All This Talk Of Hitting The Bottom Is Bonkers...

[TheCountOfNowhere]

Stand back, take a look at house prices, they are just mentally high.

We are no where near the bottom.

The only way these prices can be at the bottom is hyper-inflation takes off and makes all rich men.

Ignore the VI spin, these prices are unbsustainable.

P.S> Bloke at work, massive debt, managed to find a buyer for his house, at stupid money, he was meant to exchange on Friday...he didnt and is getting very worried. If they dont buy he's bankrupt.

[uptherebels]

Stand back, take a look at house prices, they are just mentally high.

If you cut them in half from what they are now, they would still be mentally high.

[Potwalloper]

If you cut them in half from what they are now, they would still be mentally high.

No, sorry, that's too obvious for me. Can we please throw beer over our mates and quote the Daily Express instead? That's what an ordinary working Sibley would do.

[Goat]

Stand back, take a look at house prices, they are just mentally high.

We are no where near the bottom.

The only way these prices can be at the bottom is hyper-inflation takes off and makes all rich men.

Ignore the VI spin, these prices are unbsustainable.

Thank god, I thought everyone had suddenly gone bonkers!

Come on bears, put your thinking caps back on. We've had a mini spring bounce on the back of ultra low transaction numbers and all of a sudden people start to think houses are sensibly priced and we're at the bottom. Think again:

1. Rental yields still very low.

2. Average price to average earnings ratio still very high.

And think about all of the wonderfull economic news to come:

1. Interest rates going up (possibly big time to combat inflation)

2. Unemployment going up (3m+)

3. Taxes going up big time.

4. Public spending coming down big time.

5. Bank lending to be very tightly rationed to preserve capital.

None of these are good news for house prices.

We've all been in this game long enough to know how the media works.

DON'T FALL FOR THE VI BULLS***

[Guest Steve Cook]

Stand back, take a look at house prices, they are just mentally high.

We are no where near the bottom.

The only way these prices can be at the bottom is hyper-inflation takes off and makes all rich men.

Ignore the VI spin, these prices are unbsustainable.

P.S> Bloke at work, massive debt, managed to find a buyer for his house, at stupid money, he was meant to exchange on Friday...he didnt and is getting very worried. If they dont buy he's bankrupt.

yes

There is a very low transaction rate.

Within the narrow confines of the above, there are some signs of a slowdown or even slight up-tick in selling prices. This is presumably based on a a very few brave/foolhardy buyers

This will have the effect of encouraging those people who have been hanging on by their fingernails to jump ship and try to sell in what they perceive to be a stabilising market.

This will cause a sudden upturn in supply. However, for the majority of potential buyers out there, the fundamental reality has not changed. Prices are still too high, cheap credit is still not widely available and many people are at significant risk of losing their jobs. For all of these reasons, the sudden increase in supply will not be met by a commensurate demand.

This will cause a resumed downward pressure on prices such that, at best, the "recovery" in prices will stall.

My own view is that unemployment is going to continue to rise regardless of any other factors. It is very likely that lender's interest rates will start to rise irrespective of what the BoE does with base rates. On the basis of these two factors alone, the downwards movement of prices will resume sometime later this year.

Edited June 1, 2009 by Steve Cook

[andykn]

Thank god, I thought everyone had suddenly gone bonkers!

Come on bears, put your thinking caps back on. We've had a mini spring bounce on the back of ultra low transaction numbers and all of a sudden people start to think houses are sensibly priced and we're at the bottom. Think again:

1. Rental yields still very low.

The recent "is it cheaper to buy or rent" thread showed that gross rental yields at todays prices are around 4%. And, over the long term, that's index linked income with capital protected. If you have 200 grand to invest where else will you get that.

     2. Average price to average earnings ratio still very high.

But we have over 90% employment and only 70% home ownership. So the person living in the average home is earning the average wage for the top 3/4 of the population.

 

And think about all of the wonderfull economic news to come:

1. Interest rates going up (possibly big time to combat inflation)

2. Unemployment going up (3m+)

3. Taxes going up big time.

4. Public spending coming down big time.

5. Bank lending to be very tightly rationed to preserve capital.

None of these are good news for house prices.

Except for inflation, the most likely of the things to come.

[Bubble&Squeak]

Thank god, I thought everyone had suddenly gone bonkers!

Come on bears, put your thinking caps back on. We've had a mini spring bounce on the back of ultra low transaction numbers and all of a sudden people start to think houses are sensibly priced and we're at the bottom. Think again:

1. Rental yields still very low.

2. Average price to average earnings ratio still very high.

[sNIP]

DON'T FALL FOR THE VI BULLS***

+1

And it is still cheaper to rent in London, in fact in my area my rent wouldn't cover the interest on a typical fixed rate

bonkers!

