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House Price Crash Forum


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Everything posted by Scooter

  1. Yep, Muslims kill Muslims endlessly but it is all Bush's fault. Hmm..."religion of peace" you say?
  2. At least 31 people have been killed in a car bomb attack on a kerosene tanker in the mainly Shia district of Sadr City in the Iraqi capital, Baghdad. [/indent] The Sunni Muslims that were probably behind it may have left the scene to join a protest in northern Baghdad over the Pope's statement that Islam fosters violence. More likely they have now gone to Manchester to join the "anti-war" protest.
  3. The dream of home ownership must one day surely shatter By Andrew Gimson (Filed: 15/09/2006) Comment on this story Read comments Something strange is happening to the price of houses. Over the past four years, the average value of a house in England has doubled to more than £200,000, yet first-time buyers remain willing to plunge themselves up to the neck in debt in order to get their feet on the property ladder. Are they being prudent, or are they succumbing to a collective madness that will end in tears? Three quarters of a million people have missed a mortgage payment in the past year, repossessions are running at their highest level since June 2001 and the Council of Mortgage Lenders this week urged borrowers to take "sensible steps to ensure their debts are manageable". But what in heaven's name does being "sensible" mean? The most sensible thing might be to borrow no money, to rent a place to live and to buy a house only if and when one has accumulated enough capital. advertisementYet to most of us, that prudent and honourable course seems out of the question. We cannot conceive how, short of living for 20 years in a tent, we could ever save enough money to buy a house outright, especially when property prices are rising faster than our savings. We find ourselves filled with the horrible fear of being "left behind", and we may also feel the deep urge to have our own place, no matter how small, and to walk about on a few square feet of ground which we can call our own. So we screw up our courage to the sticking point and embark on a reckless gamble. We find a house that costs more than we had originally intended to pay, we borrow more than we can really afford, and we hope for the best. If our income rises, and if within a few years the property is worth two or three times what we paid for it, then we say to ourselves that the gamble has paid off. But if our income falls, and house prices fall, what then? We lose everything, including the roof over our heads. It is the worst outcome one can imagine, and one which helped to finish off the last Conservative government. The present Labour Government has lasted a surprisingly long time in part because Gordon Brown has managed, whether by luck or good judgment, to avoid intruding on the love affair between us and our houses. Property prices have risen throughout his chancellorship, and help to explain why so many of us have remained so industrious. For as soon as one has taken out an excessively large mortgage, one finds oneself condemned to earn an income to match. The consequences of failure are so serious that they do not bear thinking about. We have to go on working in order to pay our mortgages, and also to service the other borrowings we have made on our credit cards. Excessive debt is the mighty engine which has kept the British economy going. Several years ago, I interviewed some car workers who were being forced to accept a horribly onerous new deal by their management. They had no choice because most of them were up to their eyeballs in debt. To go on strike was not an option, nor did they dare, by refusing to adopt new working practices, to risk the closure of the plant. There is almost nothing an Englishman will not do in order to keep hold of his house. His fidelity to his property is outstanding, even if the greater part of it actually belongs to his building society. I say "Englishman", because that is what I happen to be, but the same appears to be true of the other inhabitants of these islands. That is why the extra taxes and regulations imposed by Mr Brown have had a less immediately disastrous effect than free-market economists have predicted. British workers are not free. We are the prisoners of our debts. Ludicrously high property prices – a consequence of the artificial scarcity created by planning laws that restrict the supply of building land – impel us to take out ludicrously high mortgages, which in turn mean we have to work ludicrously hard, and often that both parents have to work ludicrously hard. But let us not draw an excessively negative picture of the way we live now. Millions of people enjoy the pleasurable sensation of living in houses that are worth many times what they paid for them, and millions of others live in hope of attaining that happy state. Feelings of affluence spread their way into the humblest home. Only those who see no way of ever buying a house are excluded from a share in this happiness. Stern judges may say it is ridiculous, just because one owns a house, to regard oneself as rich. Tolstoy gives a ferocious account of this kind of complacency in one of his greatest stories, The Death of Ivan Ilyich. He describes Ivan Ilyich's pride in his new house, which in reality "was just what is usually seen in the houses of people of moderate means who want to appear rich, and therefore succeed only in resembling others like themselves: there were damasks, dark wood, plants, rugs, dull and polished bronzes... His house was so like others that it would never have been noticed, but to him it all seemed quite exceptional." Tolstoy also noted that once Ivan Ilyich and his family got settled in, they found, "as always happens", that they were "just one room short", and also that their income was "just a little (about 500 roubles) too little". Soon Ivan Ilyich falls ill, and has more important things to think about than his house. But until something important happens, there is no doubt that the possession of a valuable house can confer a tremendous sense of wellbeing, while the knowledge that the value of one's house has fallen can promote a comparable sense of loss. House prices have been rising for so long that this has come, to many of us, to seem the natural order of things. Whenever I have ventured a prediction about house prices in the past, I have been wrong, so I shall not attempt to say what is going to happen in the next year or two. But it is surely quite impossible that prices will go on rising for ever and ever in the way they have over the past decade. It is possible to imagine a Conservative victory at the next general election, but it is also possible to imagine a collapse, through no particular fault of the new administration, in the by then grotesquely inflated price of property. We find ourselves engaged in the strange collective enterprise of blowing up an enormous balloon, which demands the constant supply of more and more air, or money, in order that it can get bigger and bigger. One day this balloon, or bubble, will burst, and with it the illusion of prosperity.
