"Housing Market Slumps"

brit1234

ukcarper wrote: »

People have been saying that for years high prices don't mean a bubble, prices could stall and fall if demand decreases but I don't think prices will fall dramatically unless the economy crashes.

Help to buy, foreign investors and savers putting their money into property due to low interest rates contributed massively to the bubble.

To see it bursting you have to look at the removal of those things above. We know the stamp duty changes and foreign capital controls are having a massive effect in London with prices falling. However capital controls have made cheaper cities targets for foreign investors pushing prices up further north.

The stamp duty on 2nd homes is having a big effect reducing southern buy to let investors and those owners who want to keep their existing homes whilst buying new ones.

Things are leading to spreading price falls apart from Help to buy. Whilst help to buy is pretty non existing in central London it is maintaining prices on the outer edges and rest of country. If that was to go prices would fall very fast in rest of country and slow down building. It will be interesting to see what happens with the Landlord tax changes this April.

Windofchange

Guess we'll have to agree to disagree then. High prices don't mean there is a bubble no, but add in the speculation to the picture and I think it gives a pretty compelling label. The Battersea power plant development for instance up the road from me - loads of units snapped up by people who have tried to flip them for a quick profit. You can put your savings now into companies that buy up properties.

Time will tell. I think a lot of people will look back at this period and think how did we not see this coming. I am however accepting that I may be proven wrong again, in which case the only people left in London will be the poor cleaning the pristine toilets of the world's elite.

ukcarper

Windofchange wrote: »

Guess we'll have to agree to disagree then. High prices don't mean there is a bubble no, but add in the speculation to the picture and I think it gives a pretty compelling label. The Battersea power plant development for instance up the road from me - loads of units snapped up by people who have tried to flip them for a quick profit. You can put your savings now into companies that buy up properties.

Time will tell. I think a lot of people will look back at this period and think how did we not see this coming. I am however accepting that I may be proven wrong again, in which case the only people left in London will be the poor cleaning the pristine toilets of the world's elite.

As I said I think prices are to hight but to say there is a bubble implies that there is no foundation for the high prices. As I said I can sea circumstances where prices will stop increasing or fall, but if you are expecting the 50% crash often predicted I think you will be disappointed.

ukcarper

brit1234 wrote: »

Help to buy, foreign investors and savers putting their money into property due to low interest rates contributed massively to the bubble.

To see it bursting you have to look at the removal of those things above. We know the stamp duty changes and foreign capital controls are having a massive effect in London with prices falling. However capital controls have made cheaper cities targets for foreign investors pushing prices up further north.

The stamp duty on 2nd homes is having a big effect reducing southern buy to let investors and those owners who want to keep their existing homes whilst buying new ones.

Things are leading to spreading price falls apart from Help to buy. Whilst help to buy is pretty non existing in central London it is maintaining prices on the outer edges and rest of country. If that was to go prices would fall very fast in rest of country and slow down building. It will be interesting to see what happens with the Landlord tax changes this April.

You've been predicting this crash for years and I doubt very much if prices will fall to the level they were when you started predicting 50% falls.

westernpromise

ukcarper wrote: »

You've been predicting this crash for years and I doubt very much if prices will fall to the level they were when you started predicting 50% falls.

Here are some gems from Brit1234 from just a few years ago:

January should be down as well but after that things will pick up especially with loads of gullible people after help to buy.

Looking forward to the mortgage rate rises coming with end of funding for lending and other stuff. - Jan 2014
https://forums.moneysavingexpert.com/discussion/comment/64353090#Comment_64353090

From my point of view the economic conditions only mean prices are going to continue falling. I am personally waiting for bigger drops. - Oct 2010
https://forums.moneysavingexpert.com/discussion/2781306

At the moment we have a huge housing bubble which will go properly pop at any time, especially in London. - July 2012
https://forums.moneysavingexpert.com/discussion/comment/54821049#Comment_54821049

house prices fell this year and will fall next year, it's a buyers market - Dec 11
https://forums.moneysavingexpert.com/discussion/3669521

