Monday, Dec 17, 2007
3.65% fall in asking prices, 6.8% in London....WOW!
Firstrung: UK house prices crash by £7,500 as London house prices crash by £28,000 in December
UK house prices plunged in December, due to higher borrowing costs and greater financial uncertainty, the latest survey from Rightmove has revealed. The survey showed that asking prices for houses were 3.2 pct lower in December than in November, this is RM's biggest recorded fall since the data series began in January 2002 and a much sharper fall than last month's 0.7 pct decrease. Rightmove believes that the drop was accelerated by the winter seasonal slowdown, combined with first-time sellers trynig to avoid the home information packs (HIPs) legislation, which in RM's opinion, accounted for about 1.1 pct of the monthly fall.
Posted by converted lurker @ 01:17 AM (2106 views) Add Comment
59 Comments
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1. planning4acrash said...
The acceleration of the fall appears exponential. Looks like 12 months will be enough to decimate vast swathes of the housing market. Way to go!
2. hpwatcher said...
It's quite clear that a substantial shakeout is now required...and seems to be happening. God knows where it will end, but I can see a real danger in house prices falling too quickly.
3. little professor said...
Oh, pwned!!! That's a chunky drop, much more than I'd been expecting.
4. voiceofreason said...
Looks like underlying is an impressive 1% fall. Taking into account HIPs and time of year.
".... the problem is the property market’s increased dependence on mortgage funding ....."
But ... supply/demand, immigration, demographics ???
We need to start work on a set of guidelines for the future shape of the housing market for the UK.
How to regulate lenders to avoid future bubbles in property. Encapsulate in law a framework that stops property becoming an investment asset. Maybe "one property per family" law or something like that ... ?
We must ensure that we as a nation are never held to ransom again.
We need some kind of reform that removes the financial industry's ability to manipulate us.
We need an independent inflation statistics body. etc etc
5. hpwatcher said...
I just don't understand how HIPS could be responsible for this drop....I mean, who would knock £10,000 off the asking price to just save £300?
Seems to me the market is falling, rather than anything to do with HIPS. Moreover, if the government wanted to be really helpful, rather than introduce something like HIPS, why not just reduce the stamp threshold....
6. The Baldman said...
The VI's just can not accept the party is over. Its all due to HIPS and people wanting to sell by pricing below market!! (What is market? is this the notional figure made up by an estate agent? So whne more people increase supply after Christmas surely the prices will be lower?
Miles Shipside, commercial director of Rightmove, said that the introduction of HIPs had distorted the latest figures:
"Many sellers who have listed this month have priced below the market to try to sell. It is wrong, however, to speculate that prices will continue to fall based on one month's statistics from a quiet December.
"New listings are very low at this time of year so the artificial wave of low-end sellers has really distorted the average prices of new properties coming on to the market."
7. converted lurker said...
HIPS aren't responsible for this drop, there's simply nothing left to blame. In some respect Miles is an estate agent, they blame: the weather, time of year, time of month, the world cup ...anything except....er... prices are insane. Take a look at the graph on the front page of HPC and you'll see just how prices have overshot normality. It's all about affordability, nothing else is relevant to such a fundemental resource such as property, once speculation is witthdrawn. Prices will correct back to their long term affordable trend and measure giving an approx. 2.5% return, that looks increasingly like a 30% corection, a 300K house will be 200K, for FTBs the price will be 100K as opposed to 150K....
8. James said...
Awesome! That really is a substantial drop in a month. Given it's asking prices being counted, this is as much about the perception of sellers as much as anything. Smell the fear?
9. hpwatcher said...
Thanks converted lurker.
A drop of 30% is music to my ears; BUT, I agree it's looking increasingly likely....
10. it_is_going_with_a_bang said...
Miles Shipside, commercial director of Rightmove, said that the introduction of HIPs had distorted the latest figures:
"Many sellers who have listed this month have priced below the market to try to sell. It is wrong, however, to speculate that prices will continue to fall based on one month's statistics from a quiet December."
Correct me if i'm wrong but is that not what everyone does when prices are going down???? Sell abit cheaper to sell what they have so it will sell. Thats the cycle!
Nice to see HIPS just thrown into the pot again. Because of course when you are selling a £1.5 million pad in Chelsea paying for a HIPS is such a life altering decision.....
Take not that the commercial director thinks it wrong to speculate on property prices.... cheeky sh*t!!!
I've always thought that once a downturn starts the Buyers will be looking for at least 5% off as a norm and not 0.8%. Add to that the Sellers being more realistic in the first place and there you have it ... a crash.