  4. House prices far too high, warns IMF as upward surge resumes By Gary Duncan, in Singapore HOUSE prices in Britain are still too high, the International Monetary Fund said yesterday. The IMF said that last year’s sharp downturn in property prices, which followed three years of double digit increases, had failed to restore balance to the market. British homes, it said, “still seem over-valued by most conventional measures”. The warning came amid new evidence of surging activity in the housing market, with property prices rising at their fastest for more than two years. The Royal Institution of Chartered Surveyors said that a hike in interest rates last month had failed to deter buyer inquiries from rising at the fastest rate for three years. House prices grew for the fifth consecutive month in August at the fastest pace since May 2004. Price rises were led by Scotland at its fastest pace in two years, with the North West, Yorkshire, Humberside and Wales also experiencing growth. Prices were static in the West and East Midlands which may have been held back by the impact of struggling manufacturing industries. The institution is sceptical about whether the acceleration can continue, with economists pencilling in another interest rate rise in November. A spokesman said last night: “Would-be buyers have been encouraged by a strong economic performance, but additional rises in rates before the end of the year could deter buyers as more pressure builds on personal finances.” This week it was announced that inflation had risen to its highest level for nearly two years and a survey suggested that up to 770,000 households have defaulted on mortgage payments in the past year. There were also growing fears in financial markets that an abrupt slowing of America’s housing market could plunge the world’s biggest economy into a severe downturn, or even recession. “A key risk...is that continued cooling of advanced economy housing markets will weaken household balance sheets and undercut aggregate demand,” the IMF said in its twice-yearly report on the world economic outlook. The IMF highlighted this threat as a key hazard for both the American and global outlook. “The US housing market could cool more rapidly than expected, triggering a more abrupt slowdown of the US economy,” it said. But it added that, “the concern remains that a sharp adjustment in the housing sector would generate strong headwinds for the US economy”. The “relatively mild and brief” economic slowdown seen in Britain after last year’s housing market correction offered some hope over the US situation, it argued. It also issued a sharp reminder to Gordon Brown, the Chancellor, that putting the Government’s finances into a more robust state will mean tough curbs on future spending plans due next year. “Fiscal consolidation will depend crucially on restraint of current spending,” it said. The fund’s main forecast was that the US economy would slow a bit next year, with its cooling property market cutting growth from an expected 3.4 per cent this year, to 2.9 per cent in 2007.
  5. They are saying aren't we all so fecking rich and smug.... Someone should try explaining the concept of inflation to them...
  6. I think you will find the paranoia about cakes etc has a lot do with companies like Claims Direct and the Accident Group set up to ambulance chase, no win-no fee litigation introduced relatively recently and a litigious culture inherited from the US. To link this bizarrely to your apparent hobby horse about US or Uk foreign policy and the alleged "culture of fear promoted by governments" says a lot more about your own paranoia. S.
