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House Price Crash Forum


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Posts posted by Jonnybegood

  1. If you think back to 2005 when we had the halt in the housing the market and the first false dawn of potential house price falls.

    Soon after the markets picked up again and house prices surged even higher to peak in 2007, since the peak there have been mixed reports of both rises and falls of house prices depending on the papers and reports that you read. However the main indices, Halifax , Nationwide and Land registry seem little unchanged over the past couple of years. (One month up one month down).

    Having looked at a number of different surveys , reports , trends I am of the opinion that house prices are not going to fall greatly from here and that by 2015 you will be paying similar money for a property that you would of in 2005 and that is where the market will bottom in average terms.

    That same £150k in 2005 will be buying the same property in 2015, so from an investment point of view it would of been a poor decision to hold on to the property for 10 years as many other investment opportunities would have returned far greater but from a buyers point of view, those in their early 20s in 2005 who maybe could not afford to buy into the property market and instead lived at home with parents are going to have accumulated 10 years worth of earnings and still be paying the same price for a property. Those who STRd in 2005 or earlier are not going to be any worse off unless the rental costs on their rented property were more than that of their STR fund annual interest or return on other investments.

    What people tend to forget is how quickly time is moving on, this forum is now over 7 years old and the housing market peak happened nearly 4 years ago, so to imagine 2015 is not that difficult, but If someone said to me in 2005 that I could buy a property in 2015 for the same money I would see that as a crash for the housing market in terms of other investment opportunities and potential to save money rather than spend on the interest of a mortgage by buying a property just to get on the ladder before its too late. That cash can then be used to put down a larger deposit.

    I think sites like this have run away with fantasy ideas of 50% physical falls in property prices, go to bed one night having looked at a property on right move for £200k and wake up the following and its £100k, the fact that people no longer say that next year this property will be 10% higher or wages will never keep up with house price inflation or 10 years time this house will be double in value is a victory, but just like fuel prices at the pump or Gas & Electric prices at home, once they get to a certain price and remain there for some time it tends to become the norm, I personally can never see fuel falling below £1 a litre again and people accept that even if they do not like or agree with it, the fall in energy prices 2 years ago everyone thought was great, prices went up 40% and came down 8%.

  2. They need to be at 5% plus.

    Agree pain will not be felt until we are at 5% levels, it was not long ago we were at close to these levels and everything ticked along quite nicely.

    Personally I cannot see the rate going above 1.5% by year end and with a large percentage on fixed deals, discount etc there will be very little effect overall.

    Even if you have been told 3 rises this year, the BOE can still take action a month or 2 later and drop the rate back down once they have analysed the affect of the rise.

    Realistically they cannot rise to fast with tax rises coming our way, job losses and benefits being pulled, it needs to be a staged approached with a 0.25% rise per quarter on average over the next few years being the approach I feel they will adopted until they get us back to 5% by 2014-15 and the next elections.

    The market will not crash because of it, it will adjust with asking prices reflecting the higher borrowing costs but with inflation adjustments prices will be similar to those of 2005.

  3. £30k feck me i,m a friggin pauper, company shares / bonuses/btls.......not the average joes i know :(

    I have a few friends who once worked at Tesco and done really well out of the free shares they got, obviously the further you were up the food chain the more shares you got.

    Admiral insurance another good example, their staff have received thousands in shares as the company expanded and made good profit, these people were just call centre type staff.

  4. Also don't forget many self employed will declare less earnings for obvious reasons... :blink:

    Many will do undeclared work on their days off

    Many claim benefits but also work

    Others get paid out in company shares and bonuses that are often not included in the figures

    Lots of variables - But I think a true picture is around £30k and even then people also get money from other sources to top up, stock and shares, BTLs, Ebayer etc etc

  5. If they have been sensible in their borrowing as you say they have been then I do not see any issues.

    They bought in rural Wales 2005 probably at a higher IR, so should now be paying less than they did when they first took out the mortgage.

    If they took the standard 25 year repayment mortgage with standard 20% deposit they should by now have around 30% equity, would not of thought that prices in rural Wales have fallen by more than 30% since 2005, so from my quick fag packet calculations they should at worst case be at break even if they were to sell up, i.e owe the bank nothing after the sale.

    Plus they have the option to let the property and/or go interest only / extend the term whilst they look for work.

    But if as Harry points out they were not sensible and bought a property with little or no deposit down and went for Interest only from day 1 then their options are limited and unlike you said earlier they have not been sensible.

    On the point of walking away its the worst thing they can do, if they declare themselves bankrupt it will be on record officially for 5 years which means no finance for those years, however there is ever increasing declarations that needs to be made on financial applications and even home/car insurance asking if you have ever been made bankrupt, its a good excuse for them to bump premiums and interest rates and little you can do about it.

  6. For a number of years on here people have kept going on about average uk house prices and average uk wages, officially average wages are around £26k per annum and uk house price £155k . So with a 20% deposit still leaves a 6 x income mortgage that is unaffordable.

    What these figures do not take into account are those people with second jobs, i.e Doing work on their days off and not declaring

    Self employed who do cash jobs and don't declare, these can often amount to extra thousands per annum and tax free.