11. voiceofreason said...
I was looking at the Monthly Change graph on page 4.
The figures get very noisy after August. -2.6%, +2.7%, -0.7%, -3.2%.
That is why I don't trust the -3.2%. If it is like Aug/Sep figures, then who is to say Jan wont be +3.3% ... ?
Don't get me wrong, I want to see a -30% correction as much as everyone else on hpc.
But I am trying to analyse why the figures are so noisy.
Maybe September's +2.7% was an anomaly, but why ?
12. Cheekie Charlie said...
Converted lurker, The 30% drop is reasonable, but this is presuming the economy remains stable. I think it will overshoot by upto 50% before returning to that long term average.
13. techieman said...
A few points (stuggling to think though with the noise of Kirsty munching):
1. Expect to see explanations of how these figures are an abberation. (to some extent this is true if everyone was selling the same house then the comparisons would be meaningfull but since they're not they aint). However clearly the trend is down but a fall of 6.8% in one month at this time of the cycle is just silly. As HappyRentz pointed out its unfortuneate we dont track the median regional and uk price.
2. HIPs are the excuse fed to the masses, to explain why things are bad, so they can say aha thats ok then the market will bounce. For reasons discussed although there is an hassle impact the demand supply dynamic can be argued either way - and is invalid in both ways.
3. I love Ann's comment on the timesonline article about this (the link to that on this site didnt work here) so heres what she said:
"I don't think honesty of the monetary system is an issue - just common sense of buyers and sellers. And fools are easily frightened.
Check out the December 2005 report by Rightmove which again predicted a "stabilising" housing market after a decline....shortly followed by their February headline "Houses fly off the shelves!"
Things could be a lot worse for BTL LLs who can wait out the next few months - good properties will continue to command rising rental prices to offset the current mood. And first timers will have the opportunity to pick up a juicy bargain at the expense of the bailers.
I predict that once the HIP-beating stock is off the market and the next round of rate cuts kicks in (2 months time) then we'll see happy faces all over again - this time including a few more first time buyers who had the balls to buy at exactly the right time - just like I did in December 2005 :))))
Ann, London, England"
I am SO glad people like this exist!!!
14. it_is_going_with_a_bang said...
A total lack of confidence in the market now exists. That is what should keep it all in negative territory.
15. justwatching said...
Voice, it was a typo, + & - are next to each other on the keyboard.
Strangely no headline on BBC website yet, probably going to take a while to put a positive spin on this one.
Sky have managed "A Buyers market as house prices tumble" headline. Tee he, I'm off to look at a few houses.
What price on the BEEB not reporting this one at 6pm?
16. Mr_sensible said...
Voiceofreason, I agree: "We must ensure that we as a nation are never held to ransom again.". Seems to me there's an obvious way of doing this: link house prices to the official inflation rate. Of course this can only be done after the crash, once prices have dropped by 30-50% and are affordable again. Once that's happened, add house prices to CPI. After that, the BoE will act using interest rates to control house price inflation, houses will never again be seen as an investment, just a place to live. Interest rates will always be an effective way to control house prices for as long as the majority have to borrow money to buy a house. This will also stop the next batch of greedy seculators swooping in and driving prices up again after the next crash. Or am I being naive?
17. hpwatcher said...
''including a few more first time buyers who had the balls to buy at exactly the right time - just like I did in December 2005 :))))''
Ah, so you are a bull after all!
18. techieman said...
Moi hpwatcher? it was a quote!!!!
19. tyrellcorporation said...
Voice of reason... One household per family is too draconian in my opinion. All the apparatus exists to prevent the current situation. HPI should be included in the CPI and the tax benefit of having BTL properties should be stopped - HEY PRESTO, NO HOUSING BUBBLE!
20. hpwatcher said...
Apologies techieman. I thought it a bit weird for folks on this site to be spouting that sort of stuff.
2008 is clearly going to be very, very different from 2004/2005.
justwatching said...''Tee he, I'm off to look at a few houses.''
Very, very unwise in my view....unless you can get 15-25% off.
21. uncle tom said...
What is happening is that the smaller properties that should be the domain of FTB's - but who can no longer afford them - are no longer being snapped by BTLers and so are building up as unsold stock.
Prices now have to correct for these properties until either the FTB's can afford them or the speculators are re-emboldened.
But as no-one likes to catch a falling knife, there is little prospect of FTB's mortgaging themselves to the hilt, or speculators coming back on board, until the market has clearly bottomed out, or has dropped to such an extreme that a rebound is a certainty.
