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House Price Crash Forum

laurejon

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Posts posted by laurejon

  1. Currently there has been an overdemand in the housing business. But wait a year of so and things will be different, I bet you wont hear that Firemen Teachers and so called key workers are griping they cant get onto a falling market.

    In the real world, nobody is owed a living. The firemen and the Teachers earn a decent wage, in fact in many cases more than decent. In the last recession there was ample opportunity for so called key workers, Government employees in the securist jobs in the land to buy property at knockdown prices.

    The truth is, they didnt and the reason is simple. They were not looking for just a roof over their head, they wanted a cast iron appreciating investment.

    I have no sympathy for them whatsoever, in the good times they complain they are not earning enough, yet you wont see them crying when private companies are laying off staff and they are getting inflation bustin pay rises.

    Property will always be a commodity to be bought and sold, if it wasnt we would all rent and give up going to work.

    I think the biggest problem with the whole situation is that the Governments have sold off the Council Houses, as I do believe that there are people who just dont have Lady Luck shining on them when it comes to education and jobs. These people and they number few need a safety net and council housing supported this ideal.

    The council house investement had long since been payed off and the councils owned them outright, therefore they were an appreciating asset for the community at large and actually generated an income for loca government over and above the maintenance costs.

    A particular example of this is Hospital Accomadation, in the old days a student nurse was paid a measely wage but had accomadation thrown in thus making their chosen carreer affordable, as was the case for many doctors. The Government has allowed this accomadation to be sold off for short term cash gains, yet now pay the hefty price of this short sighted approach as Student Nurses and Doctors cannot afford to pay commercial rates of rent. This has led to British citizens leaving the profession and the hospitals having to poach third world doctors and nurses from abroad, further complicating matters abroad for those countries that invested their last pennies in a health service.

    In essence, there has been gross mismanagment of this countries assets for over 20 years, and this is no suprise as we are governed predominately by Lawyers a profession that is steeped in history when it comes to ripping off Joe Public.

  2. The equation for property is simple.

    What can the general public, Mr Average afford to pay?.

    If you look at average earnings, the spending power of a the average couple will allow a payment of 700Pcm. Look at what you can borrow for 700pcm.

    Around 200K

    So its not suprising that the average house price is around that figure, put up rates and knock a few hundred thousand jobs out of the equation and Mr Average is either lucky to have 700pcm spare because he has a job, or he is trying to live on 37quid a week benefits.

    House prices are too high, and interest rates are too low.

    We are heading south in the market, and only a fool would think otherwise. I can say this not because I am an expert, but because I am an ex victim of two previous crashes and on both occasions I too thought property never went down.

  3. I think the real decline will be after the election, next spring should see a little more activity in the market as many people bottle out and fall prey to the Labour Parties spin on property.

    I will hopefully sell up next spring, and head over to Oz in late 2005. Sydney is seeing some falls in prices and I would think that as their cycle is ahead of ours by a year they will be hitting the bottom in two years time.

    Just by waiting since January this year I have already saved 100,000 Aud on a two bed unit at Manly Beach in Sydney. I would expect to get a least another 100k off before I would step into their market.

    Oz has for a period of time led the way in the BTL business, when I was out there in 1997-2000 the world and his wife had two or more properties financed by what they describe as negative gearing. We would describe this method of finance as insanity.

    The rental yeilds in Sydney now put the market firmly in favour of the tennants and the recent introduction of exit taxes on second home (Blair is thinking along the same lines) has pushed the market over the edge. Tennants in Sydney can now rent a two bed unit on the Northern Beaches for around 1,4000 Aud PCM the price to purchase that unit several months ago would have been around 550k Aud.

    The vacancy rate on rental homes is now reaching record highs serving to push the market one way. People are now realising that it may well be better to cut your losses and lose a 100K than wait for the day when the only purchasers are those attending the Repo Auctions.

  4. It is fairly obvious that this Government is quite big in the deceit business.

    The so called miracle economy, is built on the back of massive public spending by the Chancellor and rising houseprices that have been cashed in by many buyers thus funding the consumer economy.

    With regard to real worth, the UK is pitifull. There are very few businesses that have turned a profit over the past five years, this situation is obviously not sustainable. We are now seeing the green shoots of a recession, the mantra "No more boom and bust" peddled by the Labour government will merely be added to the whole heap of deception that has sorrounded this Government since it first took office. I have no doubt, they will have some irrational explanation as to why No more boom and bust was not yet another lie.

    The writing is on the wall, Job losses, massive consumer debt, massive government debt, and falling houseprices. That is a recipe for a recession on a scale yet unseen. I think those who are factoring in a property price reduction of 40% are thinking along the right lines.

    One could argue that interest rates are still low, and I would agree. However it is well documented that these rates are being held low artificially, to stimulate the economy. The Neutral rate is much higher, and you can be sure that slippery Blair would not be foolish enough to crash the market prior to the election.

    That said, post election it is inevitable that he will take the brakes off and get back to reality. Britain will have to join the big bad world yet again and rates will rise. The difference between this recession and the last is that today people are indebted to a much higher ration with regard to earnings.

    The BTL industry will obviously collapse and those properties will become the catalyst for the crash as they come onto the market thick and fast and the owners cut their losses.

    It is my belief having encountered two previous recessions that if we dont have a miracle economy we are heading into something far worse that a recession.

  5. I agree, many thousands of Jobs are being lost. The IT business is losing thousands every week to Bangalore and China and the numbers are huge.

    Its a great shame that our prime minister and the trade minister are actually traveling around the world promoting the export of British jobs to India and other countries.

    I would like to see how this overspending government, steeped in debt, and overmanned could ever finance social welfare in a recession.

    The average Joe in the UK is paying nearly 1,000 a month in taxes, take their partner into account and the figures are ridiculous. There is now way this government could finance a recession, and that is exactly what is happening.

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