of deaths registered in the United Kingdom (UK) in 2013 was 576,458, an overall reduction of 13% from the total number of deaths (659,101) registered in the UK 30 years ago. The number of deaths declined for both men and women between 1983 and 2013, by 15% for males and 10% for females. These declines have occurred despite the overall increase in population and the ageing of the population

Mistermeaner

As long as demand outstrips supply prices will remain high... even in the gfc for every person who may have lost their job and eventually fell into arrears on their mortgage there was 1000's who didn't lose their jobs and all would be potential buyers of the few repossessions.

Only way to drop prices is to build but building costs money and people will only build if they get paid, hence recession will not lead to more houses a nd therefore will not lower house prices.

Generali

Prices only fall substantially usually when people lose their jobs and become forced sellers en masse. During the last recession a mix of a huge cut in interest rates coupled with people accepting a pay cut to keep their job meant that there weren't enough forced sellers to push prices down.

It is possible that the changes to BTL rules could increase the numbers of forced sellers enough to cause prices to drop especially if interest rates have gone up substantially. I suspect that it's unlikely but that's only a guess.

padington

Generali wrote: »

Prices only fall substantially usually when people lose their jobs and become forced sellers en masse. During the last recession a mix of a huge cut in interest rates coupled with people accepting a pay cut to keep their job meant that there weren't enough forced sellers to push prices down.

It is possible that the changes to BTL rules could increase the numbers of forced sellers enough to cause prices to drop especially if interest rates have gone up substantially. I suspect that it's unlikely but that's only a guess.

Chancellor announces today that new BTl mortgages will be stress tested to try to stop signs of a housing bubble. So new BTL mortgages just won't be an option for many British people soon. Will old BTL landlords get stuffed when they re-mortgage though and then become forced sellers ?

http://www.telegraph.co.uk/news/politics/georgeosborne/11949611/George-Osborne-unveils-curbs-on-buy-to-let-mortgages.html

Another sail taken down.

MobileSaver

Thrugelmir wrote: »

There's considerable financial and economic weakness on a wide broad level. Suggests that a new phase of history is on the cards.

You do realise that HPC have been saying this for TWELVE YEARS?

In those 12 years the likes of Crashy who foolishly believed the HPC mantra have gone nowhere while home-owners have seen their homes value increase by something like 45% - this new phase of history looks very much like the old one... over the long term house prices will keep rising.

The sad thing is that Brit1234, Crashy and the HPC crowd will continue to delude themselves for many more years to come. I wonder if they'll ever finally admit they got it wrong?

chucknorris

MobileSaver wrote: »

You do realise that HPC have been saying this for TWELVE YEARS?

In those 12 years the likes of Crashy who foolishly believed the HPC mantra have gone nowhere while home-owners have seen their homes value increase by something like 45% - this new phase of history looks very much like the old one... over the long term house prices will keep rising.

The sad thing is that Brit1234, Crashy and the HPC crowd will continue to delude themselves for many more years to come. I wonder if they'll ever finally admit they got it wrong?

The thing is though, that people like that will probably regularly make poor financial decisions and end up losing, so if it hadn't have been that, it would have been something else. They put it down to bad luck, and/or the system being against them, but in reality they just blunder through life making poor decisions.

anchovypizza

chucknorris wrote: »

The thing is though, that people like that will probably regularly make poor financial decisions and end up losing, so if it hadn't have been that, it would have been something else. They put it down to bad luck, and/or the system being against them, but in reality they just blunder through life making poor decisions.

You must share with us some of your great wisdom Laddie. I get the impression that I am a little older than you, so have maybe seen a little more in life, maybe.
I am now on my 3rd family home, the present one is hopefully the one we will see our lives out in, but not set in stone, if I am in the unlucky position of seeing my partner leave this world first then I might reconsider that.

Both times we sold up and moved on we made a profit, Mmmm profit, strange thing to measure. If prices fell and rose again during that time we lived there I have no idea, they were family homes, I did not give a hoot.

The "gains" that I made in both sells and the near certain gain I have made now is down to pure and uncontrolled luck, and nothing else.
I find it incredible how people extrapolate their home rising in value as some kind of financial skill.

Like I said I have been around for a while, I have seen events brought to the attention of the masses that in hindsight were building in years that changed the stage over night.

I would be very careful patting yourself on the back continuously, things can and do change very quickly. Luckily I live in a family home where it's value is irrelevant.

Please forgive the emphasising and highlighting of anything to do with money when mentioning house prices, to me personally I see as incredibly tacky and in many ways a sign of extreme insecurity to constantly make the point of money when to comes to homes, so I would like to distant myself from doing so.

To me they are homes, to others property or houses. And I would very much like to see my kids and grand kids have one should they choose, nothing grounds you more. But not at any price.

chucknorris

anchovypizza wrote: »

You must share with us some of your great wisdom Laddie. I get the impression that I am a little older than you, so have maybe seen a little more in life, maybe.
I am now on my 3rd family home, the present one is hopefully the one we will see our lives out in, but not set in stone, if I am in the unlucky position of seeing my partner leave this world first then I might reconsider that.

Both times we sold up and moved on we made a profit, Mmmm profit, strange thing to measure. If prices fell and rose again during that time we lived there I have no idea, they were family homes, I did not give a hoot.

The "gains" that I made in both sells and the near certain gain I have made now is down to pure and uncontrolled luck, and nothing else.
I find it incredible how people extrapolate their home rising in value as some kind of financial skill.

Like I said I have been around for a while, I have seen events brought to the attention of the masses that in hindsight were building in years that changed the stage over night.

I would be very careful patting yourself on the back continuously, things can and do change very quickly. Luckily I live in a family home where it's value is irrelevant.

Please forgive the emphasising and highlighting of anything to do with money when mentioning house prices, to me personally I see as incredibly tacky and in many ways a sign of extreme insecurity to constantly make the point of money when to comes to homes, so I would like to distant myself from doing so.

To me they are homes, to others property or houses. And I would very much like to see my kids and grand kids have one should they choose, nothing grounds you more. But not at any price.

You must be quite an age, calling a 57 year old 'laddie', for the record I'm now in my 9th (purchased) home, although I still own 3 of those previous homes in addition to my current home (and also other property which I have never lived in). There wasn't any great secret, I just spotted that in the early 90's London properties were offering great yields at a time when no one was buying (people were actually handing keys back to estate agents). In fact that was a major factor in why I came down to London from Newcastle. But my comments were more to do with the poor investment choices made by people like crashy, who stores all his wealth in cash (over the long term, i.e. decades, which is absolute madness, cash is extremely unlikely to out perform either property or equities over decades).

Although my portfolio is heavily weighted in property, in recent years I have been investing in shares, although I do now take a low risk approach, protecting what I already have is my objective now. That is why I particularly like Vanguard's VHYL etf, it is very diversified, both in sector and geographically. I will be (at least partially) moving out of property quite soon, to both, take the profit and also in preparation of an easier lifestyle in my retirement (I'm retiring next September).

There isn't that much chance of 'things changing' (as you put it), our mortgages are only approx 12% of the total property value. If anything I should have stayed retired 5 years ago, when I came out of retirement to start my current job, but it wasn't just about the money.

MobileSaver

anchovypizza wrote: »

I find it incredible how people extrapolate their home rising in value as some kind of financial skill.

You are missing the point.

The "financial skill" is the realisation that paying someone else's mortgage via long term renting is a mug's game. It's this the HPC crowd don't get as they wait in vain for their 50% crash in house prices.