Consider the consequences of falls of 10% - 20% - 30% - 40% etc...
In theory, the FTB's could come back in after a fall of about 30% - but as both lenders and borrowers will be running scared at that point, I can't see anything like enough activity returning at that level. At a 40% drop, the FTB's will be tempted, but will want to see the market stop falling first. At 50% the mortgage lenders will all be in deep crisis, and would be FTB's will be unable to get high LTV's or high income multiples.
At some point, cash rich speculators will enter the fray, but calling the bottom of the market too soon could prove a costly error..
My money is on prices falling - if only briefly - by more than 60%, and possibly more than 70%, before rebounding. However, the wider economic consequences of the crash means there is no guarantee that they will settle at much more than half their current level. We may well see the rebound of the market overshoot, only to slump back to stability.
22. the reaper said...
'My money is on prices falling - if only briefly - by more than 60%, and possibly more than 70%, before rebounding. However, the wider economic consequences of the crash means there is no guarantee that they will settle at much more than half their current level. We may well see the rebound of the market overshoot, only to slump back to stability.'
You sum it up succintly Uncle Tom.The reality of markets is that they always under and overshoot,and whilst fair value may be 30% below current levels(I don't think it is),prices will not stop there.It is important to remember that we will be entering a very lergae recession and this will again mitigate against anyone piling in.
23. voiceofreason said...
tyrel @15.
Sounds simple. HPI in CPI and no fewer tax benefits for BTL.
What is the best way to lobby for this ?
24. techieman said...
Accepted Hpwatcher- the point i make is that I am happy that these people exist because they will hold on (at least for a while - especially if they have an existing portfolio with equity). When they become distressed they may well head for the exits in a second wave, when the bounce uncle tom alludes to is shallow and then evaporates. That will then constitute the plunge with blood on the streets and the time to dip the toe in the water.
Incidentially I dont buy into this never again will assets be allowed to bubble. To accept that - for a variety of reasons - means the end to a free market. Infact it just wont work, I believe that this site may well serve as a discussion forum for that very topic, but bubbles will always exist in all sorts of asset market depending on where we are in the cycle. My belief is - by virtue of the collapse of the HP bubble anyway you wont get a bubble in res prop again for a long long time. (the example if the 1925/6 crash in Florida) VoRs points are admirable but by the time we would get to a stage where they would be of any use they would be abandoned. A bit like the Gold standard!!!
25. Urine Trouble said...
I will be buying with cash when I see a house I can afford outright, then, rise or fall who cares? All I want is a house that I can buy and aford to live in on about £15000.00 per year.
26. holding out said...
VoR
The last thing CPI needs to include AT THE MOMENT is HPI. Once prices have corrected then fair enough. RPI includes mortgage costs rather than HPI - that is why it has diverged of late as mortgage costs have risen due to increased IRs.
27. Pelethar said...
Where the hell are the mainstream press on this? These are explosive figures and yet the survey is barely getting a mention.
28. Letsalldance said...
tis the time to be jolly
29. it_is_going_with_a_bang said...
The rental market is still strong and I would assume won't really get any weaker. BTL doesnt make financial sense right now with prices as they are, but a 35%/40% reduction would put it into the right area for BTL to make financial sense. So I can't see anything more than a 40% drop overall. A bigger drop would be nice but the insentive to BTL will return before it does.
30. it_is_going_with_a_bang said...
It is on the BBC now...
Rather annoyingly it is ended with the phrase:
"House price inflation is expected to continue to slow next year as continuing credit and affordability restrictions dampen activity"
A very gently,gently, approach to reporting news they don't really want to.
When the annual rate goes into minus ( - ) figures will they stop using the phrase "slow inflation"!!
Maybe replace it with "deflation" .....
31. Planning4acrash said...
No doubt it will be called "negative growth". Why haven't we heard about positive deflation during the boom?! I don't mind oxymorons but these morons should at least be consistent.
32. geed said...
Can someone tell me the best index for Scottish house prices, Rightmove keep banging on about UK prices and omit Scotland and N.I.
Thanks
G
33. uncle tom said...
I'm expecting rents to increase over the next six months or so, then level off for a while as the crash unfolds.
However, it is very unwise to assume that rents will stay high indefinitely - when the dust finally settles, I expect them to provide a reasonable return relative to the post crash market value, but significantly lower than they are at present.
BTLers who attempt to ride out the crash look set for a bleak future of negative equity and growing income/interest deficits
34. little professor said...