  7. House prices show strong growth House price inflation picked up again in July Annual house price inflation in the UK picked up pace in July, according to the latest government figures. The Department for Communities and Local Government (DCLG) said prices rose by 6.0% during the month, up from 5.2% in the year to June. In particular, prices surged ahead in London, with annual price inflation in the capital rising from 5.8% in June to 7.0% in July. The average property in the UK now costs £194,454, the DCLG said. 'Firm rebound' Across England, house price inflation rose to 5.5% in July, compared with 4.6% in June In Scotland, house price inflation rose to 9.3% from 8.9%. But price inflation in Northern Ireland and Wales fell back a touch between June and July, but from historically high levels. In Northern Ireland the rate fell from 19.1% to 18.3%, while in Wales the rate fell from 8.5% to 7.4%. "The acceleration in house price inflation...confirms that the property market enjoyed a firm rebound during the summer months," said Milan Khatri, of the Royal Institution of Chartered Surveyors. All regions of the UK are experiencing annual house price growth above the level of the retail price index. The government figures confirm a trend for accelerating house prices that has also been evident in the Nationwide and Halifax house price indexes for last month. Many analysts expect the figures to add to the pressure on the Bank of England to raise rates further in the autumn, following last month's 0.25% increase, to curb house price increases in the future. "Many potential house buyers will be alarmed by the very real possibility that interest rates could rise again before the end of the year. We think these mounting affordability pressures will increasingly outweigh the support to the housing market coming from high employment and a relatively healthy economy," said economist Howard Archer of Global Insight.
  8. Worse yet, the local NW3 Friday property rag is now advertising this at £1.1m with a SOLD tag across it. What twit actually paid anything like asking? Yes, I know it probably means SSTC and the surveyors may have a field day but FFS....
  9. Timing is so hard and they got it wrong plenty of times so far. I get ridicule from friends who I tried to convince of an imminent HPC 2 or 3 years ago.
  10. I am not sure. The valuations are so stretched even for "wealthy" areas that you still might see nominal falls. When I talk to my neighbours, many of whom would like to move to family sized homes and are high earners by most standards, they cite unaffordability. This leads me to expect more than nominal stagnation and inflationary (deflationary?) real falls. S.
  11. I live in (own) and am looking to move within Hampstead. Prices are ludicrous for just about anything even in relation to average salaries for the postcode (about £60,000 I think). The prices may be higher than elsewhere and relatively they will remain so probably but this hardly precludes prices falling in real terms. Right now, not much seems to be selling in NW3 and a lot of aspirationally priced crap is sticking for months or in some cases years. I bought in 1995 and I am pretty sure that prices fell in real terms in period to around 1992-1997. S.
  12. yes, that was my reaction. It has been on for a couple of months, under offer for a few weeks (wish I knew how much!)
  13. 4 bedrooms, 2 reception rooms, 2 bathrooms - Offers in excess of £1,000,000 UNDER OFFER An interesting early 1970's built semi detached property arraanged as two self contained two double bedroom apartments and spacious basement rooms. Excellently located close to the local facilities of Hampstead, South End Green and Hampstead Heath. To the rear of the property there are two integral garages, space for off street parking and a 50ft garden. * TWO APARTMENTS * FOUR DOUBLE BEDROOMS * * TWO INTEGRAL GARAGES * TWO LARGE STORE ROOMS * SIDE AND REAR OFF STREET PARKING * * 50 FT REAR GARDEN * FRONT GARDEN * Imagine a semi-detached red brick garage with another one on top and a flat roof...can't seem to paste the picture...
  14. http://www.primelocation.com/uk-property-f.../dmaa999000250/
  15. ...but he is still saying "go for it at any cost" whcih may well prove very bad advice.
  16. Not sure about some of it. However the comment about the apparent ease in acquiring a degree in a "wishy washy subject like law" (yes I was a lawyer but no cheerleader for that profession) makes me wonder whether you have the faintest idea what legal training involves. I guess not. Other than the practical stuff, it is terminally dull IMHO but pretty rigorous and intellectually demanding. The attention to detail, volume of learning required and the application of logic and legal theory (not necessarily the same thing) makes it a tough option. S.
  17. Yep, expect lies and deceit! I so hate EAs. It has partly put me off moving for 12 years. Is now the time to encourage anyone to stretch themselves to buy in London or maybe anywhere at absolute peak pricing?
  18. Who knows when it will happen. But interest rates are rising here and in Europe, the US housing market and maybe Oz are crashing apparently. Taxes and other expenses are rising well above the fiddled inflation measurement, unlike wages. Timing is hard to predict and I have been expecting it for a few years but it all looks pretty bad right now. S.
