House Price Crash Discussion Thread

m00m00

chriseast is the person who made the comment about 'true value' being hard to determine.

on another note

http://news.bbc.co.uk/1/hi/business/7120460.stm

it's definitely starting to bite when this lot of VI's cry like babies so publicly

John_Pierpoint

abidan wrote: »

"Coming up to christmas is always a slow time for the housing market,..

The Nationwide figures are seasonally adjusted.

codger

abidan wrote: »

Yes eventually there will be a correction of sorts but people have been saying it for years!!!
. . . Forums like this prove that people are desperate for house prices to fall and as such that measn they are desperate to buy, as i say, just as soon as they fall people start buying again, i would not say they will go up much but i dont reakon they will go down much either!!! The only way house prices will start to go downis if the countries ecconomy starts to falter dramatically and unemployment rises!!! We are coming into a new era where parents remortgage to help their children buy houses and until people stop seeing owing a house as crucial to your financial future dont expect any major correction in the housing market!!!!

Abi Andrews

Obviously you're enthusiastic about this subject, Abi. Unfortunately your posts and your site possess that quality to so great a degree of exclusion of all else that you could wind up misleading a lot of people in a situation where they deserve better.

Socio-economics can't be stripped down to the kind of simplicities you are citing. You cannot, for instance, contend that a buoyant market will be sustained thanks to a) a new era where parents remortgage to help their children buy houses and b) divorce is rising

(b) directly counters (a) Isn't that obvious to you? And both are hapless generalisations anyway. There's no reliable commonality of effect because there's no reliable commonality of cause:

The divorce rate amongst high income earners with an only child; the divorce rate amongst middle income couples with three children; the divorce rate amongst low income couples with two children. . . What are you trying to extrapolate from that?

Yes, you might contend that a middle income couple with an only child should theoretically be better placed to "help their children buy houses" than a middle income couple with four children. But why bother to contend even that?

The middle income couple with one child could just as well be unable to do any such thing because (a) it's a second marriage and (b) one or other is subsidising their former partner's home and lifestyle.

Or they can't stand their kid / kids anyway and are going to sell up and bog off round the world in a camper-van.



What you're citing as supportive evidence for your argument is actually doggerel. And the problem is, you're running a website that's over-stuffed with it. I don't believe you're the kind of person who would ever deliberately mislead anyone. But the "advice" you're giving really should show more care towards its likely audience.

Telling someone with a leg injury they can keep on running because it's only an abrasion is not a diagnosis that can later be excused with an "oops, sorry!" if gangrene sets in.

codger

m00m00 wrote: »

http://news.bbc.co.uk/1/hi/business/7120460.stm

it's definitely starting to bite when this lot of VI's cry like babies so publicly

Definitely.

Poor ol' Mervyn though.

Life's getting seriously complicated now, having to consider the impact on all the poor dummies that these particular babies will be only to willing to throw out of their prams.

Turnbull2000

abidan wrote: »

Don't understand Turnbull, what's to laugh about, look at the stats!

Still laughing :rotfl:

Is this your cousin who runs a similar site?

"One persons problem is another persons joy and if first time buyers cannot buy they will rent which is excellent news for landlords and property investors"

In summary, we expect to see good continual growth in both the property and rental market the UK certainly for the next decade. And we could potentially see another ‘golden decade’ of property price growth meaning the prospects for the buy to let market are very positive indeed.

codger

Turnbull2000 wrote: »

Still laughing :rotfl:

Is this your cousin who runs are similar site?

Quote:
In summary, we expect to see good continual growth in both the property and rental market the UK certainly for the next decade. And we could potentially see another ‘golden decade’ of property price growth meaning the prospects for the buy to let market are very positive indeed.

Un-be-liev-able.

Which area of Planet Plonk are these websites operating from?



Oh, excuse me. General Custer wants a word. He says our situation will improve if only I can find more Indians.

:eek:

Pobby

Well I know it`s The Daily Mail but

---

http://www.thisismoney.co.uk/house-price-crash

codger

Pobby:

Daily Mail or no, it's a well-researched and well-written report. (Apart from, er, one bit at the end. . ?)

"The average house price of £198,500, according to Halifax, stands at 8.5 times the average salary of £23,300, according to the Office of National Statistics."

As a definition of the unsustainable, that's hard to beat.


"The term house price crash is an evocative one, conjuring up images of stock market-style collapses - but, of course, this is not the way that property prices work.

The Black Monday stock market crash, 20 years ago, saw the Dow Jones lose 23% and the FTSE 100 lose 11% of their values in one day, with the FTSE 100 losing a total of 26% during the month of October.

When house prices crash you do not walk past the estate agents one morning to find every price has been cut by 10% overnight. For starters, it is an illiquid asset - most people live in their homes and are unlikely to sell them because the price will fall.

Instead, a property slump starts with a steady drip of monthly negative growth or stagnation that is compounded over time and further exacerbated by inflation.
The 1990s property crash saw this happen, with Halifax average prices peaking at about £70,000, in 1989, before a long run of stagnation and monthly losses – with average prices generally falling by less than 1% a month. By the time this run finished in 1995, the average house price stood at £61,000."

Dead right.


"The biggest threat to the property market today is from debt.

The UK has a personal debt mountain of £1.3 trillion - double the amount five years ago - and although Bank of England figures show a slowdown in mortgage approvals, homeowners are still borrowing £1bn per day.
There are indications that borrowers are increasingly struggling to pay mortgages and personal debts, with repossessions and bankruptcy on the increase. If inflation picks up substantially, forcing further rises in interest rates, many more people could be in trouble, especially if lenders are found to have been dishing out cash recklessly, as many believe."

Spot on.

Conclusion:

"Barring a major economic shock I would suggest house prices will rise at about 2 - 3% annually for the next few years, posting little real increases in value, with interest rates of around 6% here to stay."

Well, I guess if after elucidating all the elements of the equation and still coming up with a total where 1+2+3+4 = 5, fair enough. . .

A few more petrol additives in the form of tax hikes so as to make a litre of fuel at the pumps the same price as a litre of wine on the shelf is well within this Government's model of economics.

But then, Mr Brown always was to that subject what an elephant is to ballet dancing. . .


:eek:

Pobby

Well we have the Daily Mail,now hows about the Gruniard

http://www.guardian.co.uk/money/2007/sep/23/houseprices.buyingtolet

Oh dear,hasn`t the sentiment changed.Did people really think that IRs would be around 3% for ever????

codger

Pobby wrote: »

Well we have the Daily Mail,now hows about the Gruniard

http://www.guardian.co.uk/money/2007/sep/23/houseprices.buyingtolet

Oh dear,hasn`t the sentiment changed.Did people really think that IRs would be around 3% for ever????

Some good stuff there: nice to see a writer noting the difference between 'professionals' and 'amateurs' in BTL.

(Though yet again, one has to wonder at the house-brick density of what passes for a brain at The Treasury: must it always -- as with CGT reform -- so assiduously embrace the law of unintended consequences?)

The ratio of amateur-owned BTLs to 'professional'-owned BTLs is something we're not going to be able to even guess at for the time being but come Spring it'll be fascinating ( if that's the word) to see the picture then.

Not so much a case of waiting to see what comes out of the woodwork, as how much of the woodwork comes out. And falls down.