How low will property go?

AG47

Real terms or non inflation adjusted, we are still looking at falls across the board whichever way you look at it

bobbymotors

michaels wrote: »

I thought he said inflation not wages?

I did, yes,thank you

NOTHING on earth can outstrip wage growth over the long term, because if it did, eventually the entire wealth of the country would be in that thing,be it houses, shares, whatever.

bobbymotors

AG47 wrote: »

Real terms or non inflation adjusted, we are still looking at falls across the board whichever way you look at it

possibly in the short term, yes, maybe for a few months or perhaps a year, if it happens.

But it will all come back again, because money is so cheap to borrow

cells

AG47 wrote: »

Real terms or non inflation adjusted, we are still looking at falls across the board whichever way you look at it

9 regions in the UK are already cheaper in real terms than they were a decade ago. This is the problem with the crash wishers they completely ignore the fact that housing is regional and in 9 regions of the UK a house with a mortgage is very affordable arguably down right cheap.

In those regions the interest you pay is lower than renting the local council stock. Often much lower. A £125,000 with £25,000 down and 2% interest only costs £170 a month in interest. Theocal council will charge 2.5x that in rent.

westernpromise

AG47 wrote: »

Real terms or non inflation adjusted, we are still looking at falls across the board whichever way you look at it

...spun the short, talking his book.

Garethgrew

AG47 wrote: »

Real terms or non inflation adjusted, we are still looking at falls across the board whichever way you look at it

At the moment we have inflation in some things

AG47

cells wrote: »

9 regions in the UK are already cheaper in real terms than they were a decade ago. This is the problem with the crash wishers they completely ignore the fact that housing is regional and in 9 regions of the UK a house with a mortgage is very affordable arguably down right cheap.

In those regions the interest you pay is lower than renting the local council stock. Often much lower. A £125,000 with £25,000 down and 2% interest only costs £170 a month in interest. Theocal council will charge 2.5x that in rent.

Soon could it be every part of the U.K. Is cheaper in real terms across the board?

cells

AG47 wrote: »

Soon could it be every part of the U.K. Is cheaper in real terms across the board?

Long term, second hand property for much of the country (and much of the world) will go towards 'worthless'. Much of Germany is already there with the biggest REIT owning something crazy like 150,000 properties with an average value of 40,000 euro each.

This is simply due to demographics (flat or shrinking population) and the continuation of building additional new homes which will make second hand stock 'worthless'.


This however will not apply to some cities which will continue to grow even as the host country stagnates or shrinks in population.

So long term many of the regions of the UK will go towards worthless while London might be much much more expensive. We have already actually seen this as London prices have diverged from rUK

I'm not yet sure if this will be a net positive or negative for the nations biggest asset class to become worthless

Prothet_of_Doom

On the one hand, I'd be happy if prices fell to 1998. That way I could move into my dream home, without actually having to sell this one.

On the other hand my investment property would be significantly in negative equity by about £60K, and assuming rents took a similar dive, I'd be paying someone to live there. Although that might be tax efficient ?

Nebulous2

cells wrote: »

This is simply due to demographics (flat or shrinking population) and the continuation of building additional new homes which will make second hand stock 'worthless'.


This however will not apply to some cities which will continue to grow even as the host country stagnates or shrinks in population.

So long term many of the regions of the UK will go towards worthless while London might be much much more expensive. We have already actually seen this as London prices have diverged from rUK

I'm not yet sure if this will be a net positive or negative for the nations biggest asset class to become worthless

It doesn't have to be like that if you have a transfer of money from prosperous areas to those which are struggling.

That's what needs to happen - some of the wealth from London needs to be used to develop other areas. Otherwise you will end up with everyone except a few pensioners in London.

That is also something which the EU was pretty good at, with the regional development funds helping to halt the decline in the Highlands of Scotland, in Ireland and more recently in parts of Eastern Europe.