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Everything posted by London-loser

  1. This might be true nationally but like I said they have forecast it for months in London and they have been wrong every time.
  2. Apollo, Could you please explain the logic of youre view that a house price crash CANNOT happen without ALL of these things? For example, if unemployment rose rapidly without interest rate rises (because the economy is knackered) wouldn't it be extremely likely that house prices would fall? And that is just one of your five necessary factors (others may precede or follow obviously). It seems you are trying TOO hard to convince yourself it is not possible.
  3. I don't get it? As Dr Bubb says "renting is the best revenge" in the current market. The truth is I'd love to buy and be settled... but I can rent for less than a 5% yield without the hassles of owning a property (maintenance etc) and with the flexibility (I'm hopefully off to South America shortly for a while) and without any risk of negative equity etc. Now, you could flip all of those on their head (hassles of maintenance = joys of making the place your own, flexibility = insecurity, risk of negative equity - risk of "missing the boat" etc) but I think there is no reason to change my mind at all at present. When might I? If my circumstances change dramatically (my wife gets pregnant etc) I'll start to think seriously about it. Or if the "fundamentals" change dramatically - rents soar etc. I don't see this happening and the way I see it I pay my landlord a pitiful return for taking all that geared risk. He's a nice guy like that. As soon as he stops being a nice guy like that I'll think about changing my mind. I hope that time comes soon but if it doesn't I'll continue giving my landlord a pizz-poor return while I do much better elsewhere. I'm getting richer in real terms for the inconvenience of not owning my own place at present, my landlord is getting poorer in real terms for the inertia of retaining his BTL.
  4. If you look at the actual survey (rather than the journos' take on it) it says: House price falls abate - as ONLY a net 21% saw prices lower. Unsold property on the market has RISEN. And surveyors are more confident. RICS survey So, we KNOW surveyors as a whole say house prices ARE still falling and that the oversupply has INCREASED. Then the surveyors THINK prices will rise over the next three months. Predicting what house prices will do in the next three months is difficult for anybody and I think I mentioned on previous threads about the RICS survey that the surveyors are actually really not very good at this forecasting. It is a little hard to see on the graphs but the dotted line shows the surveyors' predictions for the next three months while the full line shows the reality three months on. If they were good forecasters of three-month price movements then the dotted line three months ago should match the black line now. In London for example (my area, so my focus) surveyors have been predicting prices rises over the following three months for something like six months now... but it hasn't happened (they say prices are currently flat in London - a vast improvement). So I don't think people should get TOO excited about this. The RESULTS are bearish, the surveyors' OPINIONS are bullish. These opinions MAY prove correct or then again they may prove to be wrong.
  5. I'm not sure I entirely understand why the MPC is going to cut rates on the back of an inflation measure that is NOT its target falling while the inflation measure that IS its target continues to rise (and heading ever closer to that 3% threshold when Mervyn gets to write an open letter to Gordon to explain how he has fugged things up badly enough to be at least 1% out on the inflation target). I have just been reading about how Rachel Lomax (deputy governor at the Bank and normally seen as relatively dovish) has been warning how the MPC cannot become complacent. Apparently she has warned there is "no room for complacency" over "the INFLATION risks posed by near-record oil prices" and that the Bank needs to avoid kicking off stronger wage demands on the back of higher inflation expectations. Her speech was seen as "a further blow to hopes for fresh cuts in interest rates". Strange that she is not warning of the deflationary risks of high oil prices and promising further rate cuts, as you do. I can only assume you know better than her.