"Worst hit was the affluent borough of Kensington and Chelsea, where house prices fell at around £20,000 a week. Since the average price is now £1,572,814, so it’s not as though borough residents will drop below the breadline, but there’ll still be a few people choking on their croissants and smoked salmon when they read the figures this morning. Even up-and-coming areas like Hackney saw big falls – though admittedly it’s still 41% up for the year as a whole."
35. handle_it said...
Sounds simple. HPI in CPI and fewer tax benefits for BTL.
What is the best way to lobby for this ?
I think you could lobby till you're blue in the face. Policy is made by the banks not government.
36. European-bear said...
I agree about the yield being acceptable after about a 40% correction. But by this time the mentality will be prices only ever go down and only cash buyers (who are a minority) will be able to invest. Most BTLs will still need a mortgage and with a depreciating asset they are not going to be easy to get.....so hence an overshoot
37. planning4acrash said...
Rents have to fall. They are stupidly high. Most people would be spending 25% of their income on rent in a 1-bed flat. Unsustainable.
38. Si said...
If I lived anywhere but a shared house right at this minute there would be precisely zero chance of me saving for a deposit.
I'm 30 and earn a fair wage as a senior engineer.
This sucks big time.
39. Colutd1 said...
the greeks , the romans, atilla the hun and genghis khan. We are told about the progress of mankind. Going forwards all the time. the greeks were nicer than genghis. the romans nicer than atilla. does this not prove from the greeks and romans that 500 years later the world had gone backwards not forwards. we do not always go forward. were i live norwich poor area average wage £15k so i m going for nearer 50 percent crash . look at 15k that makes my council 2 bed terrace £52.5 k not £145k this spring or even £130k now ore like 70k . i might be being optimistic with these figures because 145k to 52.5k is about 63percent crash. sod mr helicopter i done the english depression. my grandad walsall stopper 14th jan 1933 . he knew fear. he beat the living out alex the king james and caused the biggest upset in football history . walsall jan 33 very grim place. walsall 2 arsenal 0 . please take me on the coach back to london. £69 v £40,000 the only times the champs have been dumped in history by a bottom league side. my family survived the depression due to the sporting prowess . . my old boy is very middle class but i skipped. BEANS NOT BRICKS . COL U TILL I DIE SEE U SOON
40. Jonb said...
HIPS are partly to blame because lots of people put 1-2 bed properties on the market in advance of them being required. They tend to be cheaper than larger properties so this drags the average down. There was a jump in asking prices a few months back when the flood of 3 bed + properties came on the market.
We will need to wait for next month's figures to see what the underlying trend is but it is very definitely down.
Of course the jump in supply will in itself lead to a drop in prices on a like-for-like basis.
41. Jardov said...
You guys are deluded if you really believe in ridiculous figures like 30, 40 even 70%!!! Get real (and please dont quote individual examples). The planet HPC is very different from the real world, simply writing about it and getting all excited wont make it happen. BTW I am not a particularly interested party either way, I have a property with small mortgage, I just find it amusing how the world can be so polarised in thinking, one stupid lot believing that they are richer because of house price inflation and the other stupid lot believing that house prices will crash - I guess some of you have been saying that for sometime now, I remember a headline back in 2003 predicting the imminent crash - ho hum, hope not too many of you waited with baited breath for that one.
42. inbreda said...
"22. it_is_going_with_a_bang said...
The rental market is still strong and I would assume won't really get any weaker..."
Unless you use the old BTL logic. As prices come down people will be able to afford to buy and therefore will stop renting meaning BTLers will get stiffed both ways.
In the channel islands an odd thing has happened. There is genuine excess demand here and has been for years. The VI rubbish about immigrants and lack of space are actually very true here (as opposed to being nonsense in England), and house prices have been very high as a multiple of wages for decades. The interesting thing to note is that prices haven't been affected here as much as they have in England over the last 5 to 10 years. I think this is because in England, lower interest rates meant better affordability which meant the banks were willing to move from 3 times income to 6 times income. Over here low interest rates helped with affordability, but had no knock on effect because the banks were already lending 6 times income, so prices haven't risen as much despite the massive excess demand.
My point is that even if interest rates AND Libor rates come down, banks are still going to be cautious about sub-prime, self cert and high multiples. This will have a big effect on the margins of the market (where the prices are set). There is absolutely no escape from this.
43. uncle tom said...
Ah Jardov - you remind me of the late eighties - the scent of denial is so nostalgic..!
..I was right then, and put my money where my mouth was. I do very thorough calculations and I know I'll be right again.