  19. Something about his commentary annoys me and I am not quite sure what. Maybe it is the casual acceptance that he cannot buy anything very nice for hundreds of thousands and he appears relaxed about EA lies and fake offers. S.
  20. Houses might crash over night-you have to be on the ball to catch the bargains...
  21. Let the bad times roll: a bon vivant goes in search of a roof (Filed: 27/05/2006) Late on to the property ladder? Afraid so, says Julian Barnard At 35 years old and having earned an average London salary for several years, I admit I deserve no sympathy for my current first-time buyer predicament. Three racehorses, two sports cars, countless cocktails and candlelit dinners in the capital's finest restaurants have not left me ideally placed for the climb to the property summit. I have never paid a gas or electricity bill, only once visited a DIY shop (to buy props for a fancy dress party) and until recently thought ''white goods'' was a street code for something in the pharmaceutical line. As each such report is usually topped by headlines commiserating with those who have yet to pull off their first purchase, I hoped that by keeping my self-indulgent past under wraps I might benefit from a little first-time buyer sympathy. Wrong. After months of searching, it became clear that the market doesn't discriminate - we are all in the same boat, whether we deserve it or not. advertisementSo, for all you bachelor hedonists who have nothing to show for your years of fun, take heed of the following. Your principal weapon is cunning. Only weeks of low or no offers will drag the hard-nosed seller down from overpricing. If that fails, you could try sending some friends round to make rock-bottom offers, putting your slightly higher one in a better light. Turning to the estate agent and mortgage lender for help, I assumed they would fall over themselves for my business. Another miscalculation. If you are very patient, they will help you to invest in a shoebox; it took me six months to wise up. Try to remember, estate agents want to sell properties for as much money as they can possibly get, regardless of the house, flat or shoebox's actual worth, as most work on percentages. Vendors, meanwhile, will often choose the highest valuation, forcing up prices further. It is the purest form of capitalism and brings out the worst in all of us. A living space is worth what some poor fool will pay - that's why the market is beyond reasonable affordability. As a first-time buyer, never allow yourself to think that estate agents have your interests at heart. A few months ago, a nice young man tried to sell me a flat for £280,000; it eventually sold for about £240,000. I could list a dozen more which sold for £20,000 to £50,000 less than their original asking price. One way of avoiding paying too much is to keep an eye on the various property websites. Some agents may make up offers. I have walked into several different flats to be told as we go through the door that they have just received a close-to-asking-price offer. On one day, it happened twice with two different agents. This is a high-risk tactic, but one which must work for them, forcing buyers to make higher offers than they may have done aleady. Some offers will be genuine, but I have caught them out on a couple of occasions. The best thing is to stick to your planned offer, which, by law, they must put forward, saying that if the higher one falls through, they will get back to you. If it is false, they will be back. Obviously, the properties you like most, with well-proportioned rooms, appealing features and good outside space, will also be what other people like. Even in a quiet market, they will sell for the asking price or more. You should learn to spot them and discount them from your list as you are unlikely to be able to afford them. These places will only make what you can afford seem more unattractive. As for mortgage lenders, they are less mercurial than estate agents and vendors. Regulations have curbed most of their misdemeanours, but again they will not be offering any avuncular leg-ups. In any case, you should use an independent financial adviser, as they will have access to the sort of products that will allow you to borrow the most. If you want to borrow more than three and a half times your salary, which you almost certainly will, you will be offered an interest rate of 1 to 2 per cent above the base rate. The good rates you see advertised will not apply to you. Your credit rating is key to increasing your income multiples. So you will need to start toning up your score by paying off debts, ensuring you do not miss any payments on loans and credit cards, making sure you are on the electoral register, demonstrating your ability to pay a mortgage by showing similar outgoings on rent and ideally laying your hands on a 10 per cent deposit. Applying for other new credit during this time and changing your address will also lower your rating. If you can achieve all this in less than a year, you will be a few steps closer to home owning than most other first-time buyers. Use the large property websites, as they give access to almost all the agents at once: www.primelocation.com; www.findaproperty.com; www.ukpropertyshop.co.uk. Independent financial advisers: Primrose (www.primrose-associates.co.uk; 020 7420 3209). Foster Denovo (www.fosterdenovo.com; 020 7916 8282). John Charcol (www.johncharcol.co.uk. 0800 718191). Mortgage lenders (those that will offer higher-income multiples should be contacted through your financial adviser): Northern Rock; Alliance and Leicester; First National.
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