[ʎqɐqɹǝʞɐɥs]

Thank god, I thought everyone had suddenly gone bonkers!

Come on bears, put your thinking caps back on. We've had a mini spring bounce on the back of ultra low transaction numbers and all of a sudden people start to think houses are sensibly priced and we're at the bottom. Think again:

1. Rental yields still very low.

2. Average price to average earnings ratio still very high.

And think about all of the wonderfull economic news to come:

1. Interest rates going up (possibly big time to combat inflation)

2. Unemployment going up (3m+)

3. Taxes going up big time.

4. Public spending coming down big time.

5. Bank lending to be very tightly rationed to preserve capital.

None of these are good news for house prices.

We've all been in this game long enough to know how the media works.

DON'T FALL FOR THE VI BULLS***

Keep the faith bears. As someone pointed out yesterday during the last crash houseprices had a mini-boom each spring throughout the crash. Don't fall for the debtladen troll-bulls.

[Guest_FaFa!_*]

I don't understand this. Before I joined I lurked here for years. Now the crash is happening and prices are clearly falling (Land Registry people, Land Registry!), there's one, two upticks on the VI measures (which is what Nationwide is) and some appear if not panicking then clearly worried. Why? Is it because house prices defied all known logic for so long now gravity has taken hold we cannot quite believe it? Is it because we all wanted/expected it to happen for so long (particularly priced out 1st time buyers and those who STR'd a little early) we cannot quite believe it now it is? Patience is required. We all know house prices will not bottom until next year earliest.

Keep Calm and Carry On

Edit for spelling

Edited June 1, 2009 by shylock

[babesagainstmachines]

The recent "is it cheaper to buy or rent" thread showed that gross rental yields at todays prices are around 4%. And, over the long term, that's index linked income with capital protected. If you have 200 grand to invest where else will you get that.

But we have over 90% employment and only 70% home ownership. So the person living in the average home is earning the average wage for the top 3/4 of the population.

Except for inflation, the most likely of the things to come.

no wait....

[Namaste]

The recent "is it cheaper to buy or rent" thread showed that gross rental yields at todays prices are around 4%. And, over the long term, that's index linked income with capital protected. If you have 200 grand to invest where else will you get that.

But we have over 90% employment and only 70% home ownership. So the person living in the average home is earning the average wage for the top 3/4 of the population.

Except for inflation, the most likely of the things to come.

Recovery = High inflation = high interest rates. House prices tank.

No recovery = further economic deterioration = more job losses. House prices tank.

[Arnold J Renter]

The recent "is it cheaper to buy or rent" thread showed that gross rental yields at todays prices are around 4%. And, over the long term, that's index linked income with capital protected. If you have 200 grand to invest where else will you get that.

Except the income is not index linked and the capital is not protected.

It's quite easy to get 4%+ with fixed rate bonds, with the capital protected by govt guarantee.

[dylanthecat]

After being on this site for a month or two and reading every post ive decided to become a Bear.

Its obviously going to plummet even i realise that

[Executive Sadman]

If we had reached bottom, what we're witnessing is the beginning of a New world order, where houses are not bought by those who live in them, but by institutional investors kept afloat by counterfeit money, most of whom are responsible for the havoc wrecked on us. Waiting for interest rates to rise so they can enslave theyre tenants.

Thats the only possible scenario, there is no logical basis for a return to a healthy FTB supported market.

[Bubble&Squeak]

no wait....

and let me add

but in the interests of proper debate:

The recent "is it cheaper to buy or rent" thread showed that gross rental yields at todays prices are around 4%. And, over the long term, that's index linked income with capital protected. If you have 200 grand to invest where else will you get that.

Ok, so I buy my 2 bed (very nice) flat for 20% off peak which would be about 210k

I get my hard saved 10% deposit of 21K (FFS) which leaves me requiring a mortgage of 189K (FFS x10)

I get a 5% fix rate repayment mortgage (HSBC are offering 4.99, 90% LTV 2 year fix) which means I am paying £1117.50 per month (£217.50 more for the same flat in total) but as we share my rent is actually 700pcm which comes in at 87.50 less than the interest component (£787.50).

Oh and then you've got the £1500 booking fee, legal fees, maintenance etc etc

There is a very very long way to go yet and anyone that can't see that is BONKERS

Mortage payment calculator

HSBC FTB

Edited June 1, 2009 by Bubble&Squeak

[RufflesTheGuineaPig]

What part of Bull Trap don't people get?

WE WERE ALL EXPECTING THIS!!!!

[RufflesTheGuineaPig]

What part of Bull Trap don't people get?

WE WERE ALL EXPECTING THIS!!!!

