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red

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Posts posted by red

  1. The message seems to be "house prices will fall, but a return to the big falls of 2008 are unlikely." Well, I have to ask why not?

    Rewind back to 2007, and the message was "house prices will fall, but only by a bit"

    When the falls get going, there is nothing to stop them getting worse. Everyone seems to be lulled into a sense of security that even if we are in for a soft patch, it won't be as bad as 2008. Why not? In my view it could easily become as bad as 2008 again very quickly. As soon as people see their house prices falling they will dump them, and another round of tightening and undercutting will begin, and it all accelerates down. Bear market pschyology.

    And, crucially, without the ammo to halt the slide - no more IR cuts possible, mainly, plus the very real prospect of a D-D recession.

  2. They wont becuase too many "home owners" have mortgages that would be in negative equity if they revalued their house so are resigned to being stuck where they are for the next decade or so. This is why house prices wont crash down either, the individuals are carrying the debts ie neg eq and with the banks insolvent they cant afford to repossess and flog the property in auction becuase it will lower their book values making them actually insolvent.

    Its a stalemate that will take years possibly a decade or two to sort itself out. Sure you still have your gullible buyers but there are also forced sellers who will have to take a hit on peak prices to get the sale. It will be a slow long road down. Ten years up ten years down imo!

    DId you miss how quickly and by how much prices fell in 2008? Only dropping IRs to practically zero saved the market - they aren't going any lower and prices are falling again already. With the prospect of higher IRs and a double dip recession looming, do you really think anything can save the market from falling further and faster? It sure as hell won't take ten years.

    There are too many EAs out there. Some secondary and tertiary town centres are "just" EAs and charity shops.

    In 5 years, they'll all be charity shops.

    If it wasn't for rentals, many EAs would have folded by now...

  3. An absolute disgrace. The vested interests have got their way..... yet again.

    I really despair of this country. Despair.

    Calm down, Eric. THe banks aren't suddenly going to start lending silly money again anytime soon.

    Their agenda re: mortgages is clear - whatever the benign FSA decide - and that's to suck in as much cash via low LTV loans as possible.

    Anyone without at least 20% deposit is going to be paying a premium for years to come.

  4. The FSA dont need to bring in this restriction, the market is restricting itself, the banks are restricting the lending because they cant offload it anymore, the FSA could dissappear and it will have no impact on whats happening, which is credit destruction and further contraction and further reduced lending ultimately leading to a reset, its the same spiral down as the spiral up, both are unstoppable cycles when they are setoff which is why they are historically very common but that doesnt stop everyone thinking its wont go parabolic on the way up because its different and we are smarter and that it wont collapse on the way down because its different and we are smarter

    Spot on.

    Although I think your full stop key is missing... ;)

  5. yeah, but didn't you all hear - everywhere else might 'crash' 5% but London is immune.

    Oh yes.

    http://www.thisislondon.co.uk/money/article-23899384-house-prices-in-the-capital-to-defy-expected-5-percent-uk-fall.do

    London house prices will shrug off a 5% slide across the rest of the UK next year as buyers scrap for scarce properties, the estate agent Carter Jonas said today.

    Hmm. A quick check and Carter Jonas have London offices in Holland Park & Notting Hill , Hyde Park & Bayswater , Mayfair & St James's , Marylebone & Regent's Park , Knightsbridge & Chelsea - all prime areas.

    Prime for a twatting in prices, that is.

  6. Apologies if already posted - just on my way out for the night...

    Watching BBC NEws, some dude from the CML saying that FTBs should now PERSUADE their elders who have money sitting in low-interest accounts to use that money for their deposit!?

    I haven't seen anything so pathetic and dangerous for a long time - they must be sh!tting themselves!!!

    Disgusting.

    see also the thread about Ray Boulger - he was suggesting much the same on Radio 5 earlier today.

    Perish the thought that prices should fall.

  7. But there is a better way – five or six years of 5% inflation does the job nicely. That way we get to inflate our debt away and we don't have to go through all this austerity nonsense. In the long run, interest rates need to rise back to some normal level – say 4% – so that when the next shock comes the Bank of England can cut rates. For now, interest rates have to stay at 1% or lower until at least 2015, which hopefully will create some inflation. And more quantitative easing would help, as that adds more stimulus to the economy – which is positive for house prices.