  6. I can't quite tell whether Marmiteman is another troll or another intellectually-challenged bull. Well, your first problem is clearly only a problem to you, since it doesn't actually exist in the real world. As for your "the government will never let it happen", I can only assume you are a very naive recent graduate who still believes the UK government is all-powerful. I'm imagining the Cabinet conversation the last time around: Maggie says "So, what about these house prices that seem phenomenally high and starting to fall? What do we do about them? Should we save the UK population or not?" Lawson replies "Nah, fug 'em." Maggie says "Yeah, you're right. Let's face it, both of us are bored with power, lets pizz off. After all, it's a bit unfair - the Tory's have ran the country for ages now, let's give Labour a go for 15 years or so." Your second point is slightly more intelligent. I'd agree there will be a credit tightening when the revolution comes and it will be much more difficult to get a "lie-to-buy" six times income multiples mortgage. However, for well educated professional people with good deposits who only want relatively modest income multiples (the majority of HPCers) I think the banks will be happy to lend to them. Your idea that banks will not lend to ANYONE is a bit fanciful. However, BTLs who have already demonstrated their ability to waste the banks' cash? Now, they may struggle to get extended lines of credit. Don't get me wrong, most HPCers want intelligent bulls to debate with but I think you need to pick up your game rather dramatically.
  7. Haven't you upped your offers yet? I thought you would have had somewhere in the bag by now, given you told us all last December was the best time to buy otherwise we'd miss the boat... etc, etc. As for the article, I'm genuinely surprised that you consider this to be positive. The guy is saying that our economy is slowing rapidly. And he is arguing our central bankers, who have done an excellent job of rebuilding the UK's reputation for monetary fortitude (perhaps you don't remember, since you were not in the country at the time, what an utter laughing stock the UK's monetary authorities were back in the early 1990s), now take their eye off the ball and look to boost growth at the expense of inflation (and their monetary reputation). I can see this would be good news for BTLs in the short term (I told BBB to "pray for inflation" about a year ago) but WHY is it good news for Britain?
  8. Indeed. I was thinking about a work colleague of mine today, he owns half a house (bought recently with a friend). If house prices are flat for seven-to-ten years (as stagnation theorists hope - he is one of them) with low income growth then in eight year's time he will "own" half a house (I don't know if he has a repayment mortgage or not but I'd hope so) with minimal equity and not notable a better salary than he is on today. How does he climb the housing ladder? Will property be "affordable" for him by then?
  9. Mercsl, This is certainly an interesting question and one that SHOULD be asked... even if it is a little too hopeful for me. Can I PROVE to you that UK property didn't spend the last 30, 40, 50... years permanently "undervalued"? No, I can't prove it but does it seem in the slightest bit likely? Given prices are determined by what others are willing to pay (rather than some set-in-stone "value") it's a bit of a long shot to argue along the lines of "people just didn't realise they were willing to pay more for their entire adult lives". Your comments about the banking system, rental laws etc ask a different question it seems to me. Not so much was property permanently undervalued in the past but whether (although perhaps property was correctly priced in the past - roughly) changes to these issues have permanently driven prices much higher. This is of course the old "new paradigm" issue - beloved of TTRTR, even if he can square a couple of its circles (nice to see you back by the way - hopefully with some improvements to your argument ). Are you seriously arguing that today, when we hear FTBs are priced out of 95% of the country, is a shining example of what things SHOULD have been like in the past? You mean FTBs should never have been able to buy property? Incidentally, I think the argument about there being a shortage of the houses people aspire to live in is a red herring - people's dreams/aspirations are limitless and have little to do with reality. I'm not sure anyone is admitting intervention kept prices artificially low - although of course changes to rental laws etc will change the balance (between the attraction of renting v buying and for or against BTL). Nodumsunreader, As ever, you disprove your name once more. You are fixated with nominal interest rates and insist on ignoring the effect a low inflation environment has on people's wage growth and therefore the long-term "affordability" of property. TTRTR, Interesting that you would come back to tell people not to bother. WHY? Just fill in the holes in your argument and you'll convert me. You prefer to pretend they are not there - your choice, but I find it a bit strange that you still insist on the superior tone. King of The Castle, You clearly still haven't grasped the subtlety of how important BTLs have become in today's "troubled" market. It may be true that they only represent 6% or so (I believe the percentage is higher, especially if you add in the hidden BTLs who don't tell their banks it is a BTL) but as you know most BTLs have multiple mortgages (so maybe 6% of the number of people with mortgages but I suggest a higher percentage of mortgages owed - and all interest-only and relatively new so an increasing slice of the mortgage debt). And obviously they buy typically at the bottom end of the chain - so one BTL purchase might kick off six house sales (no BTL purchase holds six house sales). If only you BTLs would quit telling us about how good the opportunity is and get filling your boots then this market would soon take off again. I would venture it has stalled because there aren't enough investors willing or able to buy at the bottom of the chains anymore and sellers are not yet ready to return the market to the FTBs (who can only really buy in numbers at lower levels). I think you guys are essentially all talked out (and all spent out). TTRTR, I see you still insist on sticking to that quaint view that rents are set by what landlords WANT rather than by tedious details like supply/demand for rental property, income levels etc. You tell us you get about a 6% yield, this is presumably because you do not WANT 7%, 8% or (tch, don't be stupid, who'd want it) 10%.