[Harry Monk]

, two upticks on the VI measures (which is what Nationwide is)

What vested interest would a mutual have in HPI?

[munimula]

I don't understand this. Before I joined I lurked here for years. Now the crash is happening and prices are clearly falling (Land Registry people, Land Registry!), there's one, two upticks on the VI measures (which is what Nationwide is) and some appear if not panicking then clearly worried. Why? Is it because house prices defied all known logic for so long now gravity has taken hold we cannot quite believe it? Is it because we all wanted/expected it to happen for so long (particularly priced out 1st time buyers and those who STR'd a little early) we cannot quite believe it now it is? Patience is required. We all know house prices will not bottom until next year earliest.

Keep Calm and Carry On

Edit for spelling

It's why this site has become boring, I rarely visit now as there is no discussion in my mind about the direction of house prices and won't be for some time. My plans are all in place to start looking to buy from spring 2011 but I don't even expect that to be the bottom but we will be buying a 4-bed detached house for the longterm. With a 25% deposit and I would expect to have saved over £100k from peak prices by then.

The hysteria over such weak 'positive' news like Nationwide figures is pathetic.

Edited June 1, 2009 by munimula

[Guest_FaFa!_*]

What vested interest would a mutual have in HPI?

Umm.....yeah, sorry you are right! Didn't think that one through properly. Anyway, my point was a couple of upticks doesn't mean the insanity is back on, and I feel the Land Registry remains the most clearly neutral indicator

[Jim B.]

It's why this site has become boring, I rarely visit now as there is no discussion in my mind about the direction of house prices and won't be for some time. My plans are all in place to start looking to buy from spring 2011 but I don't even expect that to be the bottom but we will be buying a 4-bed detached house for the longterm. With a 25% deposit and I would expect to have saved over £100k from peak prices by then.

The hysteria over such weak 'positive' news like Nationwide figures is pathetic.

Yep. I feel the same in a way. We are in that period now to just kick back and wait. We had the global meltdown that was very exciting, then the huge falls and realisation the crash was on. There is very little to debate now. Two or three years of a downward trend. It's a bit like sitting in your garden watching a flower grow.

The only reason to come on here is just to point out to maybe impressionable new members that trolls like McTwatish, Sibley, Andykn, Rinoa and LondonToManchester are talking crap.

[andykn]

Except the income is not index linked and the capital is not protected.

It's quite easy to get 4%+ with fixed rate bonds, with the capital protected by govt guarantee.

Eh? Over the long term of course rents rise with inflation. Rents are 11% of (CPI) inflation. And the same with capital. If you are talking about Gilts, S&P have just downgraded their outlook and the 4% will not rise over the life of the bond - unlike rents.

[munimula]

It's a bit like sitting in your garden watching a flower grow.

Recently I have spent more time watering my sunflowers than I have on this site. Couldn't have said that a couple of years ago

I notice the forum numbers are generally down on the heights of autumn/winter 08/09 excitement

Really for the bear it's a nice place to be right now. Happy and content that we are firmly in a downward trend that is going to last for a few years. I don't know why people want to keep getting themselves all excited over volatile month-month figures....especially as posted many times on this site - that there would be small upturns in an otherwise downward cycle.

[andykn]

Ok, so I buy my 2 bed (very nice) flat for 20% off peak which would be about 210k

I get my hard saved 10% deposit of 21K (FFS) which leaves me requiring a mortgage of 189K (FFS x10)

I get a 5% fix rate repayment mortgage (HSBC are offering 4.99, 90% LTV 2 year fix) which means I am paying £1117.50 per month (£217.50 more for the same flat in total) but as we share my rent is actually 700pcm which comes in at 87.50 less than the interest component (£787.50).

Oh and then you've got the £1500 booking fee, legal fees, maintenance etc etc

There is a very very long way to go yet and anyone that can't see that is BONKERS

Mortage payment calculator

HSBC FTB

Sorry, so what rent do you and your sharer (s) pay on the flat? What gross (indexed) yield would that be for me if I bought it for 210k.

Wouldn't your sharer offset some of the mortgage cost?

[shaman]

One minute they're up, one minute they're down.

I don't know which way to turn really, but it seems I have no real decision to make about buying anyway, as there is practically nothing on the market.

All the decent properties are down as Under Offer, there are a lot which probably should have been removed from Right Move quite a while ago and there is nothing new appearing.

This is houses in Forest Hill btw.

Until property becomes available, I can't see how the market is going to improve.

So I will just continue to wait.

Stopped even viewing now, as I think it sends out the wrong signals to agents and home owners, which encourages them to keep kidding themselves.

If I'm ever feeling unsteady, I log into here for moral support.