Fresh Start about House Prices

DrStep

It does appear that the more expensive properties could have bigger falls to bear.

"The taller they are, the harder they fall"

MattLG

If you look at historical trends alone, we are due for a very VERY big crash. A lot of people are saying that it's different this time because of blah blah Gordon Brown blah blah something else blah blah.

I remember everyone saying that the last time we were in a housing boom too.

My personal opinion is that we should all be watching the oil prices. Remember what happened in the 70s? I was at a service station over the weekend where the super unleaded was 99.9p a litre. The one pound mark could start people panicking. People don't really notice a 1p rise every now and again, but they do notice when the fuel stations need to start using and extra character.

You also have to remember that the people who really control the economy, the super rich, the George Soroses, etc, know that a stable economy is not how they make money. The rich make money from unstable and volatile economies so when they get bored of the "stable" UK economy, they'll do their best to destabilise it enough to make more money.

One other point is that I heard somewhere (not sure of the reliability) that buy-to-let mortgages are on the decrease for the first time on record. Can't be a good sign.

MattLG

Mr_Proctalgia

I wish I knew what to make of it all, where I live (East Mids) the lower priced stuff is selling before they can get a sign up! The higher priced properties are taking about 3 months to sell. I've had 5 valuations on my place, they all came in within 5K of each other, so I guess the price is about right. No I've just read this http://uk.biz.yahoo.com/050719/214/fnngc.html I was considering renting for a while, but am now unsure - Damned if I do and damned if I don't

wibble68_2

MattLG wrote:

If you look at historical trends alone, we are due for a very VERY big crash. A lot of people are saying that it's different this time because of blah blah Gordon Brown blah blah something else blah blah.

The people saying "It's different this time" have a lot to lose if the current housing market bubble turns out the same as it has done in previous bubbles.

Gordon Brown can make claims of producing a stable economy all he want's, but the fact remains that the economy is dictated by events in other countries, particularly the US.

As for a housing market crash? Well who knows.

But with the house price to wage ratios still running at 5-6 times and the market being overvalued by 20 - 30% to the long term trend, I see a long stagnation is the best that could happen.

If prices were to rise steadily in the next 5-10 years this would be the biggest economic freak event in history.

michaels

Say the uk joins the euro where interest rates of all duration have been historically lower - this would imply a near-permanent shift in 'affordability' in terms of prices to income ratios. Can anyone discount this scenario with certainty - the high interest rates everyone seems to now consider the norm are a blip that lasted 30 years from the 1970s, take a longer term perspective and a different picture emerges.

meanmachine_2

michaels wrote:

Say the uk joins the euro where interest rates of all duration have been historically lower - this would imply a near-permanent shift in 'affordability' in terms of prices to income ratios. Can anyone discount this scenario with certainty - the high interest rates everyone seems to now consider the norm are a blip that lasted 30 years from the 1970s, take a longer term perspective and a different picture emerges.

Good point, but I thought our rates have been kept low because of our (original) intention of joining the euro. I can't see that happening now, or in the next 100 years, can you?

But if that is the case, then I'm afraid we'll become like ireland, where houses are up to ten times someone's income. Or in Holland where prices are sky high, even though they're going through a recession.

The thing is, that we have a free floating currency and if US rates go up - like they are - then others, including ours, tend to follow suit. If they don't then sterling goes through the floor (like it is).

deemy2004

The UK housing market fell 1% in June as against 0.2% rise in May.. annual house price inflation is now just 2.4% - On marches the trend to negative annual house price inflation ! And THEN IT WILL hit home ! That the trend is over !

At the moment people still see rising annual house price inflation so assume that they can wait out any weakness. But when they actually see big RED headlines saying that house prices are falling year on year.. then you will get a mad dash for the exit and a large drop in just 1 quarter.

The British economy is slowing.... lets hope the housing market decline does not tip us into a recession !!!

Twopints

Phonix wrote:

Maybe it's ok to prop up the housing market if the banks and the government through shared ownership, pay the cost of the plunge.

No, it isn't. If it's the banks paying they just pass it on in charges or other costs; if it's the government then it's taxes - either way, who ends up paying ?

If the government wants to invest in housing for essential workers then why not build houses for them and let them pay rent. I know, they could be called council houses (government houses?).

Phonix

The key word is 'maybe'.

loopy_lass

er... i dont really understand all this malarky... but answer me this... im considering buying a house in 2 yrs time... is this a cunning plan or not? option is to continue renting.

cheers

loops