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House Price Crash Forum


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  1. From the eternally bearish Investement and Business News (http://www.invbiznews.com/wordpress/uk-floods-to-send-house-prices-down-80/) we see comment on the Times' prediction of a potential 80% drop in house prices in certain parts of the country: This comes at a time when confidence in the housing market is starting to wobble (although only slightly thus far) due to the prospect of higher interest rates. The government may have to bail out householders, but even if it does (by forcing insurers to provide cover as before) there are likely to be concerns by potential new buyers that the floods are here to stay. The effect of have a significant drag on prices may ripple through the market as buyers lose out on equity they thought they had, or new buyers hold off for a few years. Either will cause a depression in the market in the short term. Meanwhile, off course this may mean that other prices increase as people choose other regions to move to, away from the risky flood plain areas - putting pressure on prices. More likely, is that the underlying confidence in housing may be pricked as people begin to realize that the term ’safe as houses’ really has no meaning. http://www.invbiznews.com/wordpress/uk-flo...prices-down-80/
  2. I was hoping for one more push on rates by the BoE to help push house costs up. I'm out of the market at the moment and praying for the bubble to be pricked but this article suggests that the likelihood of another increase is receeding. Whilst I'm now sitting on cash, I'm wondering if I should join the hoards and go back into the market? It would be just my luck to get back in as the market crashes! Anyone in the same boat? We've been talking about the imminent crash now for some time, I'm beginning to feel like an 'end of the worlder'. Bank of England softens on inflation
  3. As if it wasn't bad enough that the nice man Mr Cameron seems to be a communist green thingie, daily mail readers will have a chance to finally join the big boys in the risky city hedge fund world. Yes folks it looks like "supermum" Nichola Horlick is to launch a hedge fund to the curtain twitching daily mail readers. The Business News Source takes a seemingly irreverent look at her rumoured upcoming hedge fund offering :- http://www.invbiznews.com/wordpress/horlic...fund-bandwagon/ As if the world wasn't risky enough !
  4. From the Business News Source http://www.invbiznews.com/wordpress/house-...continue-surge/
  5. I suspect that with all the talk about buy-to-let and house prices increasing again, many people will be tempted to use the Bank of England's hold on rate increases as a signal to buy buy buy - at any cost. My worry, as I've outlined before is that the newer entrants to the market are the ones who are going to be stung the most - and are the people who probably can least afford a CRASH. It took about ten years to recover from the mid nineties crash. In the business news article today the Bank of England is charactorised as being like Mr Magoo - so short sighted that he's always getting in trouble. Worse still, the article predicts an upcoming 'Bust' in the cycle which the BoE could prevent. See the article here: http://www.invbiznews.com/wordpress/bank-o...interest-rates/
  6. From http://www.invbiznews.com/wordpress/bank-r...se-prices-rise/ ...House prices have constantly outstripped inflation this past year, with the Bank of England’s target of 2 percent increase in CPI starting to look like a joke as house prices - generally the largest expenditure of any household – not even included. The ratio of rental yield to house prices is also at an all time low, indicating that storm clouds are gathering. The Bank of England will review interest rates tomorrow with the likelihood of an increase of 25 points still in the balance. A footnote from the Halifax notes that the full impact of the August increase of 25 points and increases in utility bills may prove to dampen the market towards the end of the year. It also notes that the strength of the buy-to-let market shows no sign of abating, with more ‘amateur’ landlords getting into the market. The concerns we’ve previously expressed are heightened by worries that the buy-to-let market is potential over exposed at the moment. As newer, less experienced landlords get into the market their leverage is high, so the combined elements of higher interest payments and low yields could mean that they are in negative income. If house prices turn then any potential capital gain would be wiped out and the ‘investment’ would quickly become a serious liability. Source The Business News
  7. With house prices increasing again beyond expectation even the once buoyant lenders are starting to get nervous and talk up the potential of an increase in rates. see House prices up - again http://www.invbiznews.com/wordpress/house-prices-up-again/
  8. I think that the million houses you refer to are owned by greedy 'buy to let' land lords - if you read the end argument in the article then its clear that the way to get these off the market is not to regulate, but to force the sale by making the houses too expensive to hold - ie increase the interest rates to 8%. The article hints at this anyway - http://www.invbiznews.com/wordpress/uk-hou...et-in-a-crisis/ There is only one way to alleviate the market issues and problems at the moment and that is to quickly ***** the bubble by raising short-term interest rates. This would precipitate a fall in housing values, but an increase in costs – thus re-aligning a more realistic balance and gearing of debt equity.
  9. http://www.invbiznews.com/wordpress/is-abr...od-for-chelsea/ and http://asia.news.yahoo.com/060914/3/2pvvs.html
  10. Also see this Is it time to focus on other than the CPI With the cost and affordability of basic housing going through the roof. More and more economic pundits are starting to question if the governments adoption or skew of components in the CPI is realistically reflecting what is happening on the ground. In countries as far apart as the UK and Australia the CPI measurement is affected more by the increase in the price of Bananas than the costs of local income taxes and housing. http://www.invbiznews.com/wordpress/is-it-...r-than-the-cpi/
  11. UK housing market in a crisis http://www.invbiznews.com/wordpress/uk-hou...et-in-a-crisis/ ....This shows the classic error of judgment that governments make, basically announcing policies that will ‘patch’ but not ‘cure’ the issues at heart.....
  12. So now the IMF has choice words to say to Gordon Brown and warns that a fall in prices is vertually an assured thing.. Here at The Business News Source - More grim news from the IMF for UK house buyers
  13. The article in the Business News Source points to the factors that could lead to a crash in the market and how it may be creeping up on us despite the fact that house prices are increasing still. ...The research also found that 2.6 million people who currently rent their home aspire to own a property but do not think they will ever be able to raise enough money. A further 5.5 million said they did could not afford a home at present but hoped to buy in the future. At the same time today, the Office of National statistics announced that UK unemployment was at a six year high, rising by 93,000 to 1.7 million in July. As we’ve outlined before, there will not be one cataclysmic event that will bring about the bursting of the housing market bubble, but a confluence of seemingly small events that when added together will propagate a serious crash in the market, this goes beyond a pure ‘market confidence’ issue... Read the full article here
  14. According to this article there is growing worry that many are going to get stung in the UK if the housing market eventually follows the US one downward. ...As noted in our recent article we are concerned that lenders are becoming increasingly lax about lending and affordability. At the moment for many buyers desperate to get into the market there is little concern about repaying debt and more focus on just finding ways to leverage as much debt as possible – a damn the consequences. The Bank of England needs to very seriously look at the current over priced market sector and find a way of pricking the bubble more rapidly. News of further increases will only encourage more profligate borrowing. All the while the Housing Market in the UK pretends that it, and it alone has found a way of defying reality... [MORE HERE]
  15. This article in the business news source outlines the common link between mis-selling in the US and the UK and how it will affect borrowers inn general and potentially the housing market over the next few months. Grim prospects for both I'm afraid. If you bought into fixed interest loans or are looking at getting in then this is for you. US and UK housing market in a fix This week’s cover of Business Week asks the question ‘How toxic is your mortgage’. The article centres on the recent usage and promotion of ARMs to buyers in the USA as a way to cheap deals. Unfortunately many customers are now finding that what was originally a promise to help them get a foot hold on the property market has become a liability, threatening to lose them their homes and leave them in debt. Much of this ‘mis-selling’ is also mirrored in the UK though there seems to be less worry from both consumer watchdogs and government about the practices....
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