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House Price Crash Forum


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  1. Using the period of the greatest monetary creation in human history to support your thesis is like saying that you have spent 30 seconds blowing up a balloon and on that basis expect within a year to be able to proudly rival the diameter of the earth. It ignores plenty of contradictory cycles throughout history including, most recently, Japan's experience. However, previous cycles have never had the level of monetary stimulus - if you think the only way is up for UK property and have invested accordingly then I can only say I wish you the best of luck. From a vantage point whic
  2. All CB's have waited as long as is possible to wean their respective economies off ZIRP and have then tried to dictate the rate/pace which has for the most part worked but is now teetering under the influence of market forces. The dynamics are often subtle and there is still far too much emphasis given on month-by-month and even quarterly indicators as opposed to the broader trajectory - this is a myopic viewpoint. There will be a rate hike in May because the markets have priced for one - that is the difference between then and now - previously CB actions dictated market responses w
  3. TonyJ gets it^ Some are falling into the trap of ascribing too much importance to individual indicators - markets expect the base rate to rise, are pricing the pound accordingly - one thing the BoE is going to be very careful to avoid right now is causing sentiment-induced volatility - it is sending clear and unmistakable signals at the moment.
  4. What you have to try and remember is that inflation at this point will most likely be caused either by external price shocks (such as oil) or lack of confidence in the UK's fiscal / monetary position. To take an extreme case, if you were going to buy UK bonds in this scenario you would want to ensure that the annual yield compensated you for any likely fall in value over time - if inflation was running at ~5% annually then any bond whose yield was <5% would be nominally falling in value, you would also want to collect some interest along the way and factor for the risk that inflation r
  5. A return to 4% is well within the realms of possibility. Surely a sign of fragility if a near-return the historical average is regarded as a doomsday scenario given the UK was battling markets with double-digit rates for much of the 20th century. I suspect the notion that CB's could forever choose their desired rates will not persist for very much longer.
  6. Re: Gov't Props - please try to remember that at this stage all monetary actions have consequences right now - and almost all of them lead, via a chain reaction, to higher interest rates - which is to say the BoE could easily lose control of that process if sentiment were to shift. As to London pricing. I think the present trend continues for some time, YoY falls pretty much everywhere by end of year but once the cumulative pressures start to force quick sales at any price that will accelerate. As the saying goes "Slowly, then all at once". However, as with all data and especia
  7. I just had a look at Zoopla's data. I wonder if anyone has noticed that today the pricing graphs for previous years have been uniformly adjusted down and the last year's data adjusted up - this has been an overnight change that has pushed all areas (even London) that I have looked at into positive territory for 3/6/12mo respectively. I actually saved the pricing graph from a couple of weeks back and overlaid with today the net effect of reducing historical valuations and increasing 2018 valuations has been to show a house price rise in almost all areas I've looked at (eg. London) wh
  8. If I may say - I would avoid assuming conspiracy and plotting behind indices - the industry actually needs accurate data - that includes investors, developers and all sorts of other participants. There will be contradictory indicators and outliers as may be expected in the current economic climate and it is the plurality of data and how that pertains to pricing momentum that is important. I do wonder if anyone knows of a data source that tracks supply by area month-on-month - I may be incorrect but supply appears to be creeping up markedly which may suggest more rapid price movement
  9. I honestly don't think the Fed has much choice any more. I think as you say the general issue is that the Fed/BoE/ECB all know but can't admit that QE / LIRP / NIRP have largely failed to provide the meaningful growth and inflation that would have enabled them to be withdrawn painlessly. QE was supposed to enable CAPEX but instead of creating millions of new well-paid skilled and semi-skilled jobs, plant or productivity enhancements it has instead bankrolled over expansion of uncompetitive retail and service sectors while ensuring anyone who can be is fully invested in equities and property. I
  10. Re: London I think a forum like this is always going to have to self-scrutinize for confirmation-bias and it is good that it is not merely an echo-chamber or it would serve no purpose. That said I also think it is incredible that macro conditions have not had to fundamentally shift much at all to check and derail price appreciation. London property prices have almost certainly spiked and it is extremely hard to see any more upside. These conditions are going to deteriorate as interest rates start to rise and the UK's precarious (knife-edge) financial position puts Gov't / BoE in a po
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