There will not be a crash

ryandj

You would think in a crash the world ends or something ..... but we have had crashes and then recovered from them, lets hope this happens again.

Paul_N_4

The_Dangerman wrote: »

I feel you are getting a little bit bogged down in the minutia of what I said.

A 3.5% is a reasonble RISE because it is not stagnation. Ergo most people are getting reasonable RISES.

I'm picking holes in your flawed thinking because you make such sweeping statements. Stagnation (a 0% pay rise I assume you mean) would simply be a bigger pay cut than having a below inflation pay rise. A below inflation pay rise of 3.5% does not mean people are better off, the average person in this country is worse of than a year ago.

I think the vast majority of people can afford some luxuries in life, really, we are a wealthy nation. Everyone I come in contact with even on the minimum wage say they enjoy a couple of weeks in the sun. The vast majority therefore will have SOME fat to cut out of their budget.

Again, "you think". Well, I think MOST people in this country can't afford some of the luxuries in life you speak of. So that nullifies your argument. Anyway, there's a reason we've become the most indebted country in the western world, have the largest amount of debt per head than any other country, and for the national debt to be way over £1,000,000,000. Credit pays for many things.

Besides, my point is that that rent is the very last thing one would decide not to pay. If you stuggle to pay the gas bill, put a jumper on. Having somewhere to live comes second to food and drink, surely.

I think you'll find those people that struggle to pay the rent probably already wear a jumper in winter to cut down on their heating costs. And your comment about chosing to starve yourself before deciding to pay the rent is just stupid and quite insulting to the thousands of pensioners that already choose to either eat, or stay warm over the winter because they can't afford the cost of living in this country.

If people can't afford to pay rent, the rent falls to what MOST people can afford. Otherwise your flats remain empty. Try increasing the rent on your BTLs by 50% and see what happens. This is your market. Rent probably is one of the last things you'd not want to pay, the same as your mortgage, but the fact is that a percentage of people in the coming months/years are not going to be able to do this. This percentage is what will govern the percentage change on the price of houses, rents, and many other goods and services that hope to stay in business.

teabelly

Why do we have a different attitude to property compared to other goods? If I can't afford an Aston Martin as a first time car buyer I wouldn't go and moan and say "I can't afford one of your cars, therefore you should drop the price". Why do FTBs think the property market as a whole should collapse for their benefit?

The repos are already occurring but they are from the interest rate hikes of 2006. The other repos won't be seen for another 12 months or so. Banks still aren't selling repos for bargain prices therefore the driver for price substantial falls doesn't exist. The usual 5k off if the place isn't selling is meaningless as an indicator. What matters is whether sold prices now are substantially lower than sold prices from 6 months ago or whatever time frame you use.

If the most recent data is showing sold prices haven't fallen then there isn't a crash. If the data has shown a slackening of prices then them picking back up again then there isn't a crash going on. If this continues to remain to be true for the next 6-12 months there definitely isn't a crash and there probably won't be for several generations if old people carry on living longer. A good bout of flu amongst the septegenarians and octogenarians wiping half of them out is about the only way it is going to happen.

If sellers don't have to sell then they will wait for the price they want as they know the person they are buying from will be doing the same.

strongboes

Dangerman you are an idiot, I am sorry to say, and i'm afraid that you don't really know what you are talking about. I have read many of your posts so don't think that this is a flippant observation.

House prices are falling right now mate, it doesn't matter where you are in the country, they are falling. There are a few reasons for this which have been clearly pointed out on this board.

Here is one further piece of info for you. My uncle has 50k in a 3 month notice account with the Halifax, don't ask me why. He wants to take it out, they wont let him, he has already been waiting a month, now he will have to wait a further 3. I am led to believe that with notice accounts you can usually withdraw funds at any time you just forfeit the interest. The bank manager actually told him that this is the first time in his whole career that this has happened, he has never heard of it before.

Go figure

smigger1979

teabelly wrote: »

Why do we have a different attitude to property compared to other goods? If I can't afford an Aston Martin as a first time car buyer I wouldn't go and moan and say "I can't afford one of your cars, therefore you should drop the price". Why do FTBs think the property market as a whole should collapse for their benefit?

The repos are already occurring but they are from the interest rate hikes of 2006. The other repos won't be seen for another 12 months or so. Banks still aren't selling repos for bargain prices therefore the driver for price substantial falls doesn't exist. The usual 5k off if the place isn't selling is meaningless as an indicator. What matters is whether sold prices now are substantially lower than sold prices from 6 months ago or whatever time frame you use.

If the most recent data is showing sold prices haven't fallen then there isn't a crash. If the data has shown a slackening of prices then them picking back up again then there isn't a crash going on. If this continues to remain to be true for the next 6-12 months there definitely isn't a crash and there probably won't be for several generations if old people carry on living longer. A good bout of flu amongst the septegenarians and octogenarians wiping half of them out is about the only way it is going to happen.

