Is property in a bubble?

AG47

While it is true that about 95% of the U.K. Has not yet been built on, some of it has to stay green beautiful areas. How would you like it if all the UK ended up like one big mega city?

Well I suppose it wouldn't be too bad as long as there are some beautiful parks.

pop_gun

To say property is in a bubble is to assume there will be a correction. If that was going to happen it would've happened already. Instead property prices will continue to double every 8 years or so until a new bretton woods agreement is hammered out between the world powers.

Imagine mortgages at 30x the average wage. Where even a IO mortgage is impossible to repay. Where you need shared ownership to buy a property.

Electrum

AG47 wrote: »

If you
look at the official definitions of a bubble and think of the
property market for each one.
1. popular mania? YES
Property prices are on everyone lips, in the news and everyone
loves to talk about them.
2. excessive debt? Oh YES!
Very excessive debt compared to the long term norm of about
3.5x income.
3. greater fool theory? Most definitely.
People do not mind excessive debt, if they think there will be a
greater fool who will value their property even high in the future.
4. high volumes at variance with intrinsic values? Yes by every
metric you look at. Especially London.

Yes by these metrics property is one big phat bubble.

But as long as the money lending keep going at such low interest rates then the bubble can be expanded even more.........

Electrum

pop_gun wrote: »

To say property is in a bubble is to assume there will be a correction. If that was going to happen it would've happened already. Instead property prices will continue to double every 8 years or so until a new bretton woods agreement is hammered out between the world powers.

Imagine mortgages at 30x the average wage. Where even a IO mortgage is impossible to repay. Where you need shared ownership to buy a property.

Its impossible for house prices to double again in the next 8 years, even the doctors and lawers could not afford to buy a house, especially as interest rates are going back upto normal

GreatApe

No UK property is not in a bubble if anything most the country is undervalued

Scotland Wales Northern Ireland North and Midlands all cheap so cheap that you can find properties for near or below build cost

triathlon

AG47 wrote: »

If you
look at the official definitions of a bubble and think of the
property market for each one.
1. popular mania? YES
Property prices are on everyone lips, in the news and everyone
loves to talk about them.
2. excessive debt? Oh YES!
Very excessive debt compared to the long term norm of about
3.5x income.
3. greater fool theory? Most definitely.
People do not mind excessive debt, if they think there will be a
greater fool who will value their property even high in the future.
4. high volumes at variance with intrinsic values? Yes by every
metric you look at. Especially London.

I can make you a good argument that property right now is undervalued like I did 5 years ago and was proven right. There are in total 117 million bedrooms in the UK with many more that could converted or even shared. UK housings only problem is that there are too few people in our homes which is rapidly changing thanks to a more ambitious and driven immigrant population that have no issues with even sharing a bed once the other person has got out.

Too many British have been pampered for too long, there is ample property out there, some people just need to adjust.

societys_child

I didn't buy a bubble, I bought somewhere to live.

It worked out pretty good . . .

lisyloo

there is ample property out there, some people just need to adjust.

A hope is not the same as making something happen.
If some people are over-occupying and are unaffected by prices or interest rates then how will they adjust?
If you are waiting for them to die-out you might be waiting a long time as some people own in their 40s.

I personally wouldn't object to a tax on over-occupation but others would call that theft.

apollo9

I haven!!!8217;t really thought about property values but I am now choosing to buy a place to live.

I am staggered that 3 bed houses have gone up a lot more than the house I am vacating. The values have increased by over £1000 pw over a 5 year period.

If I buy can I really expect a capital gain (in London).

lisyloo

I am staggered that 3 bed houses have gone up a lot more than the house I am vacating.

Are you moving areas?
Can you say where from and to?
It could be that the area you're moving to is popular with families and that's why 3-beds are popular in that area.

If I buy can I really expect a capital gain (in London).

Why are you bothered about capital gain if you are buying it to live it?
If you are going to live in it long term (more than 5 years) it's a racing certainty that it will be cheaper than renting.

I think London will remain fundamentally popular so if you are buying a family home in a decent area then it's likely to remain attractive.