  10. Hi Dogbox, Hopefully nobody will shoot the messenger - it is useful info. What I think you are telling us though is that your friends are major gamblers (not good investors). This is NOT the smart money. They have fallen in love with BTL and bat off any potential downsides. You mention yields, they say "whatever, I'm doubling my bet", you mention demographics, they say "whatever, I'm doubling my bet", you mention alternative investments, they say... There's nothing wrong with that - each to their own. They MAY be proved right in the long-term... but it will be a result of luck not judgement. Essentially they are taking an ever bigger bet on the UK's future GDP growth and inflation. The real question for the UK housing market is how many of them are there and how deep are their pockets? I'd say not enough of them and their pockets aren't deep enough (without capital growth NOW they can't just withdraw ever more equity to fund the next purchase... they need to start injecting more money) hence the market has stalled. Meanwhile, I have such a landlord who is apparently not interested in yield etc... so I rent from him (given he is not really interested in how much rent he gets from me - details, long-term capital growth is all that matters ) and invest elsewhere. If he and his friends want to compete down my rent and have no capital growth for the next eight years (or whatever stagnation theorists believe in these days) I'll leave him to it and invest elsewhere.
  11. Interesting Rigsby, So does that mean you are no longer interested in selling, or that you are extremely confident that the 10% offer was a definite insult (your property is defintely "worth" what you asked or pretty close to it), or you think the offer is fair but the people above you in the chain do not, or what? Why did you put it on the market and why have you decided the best thing is not to sell anymore? Hopefully these are not too personal questions, I'm just trying to understand the mentality of people who presumably DID want to sell (it might help explain why prices are flat in your area but nothing is selling - vendor denial of reality etc).
  12. It will be interesting to see how all this works out. I think a lot of HPCers have felt that the UK's true unemployment rate has been hidden by shunting people onto incapacity benefit - I think the latest figures said 2.7 million people are officially incapacitated (10% or so of our working population!!!). We might find there is suddenly a much higher unemployment rate than our current low (but rising) levels. It might force a few more people out of their comfort zones and make them ask themselves whether the UK economy is actually as healthy as they thought (just before they took that five times income mortgage).
  13. Brainclamp, I guess we are destined to disagree forever. However, I fail to understand how tax breaks in themselves can continuously justify higher house prices (the tax has to come from somewhere and if we ever reach the rentier society you predict then, er, the landlords are the only ones with the money to pay the very high taxes). As for the immigration, low (nominal) interest rates and rents... we've been through this before. I think I had a long argument with TTRTR about how rents are more determined by what tenants can pay than by what "landlords seek", which of course ties rents back to the nation's wealth (which is perhaps why when BTLs push up house prices yields collapse - because the rent they can "seek" is still tied to what the tenants earn even if they have paid over the top for the property).
  14. It is VERY bad news if you have taken out a fat mortgage on a high multiple on the assumption that the economy will keep growing rapidly and therefore your salary will keep growing rapidly.
