House price inflation here to stay?

wotsthat

Crashy_Time wrote: »

And will be lower still when the props fall away.

I've been asked by the boy that cried wolf to remind you when you wrongly say the same thing year after year people don't place much value in what you say.

I mentioned this to a couple of stopped clocks and, I'm afraid to say, they're just laughing behind your back.

Jhoney_2

@Thrugelmir

Thanks, yes the causes I understand a little, but the implementation of that directive would no longer be binding when brexit occurs. Whether it is a good idea is another question.

@ Crashytime #11

The thing is they will just 'keep' propping it up though won't they? E.g the banks have just been told by Mr Carney that they do not have to hold as much liquidity as they were told to a few months ago - in the hope that they will use it for lending - to the tune of 150 Billion ..

The BoE said they have trillions at their disposal last week- so no financial (or property crash) anytime soon - the UK simply couldn't afford the ensuing repossessions, bankruptcy etc, IMV. That horse bolted pre 2007.

If they are responsible for inflating the (property) market (?), it will continue to do so for the foreseeable- mark my words. In doing so, low rates and financial certainty will prevail... albeit eventually.

On the other hand, those who rent may see increases due to supply/demand conditions in that market whilst people sit tight in their starter/family homes and buyers wait to see how things develop over time. New homes cannot keep pace.

Some vendors may reduce/adjust their pricing for a sale, but not in significant numbers e.g the entire chain - but if you cannot negotiate that upwards as well as pass it on to buyers, only those under pressure to sell, would move.

That's what i'd do - whether I sold for a penny or a pound, if I could not reach/achieve my onward purchase, I wouldn't go anywhere.

The bottleneck at the FTB end will cause the same issue - increasing house prices due to demand.

That's just my opinion which is as good as anyones at the moment, lol.

Thrugelmir

Jhoney wrote: »

@Thrugelmir

Thanks, yes the causes I understand a little, but the implementation of that directive would no longer be binding when brexit occurs. Whether it is a good idea is another question.

The fact is that many financial institutions lent irresponsibly. Some requiring nationalisation, the remainder takeovers. 8 years on, UKAR still has £70 billion of mortgages on it's books. There's still a lot to be resolved in the next 10 years or so. Problems simply just disappear.

MMR was a necessity introduced before any EU directive. As the UK had a worse problem to address than any other EU state. Not going away anytime soon. Similar regulation will no doubt follow on unsecured lending as well.

Jhoney_2

Yes, but IIRC elements came in additionally, specifically from EU e.g c. Jan 2015 and I wondered if those would go on Brexit. Sorry I wasn't clear.

Makes no personal odds, but I think the correction went a bit too far for borrowers in relation to affordability as there is very little corrolation to the average wage/house prices.

It's all very well people saying that now having closed the gate behind them, but I think it's much harder for the next generation on all fronts and we are from a culture whereby we mostly aspire to buy our own home.

I think a lot of issues came together for Brexit to have occurred and I just hope someone takes the opportunity to sift, examine and try to adddress them rather than just the mechanics of leaving.

I nominate you, I bet my house you have relevant experience in finance. lol.

Appreciate you reply, thanks.

Thrugelmir

Jhoney wrote: »

Yes, but IIRC elements came in additionally, specifically from EU e.g c. Jan 2015 and I wondered if those would go on Brexit. Sorry I wasn't clear.

HSBC never relaxed their conservative lending policies even in the boom times.

After Lloyds has spent 7 months reviewing HBOS's mortgage book after the merger. Their stated view was that they would never had underwritten around 30% of the business using their lending criteria.

Light touch regulation went too far. Banks became retailers selling volume rather than quality of business.

cells

Thrugelmir wrote: »

HSBC never relaxed their conservative lending policies even in the boom times.

After Lloyds has spent 7 months reviewing HBOS's mortgage book after the merger. Their stated view was that they would never had underwritten around 30% of the business using their lending criteria.

Light touch regulation went too far. Banks became retailers selling volume rather than quality of business.

uk lending was sound and prudent. it took a worldwide credit crunch to topple banks it wasnt the debt underwritten in the uk. As Hamish keeps reminding us even the worst loans from northern rock turned out to be profitable including defaults

padington

cells wrote: »

The guy needs to at least look at the UK as regions not as one universal housing market. And the various regions have performed quite differently and will do again IMO.

Also he doesn't seem to understand or investigate why prices were so low in the mid 1990s especially for London. Without factoring in that he will over estimate the trends. I very much do not expect the next 20 years in London to be as strong as the last 20 years. If that happened the average price for a 3 bedroom ex council flat would be circa £3.5 million and with inflation so low that's close to about £2.5 million in today's money.
That's just plain stupid and crazy. It would also mean the value of just London residential property would be in the region of £12 trillion. That's just such a stupid figure its clearly not going to happen.

Simply put don't expect the same performance over the next 20 years.

He's not predicting a boom for the next 20 years, just 4 years then a crash. He's also predicting lower prices in some over priced London flats. Boom elsewhere though. He's been right for years and was right that Osborne was telling a pack of lies too about emergency budget, raised interest rates etc.

cells

These are the results over the last decade from Land registry (April 2006 --> April 2016)

Northern Island -18%
NorthEast -7%
Wales +4%
North West +7%
Yorkshire&Hum +9%
West Midlands +15%
East Midlands +15%
Scotland +19%
South West +23%
East Eng +32%
South East +47%
London +91%

UK +27%

If you can show me an article from him that predicted anything close to the above my hats off to him

What the above shows is that the UK average is mostly meaningless people dont buy one UK unit of property they buy in a certain region. This is why the banks when they use indexation figures for remortgages dont use the UK figure but the regional figure.

UK Property has not been a great investment over the last 10 years apart from London and to a much lessor degree the South East. Even in London there has been a divergence between inner London which has done better than outer London.

lisyloo

cells wrote: »

UK Property has not been a great investment over the last 10 years apart from London and to a much lessor degree the South East

If it's geared and on extremely cheap finance, then it looks a lot better. I'm still stoozing my mortgage.

Thrugelmir

lisyloo wrote: »

If it's geared and on extremely cheap finance, then it looks a lot better. I'm still stoozing my mortgage.

I'm happily totally debt free. Cash is king :beer:

Currently investing in RMBS at a nice yield in my SIPP.