Downvaluing......

[Marina]

My point is that we have come on five years and the rates are lower and the wages are higher. Its even stevens in my book and a crash to me is not on the cards just yet. If prices this summer did rise 10% then I think that for sure we would be looking at a bubble burst scenario. Today we are at the pinnacle however I think without a shove in the form of higher rates we will be just perched on the edge.

<{POST_SNAPBACK}>

Rates are lower? they have gone up 35% in the last what 8 months and a lot of people have taken on debt in the last 5 years.

Wages are higher? Don't know where you get this from. Don't know where the statistics come from either. My observation is that, GENERALLY, we are in a no wage inflation environment.

Perched on the edge? Where I live in the South East we are definitely over the edge and starting to fall - quite significantly for higher priced properties. One up the road from me on the market for 9 months at £560k has just sold - found out from a neighbour who is a friend of mine - they accepted £485k from someone who has not even sold their property yet. So, no offer at all really. They have had four viewings in nine months. The price of £560k was based on the fact that a similar (i.e. identical - its a cul-de-sac of about 12 properties) had sold for £575k (big posh conservatory on that one) 6 months earlier. So they are willing to take 90k less than a similar one sold for 15 months ago. Looks like at least a slide if not the start of crash to me.

[Guest pioneer31]

House Prices have risen, however the real cost of ownership has gone down as interest rates are much lower.

The real cost of ownership hasn't gone down otherwise we'd still have people clambering to get on the ladder as we speak.

There's something wrong with your calculator

the question is how much does it cost each month to buy

too much for a FTB that's why there are none.

and can I afford it

see above

and with low long term fixed rates there is certainly no crash on the horizon.

<{POST_SNAPBACK}>

Firstly, anyone with a smidgen of Economic knowledge will tell you that interest falls will not necessarily prevent a crash.

Secondly, what makes you think we are going to have long term low interest rates anyway? They haven't been constantly low for the last 25 years?

[Guest pioneer31]

As for FTB'ers how old are they going to be when they get onto the ladder. Today we here the average age is 35 years old, can they really wait till they are 50 to get onto the ladder.

<{POST_SNAPBACK}>

Have they really any choice if the're priced out?

[Guest pioneer31]

That must of been some hellish kind of basket case.

Was it on the seafront on the isle of wight on the cliff edge or something.

I cannot imagine any property priced in 1990 being worth less in 2000.

I purchased a property in 1995 for rental purposes and made 100% when sold in 1998 today if I had kept it I would have made 250% today.

How much did you pay in 1990 and how much did you sell if for in 2000?.

<{POST_SNAPBACK}>

hello?

wakey wakey?

1995 was the bottom of the last crash, so of course you would have made a profit in 1998.

1990 was only a year after the top of the last boom

[Uriah Heap]

I don't think my experience of the property slump was particularly unusual - except that I had to move because I got made redundant so it hit me very directly. The point I was making was that it IS possible to lose money on property. I know because I have.

[batman]

Who would bid for a house based on a photo on e-bay & some associated blurb ?

[oracle]

making a point here laure,

we DON'T all know property will be higher in 10 years time than it is now.

property needs occupants to be viable.and an average of 1.7 kids per couple means our population will decline in a few years time(once the baby-boomers pop their clogs)

thus supply will outstip demand...and then....

why do you think the government want to:take in any immigrant they can find

make us all work until we're 70!..

yes its a while away and they still have some years of pension drawing to do(which is what the governent are worried about in approx 7-10 years)...but I'm sure if you look hard enough you will find some data on population levels after wars(ww1+2)/pandemics(flu post ww1),and average life expectancy(which funnily enough peaked a while back and is getting shorter because we're all getting too fat from living it up!)

your view is too simplistic,you need to look at the big picture.

[STR@2%GY]

laurejon

Just so you know the facts about the length of the cycles in property prices, look at the Nationwide series in real terms - the only meaningful way to look at it.

Looking at the 3 previous cycle peaks:

Peak Value Date when peak value regained

Mar 74 £72,985 Sep 86

Mar 80 £60,900 Sep 85

Sep 89 £102,256 Mar 02

[europbaron]

In my London suburb street, it turns out that profits aren't that pretty.

238500 -> 249000 over the course of a year.  That's 10K 'profit', excluding all costs and taxes.  Even without costs that works out to just about 4.2%.  Even if they were buying cash only to minimize costs that's still a crap return.

<{POST_SNAPBACK}>

And let's look at low costs for a cash buyer willing to risk no survey:

Stamp duty : £2,385

Solicitor to buy and to sell : £1000

Estate agent (0.75% - 2%) : £1800 - 4980

Removal costs both ways : £500

So that's £5685 to £8865 costs making the profit somewhere in the region of £1635 to £4815 or 0.7% to 2% return!

[oracle]

"we DON'T all know property will be higher in 10 years time than it is now"

Some, like me,

think prices could be LOWER, if we see deflation

<{POST_SNAPBACK}>

Well said Dr. I for one am in the camp of lower prices,deflation is a distinct possibility once the baby boomers retire and are net takers from the system.we have got used to lots of free flowing capital for 50 years but avery large global bear market in a number of asset classes could be on the cards in ten years or so.....for the medium term though I do like the look of energy and commodities.