Now, who needs to get real???
~~~
On the subject of rented property, I believe the whole concept of borrowing money to buy property that you then let - will become history - and a cautionary tale for future economics students. Borrowing to invest has always been a textbook no-no in banking - the insanity of the last decade will testify the reason why.
44. Jardov said...
Uncle tom - you may be right, but it's not that I'm in denial or anything, I cannot say that I have done any calculations but I just dont see the evidence for a crash and this forum isnt exactly objective is it. So give me a figure for the drop you see with an estimate at the timescale - I'd like to be convinced, because if I was I'd go short on the house price index and make a few bob!
45. techieman said...
Jardov - its people with your mentality that guarantee this will happen!!! Best you do some proper reading and a bit of finking.
I was a home owner in the 80s, sold out in 89 when EVERYONE thought i was mad, purchased again in 93 and sold again in 2005 just before the fall. So yes lost out for the final blip, but thats cool as far as im concerned. to be honest didnt expect this one to end with a contraction in the credit markets - was just expecting an end to the bubble without something to pin it on to.
So was a bull in the 80s a bull in the 90s a bear in 2005 and an uber bear now. And sadly (and really i find no joy in saying this) the falls will be at least 40%, lots of people will then be hurting. What happens after that is the key, i think you will find that most asset bubbles are deflated with Fib numbers, i'd look for 89% in the long term. If that happens prices will stabilise and will take around 30 years to get back to these levels. Thats the case of the 1925 crash in Florida and looks to be panning out in Japan. Its naive to think it cant happen here. You have been warned! http://www.stock-market-crash.net/florida.htm
46. Quiet Guy said...
@voiceofreason
"The figures get very noisy after August. -2.6%, +2.7%, -0.7%, -3.2%."
I suspect you are right. I'd love to see a huge crash now but expect a slow slump lasting years instead. There may be a "dead cat" just around the corner.
That said, the newspapers are good fun today!
47. Jonb said...
I think a drop of only 30% is pretty optimistic. House prices are currently 9x earnings, and the long term average is 3.5x. That means a drop of 61% is required just to get back to the long term average. Prices will almost certainly overshoot on the way down. They went down to 2.5x at the bottom of the last crash, which would be a 72% drop. It is going to be a much bigger fall this time, and banks seem to be much less willing to lend than they were last time round, so a drop of 80% or even 90% isn't completely out of the question.
48. Jardov said...
Uncle tom and techieman - I would have to bow to your superior knowledge of the markets as I only have what can be best described as a watching brief however I cannot see the evidence for a crash, yes I may be in denial but can you convince me otherwise? Unfortunately this forum seems to be teeming with people desparate for a crash, most of whom dont put any reasonable argument forward except that house prices are too high (so's the price of beer).
Assume I'm an intelligent being (lets park your statement about my mentality...) who has landed on earth and wants to know does he buy or does he go short on the house price index? what would you say, I'm genuinely interested, you seem to both have considered opinions without making thoughtless statements regarding a potential hpc which could financially cripple a lot of people.
49. Letsalldance said...
calm down everyone... it's only an asking price index!!
50. Quiet Guy said...
Jardov,
The fundamental problem with rising house prices is that it requires ever larger supplies of credit. The only reason that house prices have gone so high is that bankers were willing to relax normal lending rules and lend 5x, 6x, 7x ... (I'm ignoring super-rich foregin buyers in London who live on a different planet to me).
The only way to keep house prices rising is for banks to lend more. Have you noticed the state our banking system is in recently? When I first started looking at house prices, I considered things like immigrants, rising levels of single and divorced people and so on. If I'd been smarter I would have realised that money supply is far more important.
There is plenty of historical evidence that suggests that the recent boom is just part of a regular cycle. Remember that some people in their twenties and thirties have never known anything except rising house prices and rising consumption.
"this forum isnt exactly objective is it."
Yes, we're kinda bearish. We are the lunatic fringe who have howled and railed at the stupidity of a system that encourages so much debt and will ruin many peoples lives when the market turns.
51. techieman said...
Jardov - frankly the only thing you need to is take a look at some of the blogs on this site. I apologise for the "mentality" comment - as is so often the case you cannot interpret how written words are to be conveyed to people.