If sellers don't have to sell then they will wait for the price they want as they know the person they are buying from will be doing the same.

No, that would be the equivalent of a first time house buyer wanting a price drop on a country mansion so they could afford it.

The_Dangerman

strongboes wrote: »

Dangerman you are an idiot, I am sorry to say, and i'm afraid that you don't really know what you are talking about. I have read many of your posts so don't think that this is a flippant observation.

House prices are falling right now mate, it doesn't matter where you are in the country, they are falling. There are a few reasons for this which have been clearly pointed out on this board.

Here is one further piece of info for you. My uncle has 50k in a 3 month notice account with the Halifax, don't ask me why. He wants to take it out, they wont let him, he has already been waiting a month, now he will have to wait a further 3. I am led to believe that with notice accounts you can usually withdraw funds at any time you just forfeit the interest. The bank manager actually told him that this is the first time in his whole career that this has happened, he has never heard of it before.

Go figure

Please, don't be sorry. You are entitled to your opinions about me as other are! Although I do ask politely that you don't call me "mate" in the same post you call me an "idiot". if prices really are falling then I will welcome that to give me chance to increase the yield on future BLT investments.

And your point is for the second paragraph?

motch

Addy1 wrote: »

I am sorry, but could you explain this, I am not sure I get the significance? (not being sarcastic, I genuinely don't understand).

the banks are desperate to keep their cash due to the credit crunch and desperately trying to keep solvent, biggest banking crisis for many many a year coming our way....

The_Dangerman

Paul_N wrote: »

I'm picking holes in your flawed thinking because you make such sweeping statements. Stagnation (a 0% pay rise I assume you mean) would simply be a bigger pay cut than having a below inflation pay rise. A below inflation pay rise of 3.5% does not mean people are better off, the average person in this country is worse of than a year ago.



Again, "you think". Well, I think MOST people in this country can't afford some of the luxuries in life you speak of. So that nullifies your argument. Anyway, there's a reason we've become the most indebted country in the western world, have the largest amount of debt per head than any other country, and for the national debt to be way over £1,000,000,000. Credit pays for many things.



I think you'll find those people that struggle to pay the rent probably already wear a jumper in winter to cut down on their heating costs. And your comment about chosing to starve yourself before deciding to pay the rent is just stupid and quite insulting to the thousands of pensioners that already choose to either eat, or stay warm over the winter because they can't afford the cost of living in this country.

If people can't afford to pay rent, the rent falls to what MOST people can afford. Otherwise your flats remain empty. Try increasing the rent on your BTLs by 50% and see what happens. This is your market. Rent probably is one of the last things you'd not want to pay, the same as your mortgage, but the fact is that a percentage of people in the coming months/years are not going to be able to do this. This percentage is what will govern the percentage change on the price of houses, rents, and many other goods and services that hope to stay in business.

First of all I think you misunderstood, I said rent comes second to food, but my poor explanation probably caused that, so I apologise to that. Food, shelter, warmth, in that order, are we agreed?

Second, where did I say I owned "flats"? So we can both make wrong assumptions

Third, you're really suggesting "most" people can't afford ANY luxuries whatsoever? No nights out, no holidays, no tvs, NOTHING? I respectfully disagree.

Fouthly. Whilst a 3.5% rise is not keeping up with inflation, it will cover rises in essential goods. Rent, food, heating. But to make up the shortfall "unnecessary" expenditure will be cut. Perhaps "unnecessary" expenditure is a better phrase to use? Luxury can mean different things to different people. My luxuries would be different to someone elses, for example.

Its interesting to know what products are vulnrable to an economic slowdown. It was interesting to hear(though I have no proof) that women spend exactly as much money on make-up during a recession as they do in growth periods! That has no relevance to what we are talking about but I found in interesting.

strongboes

The_Dangerman wrote: »

And your point is for the second paragraph?

If you cant understand the significance of this, then this is probably part of the reason why you are struggling to grasp the situation unfolding before all of our eyes in the housing market.

snarffie

strongboes wrote: »

Dangerman you are an idiot, I am sorry to say, and i'm afraid that you don't really know what you are talking about. I have read many of your posts so don't think that this is a flippant observation.

House prices are falling right now mate, it doesn't matter where you are in the country, they are falling. There are a few reasons for this which have been clearly pointed out on this board.

Here is one further piece of info for you. My uncle has 50k in a 3 month notice account with the Halifax, don't ask me why. He wants to take it out, they wont let him, he has already been waiting a month, now he will have to wait a further 3. I am led to believe that with notice accounts you can usually withdraw funds at any time you just forfeit the interest. The bank manager actually told him that this is the first time in his whole career that this has happened, he has never heard of it before.

Go figure

Regarding your second paragraph, would you like to explain your point in the context of this thread? I can't see any point.

I must be an idiot too...:rolleyes: