House Price Crash Discussion Thread

ManAtHome

abidan wrote: »

like was said in 2001, 2002, 2003, 2004, 2005, 2006, 2007!!! Perhaps they will be right this time but of course eventually they will be they have said it for the last 7 YES 7 years!!!!!

Errm don't think "they" were generally forecasting a crash in 01/02, even 03 things were likely to slow down or level off. Then the banks invented "off balance sheet debt" which could be valued at pretty much what they wanted (100% then, 0-20% now). "Slasher" Greenspan and "Charlie" George decided ultra-low interest rates were "A Good Thing" (for their respective careeers maybe...).

I was part of the "levelling off 2003/4" gang, thinking bank rates would revert to normal/neutral after the 9/11 shock settled - they didn't.

Anyway, wind forward 3 years:
A sizeable bank dead in the water (just in the UK, a few more outside).
Over 1.3 trillion quid in personal debt (£1,300,000,000 - try counting that out).
Knocking on for another trillion quid in state-sector pension liabilities (plus or minus 25% depending on how you do the calculations).
Around 600 billion quid PFI liability (plus or minus 25% depending on how you do the calculations).
Even-widening trade defecit
Ever-expanding government defecit
Inter-bank rates nearly 1% over BoE rates ("normal" is 0.2-0.3%)
BoE stuck in the headlights - do we lower rates to keep the economy going and increase inflation?

Keep buying the bricks - give the rest of the world the chance to buy your country on the cheap...

eco123

Interesting thread.

I am a homeowner, I have a mortgage & my thoughts are...

1. If house prices fall or rise, it's all relative, everyone else is in the same boat. If mine falls so does the one I am buying.

2. We are a small island with housing shortages, supply & demand will keep prices stable (ish).

3. A fall in price would benefit us all I suspect, in a roundabout fashion.

3. Life is too short to worry anyway.:rolleyes:

John_Pierpoint

The Zeitgeist (meaning spirit of the times) has tipped. I have received a spam Email; it's purpose is to make me pay out 60 (ish) GBP for a year's subscription to a magazine called "Money Week".
There are the best part of a 40 "screenfuls" of the stuff, the vast majority of it suggesting we must get out of property because there are at least 4 lean years ahead. (Then there is a plug for the mag and the Email tips service to help us understand how to reinvest the capital to make another fortune).


I think their Email covers most of the arguments; what it really boils down to is: New build is insignificant compared with the volume of pre-owned sales.
Demand is need plus cash. The banks won't lend the cash on a cheap and easy basis, so here comes the crash right on Q as part of an 18 year cycle.

It is a brave man who buys property in the next 6 months, while we wait to see if Labour will devalue the pound in your pocket.

LisbonLaura

eco123 wrote: »

3. Life is too short to worry anyway.:rolleyes:

Agreed, unless you are a first time buyer having to compete with those that want to own more than one property. (& yes I'm including second home owners in that)

Greed is loathesome, especially so when it deprives others of a basic need.

A civilised nation is one that does not force its less well placed to prostitute themselves to get a roof over their heads.

In the coming debacle (& it will happen) many innocents, fooled by the weight of vested interest house price hype, will lose their homes & be in debt for many many years.

hgllgh

abidan wrote: »

but just becuase everyone says it will fall and everyone wants it to fall does not mean to say it will!

errr ... if EVERYONE is saying it will fall ... and er ... EVERYONE wants it to fall ... then errr ... it will fall.

codger

abidan wrote: »

I give in, obviously codger you are a bitter old man who does not want to hear any other opinions but your own or others in agreement with you that property prices will fall. I tell ya what i agree with everything you said, listen everyone house prices will plummet and you will all get rich by taking advantage of it!! Is that what you want to hear, well there ya go, i hope you get some satisfaction from it as you so obviously need house prices to fall codger or you would not be fighting your corner so aggressively!!!

Here is a good site for you to look at where most analysts including the renowned savilles do not believe a house price crash is around the corner for 2008. Most belive it will flatline or rise with very few suggesting a fall.
http://www.housepricecrash.co.uk/#statistics

I'm not bitter. Just baffled.

You've said the UK property market is no place for a sensible investor because it'll show no growth for years to come.

Why you need an entire website to convey a single sentence escapes me.