Really its actually not wishful thinking - i hoped, along with most people that prices would stabilise before the bubble got too pronounced. There was always people saying aww it will stop growing and incomes will catch up. The fact is the credit has been relaxed in biblical proportions, and with it a commensurate rise in consumption. Add to that the fact that (in the USA - not UK since i dont know if we keep these numbers) 50% of the last 5 years consumption has been accounted for by Equity Withdrawals, and the new restrictions both systemic (by the banks) and self imposed (by the peeps when they see their equity being eroded), and that doesnt strike me as a temporary blip down. We have been living on an orgy of credit and now we have to go on a diet!
Of course we (hpc bearish bloggers) could all be wrong, but i admire alot of people on this site who have put their money where their mouth is and sold out and started renting. Believe me thats a very difficult thing to do - when prices keep going up you end up looking like a fool! I've quoted what Keynes said "you will become insolvent before markets stop being irrational" and i for one know exactly what he means (its been rammed down my throat often enough by my peers). By mentaility i meant that for a market to significantly fall one of the criteria is a lack of belief that it will. Didnt mean that to cause offence.
52. techieman said...
by the way i wouldnt short the House Price index with because the spread is too wide. Other plays on the markets would be better, but I cant really go into those.
53. planning4acrash said...
Quiet guy, lending has collapsed. How, with increased supply, are prices to come down slowly? Given that supply and demand in the housing market is available liquidity divided by house sales, with some areas attracting more liquidity (confidence) than others, but the national picture conforming to the rule. I doubt that your suggestion is anything more than wishful thinking.
54. it_is_going_with_a_bang said...
Jardov:
It isnt wishful thinking it is merely the inevitable.
Nothing will stop the cycle of boom and bust.
One day in the distant future ..... how do people buy houses they can't afford to buy?
How do BTL landlords buy houses that they can't make any money on?
The only reason to buy is speculation ...
That future is tomorrow.
Add to that the huge amount of personal debt in this country.
It is not a pretty picture.
The higher you jump the harder you fall.
I don't expect anything to happen overnight.
But happen it will.
55. Quiet Guy said...
@planning4acrash
"Quiet guy, lending has collapsed ... I doubt that your suggestion is anything more than wishful thinking."
We are having a bit of a misunderstanding here. I am cautious because I have been wrong so many times before. Believe me I'd love to see a quick correction and a chance to own a place without becoming a debt serf. Perhaps "fearful" would be a better word than "wishful"?
See my comment to Jardov (if it ever gets published).
56. voiceofreason said...
I will stick my neck out here.
I estimate that January's Rightmove figure will be between -0.2% and -0.8%.
I think the bulk of the -3.7% we saw today is due to the rush to get low price properties onto the market before the HIPS deadline. Forced selling will bring bigger falls, but that's not till spring/summer 2008.
Now lets bookmark this thread and come back to my guess on 21st January :-)
57. uncle tom said...
VofR
You're probably about right - these indices are not perfect barometers, so when the data swings heavily one way, it often goes the opposite way the following month.
It's hard to call the exact path of the market on a month by month basis, and there is now a huge unknown in the system:
For the first time ever, we have a sizeable army of small time punters playing the BTL game with big sums of money that is mostly debt.
It's a fair bet that these people currently have an inflated requirement for clean underwear, but how exactly they will react over the coming months is a very hard call -
- persistant denial, or panic to offload??
I'm sure we'll see both reactions - but the proportion is hard to predict, and it will have a big influence on the timescale of the crash..
58. sold out said...
Jardov said "You guys are deluded if you really believe in ridiculous figures like 30, 40 even 70%!!! "
Perhaps you can actually explain why you have come to this conclusion,or have you just discovered this blog today and just decided to make a comment just to wind people up. I have been watching this blog for over 2 years,i sold my house in Dec 2006,and have been in rented ever since and have no plans to buy for probably 3 to 4 years.I have not taken that risk on a whim or a vague hope based on what i believe should happen.its been an informed decision. You claim to see no evidence of a house price crash, then i suggest you open your eyes and ears fully.Who is deluded?
59. Jardov said...
Sold - I'm not exactly a regular but have been popping in a and out of the forum for quite some time, my comment isnt meant as a wind up though as techieman indicated the written word is not always interpreted as its meant. I dont see that there has to be a crash and am still not convinced by your comments, I certainly wouldnt claim to be expert but there's so much more to it than the 3.5x earnings often quoted eg lower interest rates,
dual income which now appears to be the norm,
shortage of property,
cultural shift in thinking (why not? seems to me that far more people are obsessed by home ownership than when I first bought back in the 80's),
pension worries (no-one seems to have any faith in private pensions any more)
My bet is for market stagnation, in which case being out of the market you're going to do alright but drops of 10's of % - no way.