    So we borrow ourselves up to the nuts to buy over-priced property at low IRs now, then come 2015 when base rates shoot up to 4% we just pray that wage inflation has caught up to bail us out of our predicament. Oh, and more QE just to pump things up a bit more.

    House prices must stay high at all costs.

    What a twunt.

  8. The best advice I can give here is not to listen to estate agent rampings. If you want to know what agents really think in the current Market read the comments for your area at the bottom of last weeks RICS survey.

    I agree - I'm not at all naive in this regard and am well aware of all the EA bull that might come my way... however, there's no disputing the facts: anything reasonably priced around here is selling quickly - and that's at asking prices that are significantly higher than 2008 'dip' prices.

    I believe this is purely down to lack of supply/forced sales and a re-enforcement of the belief that prices around here won't fall, hence buyers diving in.

    p.s. RICS spokesman Jeremy Leaf is one of the prime (and perma-bullish) EAs in my area, so I wouldn't bother reading his comments!

  9. Someone please tell the vendors (and buyers) in North London that prices elsewhere are falling; I enquired about a property yesterday and was told by the EA it was under offer and that such properties are selling immediately if reasonably priced, although they were selling for 100K less a year or so ago.

    Vendors, and more annoyingly buyers, are still caught in a bubble mentality around here and it's very, very frustrating; I am more convinced I should have jumped in during the dip of 2008, particularly as I now have a little one and Mrs Red is nesting big time!

    Although I feel the second dip is beginning, it's going to be a slow, protracted affair - particularly with few forced sales/low IRs.

    So good news re: DCLG stats, but I am not a happy bear today...someone tell me to get a grip and keep the faith, please.

  10. As an agent in central London the market has gone very quiet....people seem to be sitting on their hands. Volumes are well down and my boss says it spells trouble and says we should have higher interest rates as it would force people to sell leading to prices dropping and we would get some volume. Talking to the solicitors and mortgage brokers and it is pretty dire.

    Eh? Are you for real? An EA who actually 'gets it'? :blink:

    And your boss is suggesting higher IRs to generate forced sales to increase volumes? Wow.

    Does he/she keep this opinion to him/herself or share it with other EAs? I'm sure Peter Rollings would puke at the idea of lower prices...

  11. http://www.moneyweek.com/investments/property/moneyweek-roundtable-what-next-for-property-prices-50727.aspx?utm_source=newsletter&utm_medium=email&utm_campaign=Money%2BMorning

    Ever-bullish Assetz muppet Stuart Law going all out for HPI over ONE YEAR: +4%, FIVE YEARS: +21.5%

    And get this:

    ...We've seen two quarters now from the Royal Institution of Chartered Surveyors on rental growth and it's the beginning of a decade of a rental boom. People won't be able to buy and it will be horrifying how unaffordable rental housing will be.

    Merryn: So where will people live?

    Stuart: In rental houses. They will just stop buying fancy handbags and hand the money over to landlords instead. If rents are going up by 5%-10% a year for the next few years then slowing down a bit, that will support house-price growth.

    Class.

  12. yes, I agree, sellers who really do want to sell, seem to be slowly catching up with the news.

    For example, look at the reduction on this one.

    http://www.zoopla.co.uk/for-sale/details/1879341?search_identifier=decaefae2c08f3203ddbb9faee79e57c

    Also interestingly, my property bee shows me that this property sold in August 2009 when the asking price was £995,000, but the sale fell through in January 2010, and the asking price is now down to £500,000.

    History

    date event

    04 November 2010 * Price changed: from '£795,000' to '£500,000'

    12 August 2010 * Price changed: from '£895,000' to '£795,000'

    04 May 2010 * Price changed: from '£995,000' to '£895,000'

    30 January 2010 * Status changed: from 'Sold STC' to 'Available'

    18 August 2009 * Status changed: from 'Available' to 'Sold STC'

    29 October 2008 * Price changed: from '£1,200,000' to '£995,000'

    10 May 2008 * Initial entry found.

    Lovely stuff. And what we need to see more of. Genuine forced sale.

  13. Hmm.

    And yet from LBC news this morning:

    A first time buyer in London now needs to earn nearly 100 thousand pounds to buy an average priced home - valued at 363 thousand pounds.

    Research from the National Housing Federation shows people would still need a salary of 50 thousand pounds, even if they opted for one of the cheapest 25 percent of properties.

    That's nearly double the average income for someone working in the capital.

    Yet there will still be some morons out there who claim the answer to this is a return to looser lending criteria, not lower prices.

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