There will not be a crash

carolt

pickles110564 wrote: »

does 110564 mean anything?

Aaah. Too clever for me! :rolleyes:

fc123

mr&mrs wrote: »

A quote from a recent Ikea magazine:

Hey...nice whole page pic of me in the current issue too;)

Pickles..we have same birthday i'm just 1 yr earlier..

talksalot81

Addy1 wrote: »

Become a policeman then. They start on 23k in NI, rising to over 27 after 5 years service. (not forgetting generous overtime)

Nowdays it isn't much more dangerous than working in some parts of Birmingham, Manchester or London.

No qualifications needed and it is a great career with a good pension.

There are the jobs there if you want them, but you might prefer a nice office job I suppose.

I am not complaining about my situation. I have my doctorate and I have some experience so I am not so limited! My point is that most people here (or anywhere) do not have this advantage and they are typically fighting for jobs paying about £10k less upon entry than those which were proposed to be so common and easily available.

You maybe are unaware but the police force is not an easy option here for more reason than the public - equal opportunities make it quite difficult for large parts of the community!

Pickles110564: At no point have i moaned. As I note above, I am fortunate enough to be well ahead of the bell curve in NI.

No one has addressed the point I have made. "There will not be a crash". I have highlighted an area with housing costs similar to those in the SE but which has salaries significantly lower. How can the bottom of the ladder possibly survive? FYI, the co-ownership scheme has recently been closed.

nelly_2

talksalot81 wrote: »

No one has addressed the point I have made. "There will not be a crash". I have highlighted an area with housing costs similar to those in the SE but which has salaries significantly lower. How can the bottom of the ladder possibly survive? FYI, the co-ownership scheme has recently been closed.

You havent made a point though its just a guess and if I offered you £1000 to list your list of absolute proofs there will be no crash I will owe you nothing because you simply have no clue

You cannot say 100% deffinate it is simply your opinion!

Generali

talksalot81 wrote: »

No one has addressed the point I have made. "There will not be a crash".

I thought I tackled that point quite well. Prices rise when demand exceeds supply. They fall when supply exceeds demand.

If you're trying to look at why the price of something has changed dramatically then you need to look at the drivers of supply and demand and ask yourself, 'What's changed?'

IMO, demand has been driven by funds available to borrow to buy housing being freely available. By dint of the current problems in the banking system, that is no longer the case. Demand is falling (as can be seen in the last CML figures showing a drop by 7% for mortgage lending). Unless supply also falls, that will mean prices will fall.

As the banking system is highly unlikely to sort itself out in the next couple of years, where is the demand going to come from to maintain prices? What is likely to happen to supply as demand falls? Will more or fewer houses come on the market in the next year or two? Will sellers drop their prices to meet what buyers can afford or will they hold out?

If supply drops by more than demand then prices will continue to rise. My belief is that supply will rise for a while due to developers having projects that are nearing completion that are too far gone to stop and also due to reposessions as the economy falters leading to falls in prices.

If you think otherwise then that's fine, we all have opinions. Just look at supply and demand and then tell us all what you think is the most likely outcome from where we are now.

My belief as stated is that the fall in demand is too great for prices to be maintained.

The_Dangerman

I think you raise some very valid points Generali, and I think that lower demand and somewhat eased supply will stagnate prices, which is a real terms devaluation. But we still have the fact that more households are being created than houses, so demand is still there. This will support rents, and thus BTL.

ryandj

Marvellous but again you are talking about somewhere different than I. I should also point out that your brothers are both heavily reliant upon the housing boom. If they are intelligent, they will be moderately concerned when considering the events of recent months.

You are probably right there! Although the mortgage advisor gets a basic salary, he is still fairly reliant on commission. I should point out though that not all electricians are involved in building houses though. But yes reliant on an economic boom.

Generali

The_Dangerman wrote: »

I think you raise some very valid points Generali, and I think that lower demand and somewhat eased supply will stagnate prices, which is a real terms devaluation. But we still have the fact that more households are being created than houses, so demand is still there. This will support rents, and thus BTL.

My point is that there is neither more nor less to changes in prices than suplly and demand and if you can get your head around what drives them then you can have a decent stab at what is likely to happen to prices in the near future,

Demand isn't people that want something, it's people that want to buy something at the current price and also are able to.

Respectfully, I ask, "What do you mean by demand?" I think it's not the same thing that I mean. FWIW, I have a degree in economics and run the back office of a hedge fund so I hope that I have a grip on this!

Laughing_Man_2

meanmachine wrote: »

I follow an American-based forum quite avidly - more pop culture than moneysaving - and ALL the excuses they were making about why houses would never fall in value are being made here.

ALL of them.

Except they were making them 12 months ago, then had to stop making them when it all became apparent that the bubble was bursting.

It really is like going Back to the Past reading this thread.

And it's interesting - the only people desperately hoping are those who, quite absurdly, continue to claim that our market is in some way immune to the crash that's happening in the States.

I'm no mortgage expert, but I do know that our average wages are lower than in the States, we're taxed more, our house prices are far far higher, our homes are far smaller in sq footage and America views us as "the birthplace of the exotic home loan".

Any broker on here who claims that we've been somehow better behaved than the Yanks is seriously deluded.

Not surprising this got ignored, its alot easier to frame the bull argument within the limited scope of this island in the last decade. Anyone care to address the points made here?

The_Dangerman

Generali wrote: »

My point is that there is neither more nor less to changes in prices than suplly and demand and if you can get your head around what drives them then you can have a decent stab at what is likely to happen to prices in the near future,

Demand isn't people that want something, it's people that want to buy something at the current price and also are able to.

Respectfully, I ask, "What do you mean by demand?" I think it's not the same thing that I mean. FWIW, I have a degree in economics and run the back office of a hedge fund so I hope that I have a grip on this!

Well, people HAVE to live somewhere, that is not optional, there are no substitutes to it. If the price of milk goes through the roof you can switch to toast, or soya. But there is no option but to live in a house. So if we continue along increased immigration, increased divorce, and increased life expentancy, the demand for residential accomodation can't ease.

Therefore if people can't get a mortgage they will rent. More renters will sustain rents and will sustain interest for BTL investors.

The situation will not ease, more people are chasing homes year on year. Unless or until the number of households drops below the number of houses then demand will still be there. Of course as affordability deminishes then people will club together, stay at parents etc, so that will reduce demand. But I still believe, and last time I read the BTL magazine (obviously not without a vested interest) more households were being created.

I only did Econmics to A-Level standard, so I'm afriad I can't compete on that score. But I also respectfully venture that "experts" who I'm sure have all the same qualifications as your goodself have been predicting trouble in the housing market for years, and so far they have all been wrong.