Me, I think you'd do your website readers a favour by qualifying that along the lines of "because at best, it'll show no growth, at worst, prices will fall and equity values diminish." But hey. It's your website.

As to the bulk of the stuff you're posting here, all I'd say is that it's like being continually reminded of a game between two football clubs at some time in the past.

Since then, the players, the management, the pitch and the weather conditions have all changed.

So whatever the historic outcome of the yesteryear game, it has absolutely no bearing on the outcome of today's.



PS: Savilles is, er, "renowned" as an estate agent.

Mac_Sami

Here's a good one - I was looking at a flat last week, to get an idea of what properties are available and also what things I need to be looking out for / which questions I need to ask. I'm certainly not looking to buy for at least 6 months (I'm a first time buyer), so I guess I'm an estate agent's worse nightmare, as I'm just browsing to gauge an idea of what my money will buy me.

The best part was when the estate agent turned around and said that I shouldn't buy for 6 months, as they keep re-valuing their properties on a monthly basis, and the values are falling.

It's the first time I've heard an estate agent not trying to sell something! But another indicator that times are changing for the housing market.

WTF?_2

More fuel to the house price crash fire:

http://www.guardian.co.uk/business/2007/dec/03/houseprices.marketturmoil


Doesn't look good for the 'at worst, prices will flatline' crowd, does it?

It's rather telling that they assume that everyone predicting what looks more and more like a cert is somehow gleeful about it, or wants it to happen. That sounds more like denial on their part as they seek to ignore some very solid arguments.

Those smart enough to see and take on board the facts will be in a better position to deal with the problems caused by a crash when it happens.


Hopefully this thread will at least give some warning to the general readership of the board who might not have been aware of the issue. Too bad that the 'head in the sand' brigade have been so vocal in trying to suppress the debate - to the extent where all house price crash related talk has been squeezed into a single thread. I note that it's one of the most popular threads in the group.....

codger

abidan wrote: »

So Codger why are you on this forum? Do you want prices to fall? Have you got a house? You obviously have a vested interest in a fall but you wont tell anyone why?:D

My apologies: I've only just noticed your giggly post.:D

I don't have "a vested interest" in a fall in the values of UK house prices.

I do have "a vested interest" in a rise in the values of UK Society.

That's because I prefer the notion of an equal Society to an unequal one. A functional economy to a dysfunctional one. Responsible financial institutions to irresponsible ones. Competent governance to incompetent governance.

The reason for that is not because I'm a bleeding heart liberal, rather that it's been my experience that the economic consequences for a balanced Society are infinitely more attractive than the economic consequences for an unbalanced one.

I don't give a worm's tail for the fate of speculators and investors.

I do care about a house price / earnings ratio so absurd that the UK is now seeing the highest proportion of its wealth not being spent on products, goods and services which will help keep the wider economy healthy but which is instead going into repaying property debt -- and all the other debt that's occurred in consequence of that.

I do care about a widening socio-economic divide that has seen those who have nothing being progressively more and more disadvantaged by those who already had something being progressively more and more advantaged.

I do care -- passionately -- about individuals and families who through a malign conjunction of time and circumstance are unable to "get on the housing ladder".

And arising from that, I do care about a generational divide between those like myself who took it for granted that home ownership was an achievable consequence of following the work ethic, and those like my son and his friends who can now rightly be forgiven for looking at that ethic and thinking it's pretty darn hollow if the dispossessed stay dispossessed.

I do care about tomorrow, rather than all the yesterdays you keep looking for in your innumerable Google trawls.



With your girlish giggles, you will no doubt find that amusing. Feel free to have a laugh.

GreenNinja

Just something I thought I would add to the discussion, personally I am not sure I have an opinion either way on this subject as I don't feel qualified to make a judgement.

However... I work for a small independent housebuilder in the Fareham, Hampshire area. Our Printing company that we use in Bournemouth for our brochures called this morning chasing money. It seems over the weekend that a large client of theirs, a housebuilder in Bournemouth has gone bust owing them for 5 brochures at 8 grand a time! The properties that this housebuilder has are only half finished so not sure what will happen there, whether the receivers will continue building?? or whether they will just remain unfinished.

Its something to think about anyway, maybe its just a one off, maybe its the start of something, I don't know......