I recommend all first time buyers to hold off buying, keep saving those deposits and enjoy the continuing price falls. You will save a fortune and get protected from the dreaded negative equity. - Dec 10
https://forums.moneysavingexpert.com/discussion/comment/38960258#Comment_38960258

the price falls are set to continue and our needed for first time buyers and future generations. - Mar 2011
https://forums.moneysavingexpert.com/discussion/comment/42447552#Comment_42447552

Better rent and save as house prices continue to crash. We have a huge housing bubble which is deflating. - Nov 08
https://forums.moneysavingexpert.com/discussion/1273961

Prices are going to fall and stagnate in these ten years - Sep 09
https://forums.moneysavingexpert.com/discussion/1958779

I think the estate agent trying to get a quick sell before people realise prices are falling again. May be a good thing rather than chase the market down. - Mar 10
https://forums.moneysavingexpert.com/discussion/2312991

You could be trapped in an expensive home that rapidly falls in value and you can never sell. - June 2010
https://forums.moneysavingexpert.com/discussion/2565021

The internet is a cruel place for crash trolls...it never forgets. brit1234 has been predicting a crash for 8 years now during which house prices have gone up about 45%
http://www.tradingeconomics.com/united-kingdom/housing-index
so I sure hope nobody took any of Brit's free advice...

Are Brit1234 and Crashy Time the same person?

GreatApe

We live in a country which has in excess of £10 trillion in wealth (and growing), where in excess of £200 billion annually is left in gifts and inheritances.

House prices in London as high as they are are nothing compared to this. To buy all the homes sold in London in a year would only take £60-70 billion while the gifts and inheritances left annually are £200 billion.

So when the crash cheerleaders cry that prices are high vs wages or unsustainable or its a bubble remind them that prices are so cheap the show can go on with just gifts.

economic

GreatApe wrote: »

We live in a country which has in excess of £10 trillion in wealth (and growing), where in excess of £200 billion annually is left in gifts and inheritances.

House prices in London as high as they are are nothing compared to this. To buy all the homes sold in London in a year would only take £60-70 billion while the gifts and inheritances left annually are £200 billion.

So when the crash cheerleaders cry that prices are high vs wages or unsustainable or its a bubble remind them that prices are so cheap the show can go on with just gifts.

how much of those gifts/inheritances are in london property? i would imagine a substational amount. so if it is used to buy a london property, another london property may need to be sold.

Windofchange

GreatApe wrote: »

We live in a country which has in excess of £10 trillion in wealth (and growing), where in excess of £200 billion annually is left in gifts and inheritances.

House prices in London as high as they are are nothing compared to this. To buy all the homes sold in London in a year would only take £60-70 billion while the gifts and inheritances left annually are £200 billion.

So when the crash cheerleaders cry that prices are high vs wages or unsustainable or its a bubble remind them that prices are so cheap the show can go on with just gifts.

Except that half of that wealth is owned by 10% of the population:

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/dcp171776_428631.pdf

How many people do you know who will get left 500k or more in a will? Maybe you hang out in classier circles than myself, but I can think of a handful at best. Don't know if you've seen the news but the super rich are getting the heck out of property. What about the number of people who have already accessed their inheritance through BOMAD paying a deposit? We'll see how your theory holds out in the coming years I guess.

BikingBud

GreatApe wrote: »

We live in a country which has in excess of £10 trillion in wealth (and growing), where in excess of £200 billion annually is left in gifts and inheritances.

House prices in London as high as they are are nothing compared to this. To buy all the homes sold in London in a year would only take £60-70 billion while the gifts and inheritances left annually are £200 billion.

So when the crash cheerleaders cry that prices are high vs wages or unsustainable or its a bubble remind them that prices are so cheap the show can go on with just gifts.

What is the basis for this wealth?

Someone's perception of worth?

Tangible assets?

Or the Emperor'?s shiny new clothes?

@carper - What crash are you talking of, there has only been constant feeding of the debt machine with various ill considered schemes to extend the subservient life of the debt slaves. After all the principle of selling to the highest bidder will not force prices excessively and inexorably upwards if we only lend on affordability criteria.

GreatApe

economic wrote: »

how much of those gifts/inheritances are in london property? i would imagine a substational amount. so if it is used to buy a london property, another london property may need to be sold.

So what's the problem or insight in your statement?