  15. I hesitate to post this since it is rather "macro" and only indirectly linked to house prices. However, I hope it will be interesting to some people. I received a quarterly update from an independent fund management group I respect highly and in it the manager notes: Essentially, he is saying ALL of the apparent economic growth in the UK (and the US) of the last four years has been driven purely by government spending (paid for through debt and taxes). It has been borrowed from the future (with the need at some point to pay it back) rather than genuinely created... and when the chickens come home to roost (or at least when the government stops borrowing and spending ever more money and starts to re-balance its budget) things will get very messy. Gloomy I know, but like I said I thnk these guys are VERY sharp.
  16. I just had a look on the National Statistics website - GDP growth has fallen from over 3.5% a year in mid-2004 to 1.5% now (more than a 50% fall in our GDP growth) to a level well below our long-term trend (about 2.5%). That seems like a fairly "marked" slowdown to me. Presumably Pownall is just happy we are not in recession(who the fug would take advice on the economy from a mortgage development manager anyway?). National Statistics - GDP growth
  17. As ever with these numb-nuts they don't quite see the key problem for FTBs. It is that they are now competing with BTLs for traditional "FTB" properties... and BTLs have bid prices up to silly levels. So, when the stamp duty level is increased they say this is great for FTBs... it isn't, BTLs get the same benefit and FTBs are no better off in comparison to BTLs. A £1,000 saving on stamp duty for a BTL just means he can pay £1,000 more for the property and make the same return he was going to make before the cut. The FTB has to up his offer by £1,000 to compete (if the price doesn't go up it is because it was too fuggin high in the first place). The FTB is NOT better off as a result of this change. Similarly, a 0.25% cut in interest rates will make the same property more attractive to a BTL (as TTRTR will tell us) so the BTL is now willing to pay more, so the FTB needs to be willing to pay more to compete... so he pays less in interest and more in capital (and potentially higher interest in the future). The FTB is NOT better off as a result. If any of these fug-wits REALLY wanted to help FTBs they'd lobby for changes (such as stamp duty changes) to benefit FTBs but NOT BTLs. This, of course, will never happen because the truth is these guys don't give a fug about FTBs. Thye care about shifting property and taking commissions. They are upset at present because they cannot sell to BTLs at current prices (not in enough volume anyway) and they cannot sell to FTBs either... no sales, no commission... so clearly life's not fair, the MPC need to help us out etc etc. Alternatively, these just need to get sellers to become realistic about prices.
  18. I think this is a VERY important indicator these days. As I mentioned on other threads, I think there is a very serious risk the main house price indices are starting to give a bum steer on the actual state of the market (given lack of sales, regional biases etc). We know the number of properties for sale is up and there is still something of a stand-off on prices. How this stand-off will end (sellers cutting prices or buyers increasing offers) is the key now (especially BTL buying, I'd say). My bet is that selling prices will be reduced - slowly and painfully (through gritted teeth) but reduced nonetheless. The only downside is it is a slow indicator (lagging) and I'm still not yet sure all sales are fully reflected in the ODPM data.
  19. Welcome Sceptical EA, I've always thought HPC welcomed people with different views ready for a debate... provided they have something more to offer than "HAA, you missed the boat, they ain't making any new land, house prices always go up... etc". Stick around and join the debate... and continue to give us the on-the-ground info.
  20. As long as you are happy the EA is giving you a fair market value (whatever that is these days) then I'd agree with leemo - take it and run.
  21. IMupNorth, Would it be possible for you to run a topic without the need to call pretty much every other forum user a "mentalist"? If not, would it not be entirely reasonable for every other forum user to direct abuse at you?
  22. Hope this is not morose... but doesn't he have a distinct vested interest in NOT getting you a good deal from anyone else?
  23. The thing is though the big chains are typically quoted stocks (or owned by quoted companies) so they cannot hide their pain from "the market" in the way a small EA might. They have shareholders to satisfy... or the chief exec doesn't get his fat bonus.
  24. Today's City Diary in The Times has a small piece entitled "Sign of the times?" Tough competition, too many agents, slowing market... like the man says it's a start. EAs will be the bear's best friend.
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