    Those with large private pensions and still working

    Those with BTL and getting regular monthly income

    Benefit claimants doing additional work on the side

    Those on tax credits and earning above the threshold

    Those with tax havens living abroad

    I could give you many examples of the above, I had 2 guys working on my property over Christmas (Bit of rendering), legit building company who quoted £2800 to do the work over a 2 week period, this eventually ended up costing £2400 cash in hand with no paperwork and they got it done in just over a week. (Wonder how much of that Mr tax man will see).

    There are cleaners in the offices I work who tell me of their partners who do cash in hand jobs allowing them to still claim tax credits

    And there are engineers at work who work a shift pattern of 4 days in and 4 days off, on their days off they will do domestic electrical work, again the majority undeclared, one told me at a party over Christmas after having a few too many that last year he earned just as much on his days off as in work due to the none payment of tax, and he earns approx £50k per annum.

    Not sure how big a problem this is but surely it would throw the official figures, so maybe if all of this was taken into consideration then official average earnings figure would be more like £30k plus and when combined with low IRs make it easy to see how people afford these houses and how select numbers can buy 2nd, 3rd 4th properties to let out.

  7. I agree with you about the re-possessions, in the late 80's I had a house on a new build estate in the South East.

    I can remember coming home to my wife and remarking how a lot of people had moved out because every other house was empty, she replied "no, they have been repossessed" pointing one by one to every empty house in our street, and relating each tale of woe relayed through the stay at home mum's telegraph

    In relation to slow crashes, I've seen numerous graphs on these forums showing previous crashes took about 5 years to hit bottom, from what you've pointed out how long do you think this time 6-10?

    If you look at 5-10 years then from peak of 2007 could be anywhere between 2012 - 2017.

    Take the average price of an house before the real boom took off in 2000 (£80,000) you will see that following the long term inflation average of 2.5% + 1% an average house price today should be in the region of £125,000, a 20-25% correction from current prices would be needed to bring us back in line.

    Inflation I believe over the next 3 - 5 years is going to be far higher than long term average, however I don't feel house prices will go up any higher in nominal terms over the same period so in real terms they will be depreciating and by the end of the inflationary period circa 2014 house prices will have come back almost in line with long term average:

    2010 Actual average house price £168k - Long term average £125k

    2011 £125k + 2.5% + 1% Long term average £129,375

    2012 £129,375 + 2.5% + 1% Long term average £133,903

    2013 £133,903 + 2.5% + 1% Long term average £138,589

    2014 £138,589 + 2.5% + 1% Long term average £143,440

    2015 £143,440 + 2.5% + 1% Long term average £148,460

    These are only averages and each property area will have other reasons for growth and falls e.g those that have risen the most should fall the greatest if there was no fundermental reason for the rise, so as you can see there is still room for a 10% nominal correction on house prices, but if inflation does really kick in and wages follow that could quite easily be wiped out.

    I also see IRs below 5% over the same period, rising sharply end of next year, then 1% annually up to 2014 - 2015

  8. For me inflation is now a real risk to world economies and with the US continuing to flood the markets it just seems they will all do anything just to prop up the markets, be it housing or stocks.

    The DOW and FTSE have continued to rally since the summer when I thought it was going to fall and all indicators and normal logic would have agreed, but QE2 has lifted the market and recently so are the commodities, precious metals and energy stocks all on the rise (I am not moaning I have made significant profits from this sector) but I am now a believer without listing all articles , speeches and forum talk I have read and research I have undertaken that inflation is going to be much higher over the next 5 years.

    What it means for property? I feel the most likely outcome a stagnant market in nominal terms but heavy falls in real terms, its whether incomes increase around the globe as we accept this higher cost of living as a way of wiping out existing debts.

    Not forgetting we have a VAT increase in January, predicted to add an extra £500 to an average households bill annually and that is without taking into account those one off big ticket purchases and above inflation rises from the energy companies, an average family car will add an extra £350 alone.

    I was in the deflation camp 2 years ago, but for now and at least the next 3 years I see inflation as the dominant force, housing will become cheaper in real terms, its just that with all the other rises in the cost of living will they become any more affordable? My guess, only slightly.

    Its no longer acceptable to say that last time this and that happened and what is now happening is against logic, that may be the case but the markets are rigged and those at the top really are masters of the universe, and I believe now they may actually pull this one off, just check out the stock markets and commodity prices after the so called biggest recession of all time.

  9. I must say the shift patterns these guys along with the ambulance service and police work do not make much sense to me, its like for half the year taking into account holidays they are off work.

    Or over the 5 different shift crews 3 are always off work whilst the other 2 work the day and night shift between them.

    What I have found over the past number of years is that lots of these guys have secondary jobs on their days off, Plumbing , Building etc.

    Now times have changed and tightening of the belt all round is needed then I think its fair to question the shift patterns and are we getting value for the money spent, could a shift be knocked off? Shorter hours but more days in work etc etc etc.

    Maybe what we got is the best, but like everyone else they should still be as flexible as the rest when it comes to change.

  10. For all those struggling there are still many with lots of cash.

    Take Wales for example, probably one of the cheapest places in the uk to buy overall.

    Take the last 10 years away and before then you could have a nice public sector job in Wales paying upwards of £25k and buy a decent 3 bed home for less than £60k, so for those with a decent job in Wales property was cheap (I know I have lived through those days).

    So many either had nice lifestyles (Holidays, Nice cars) or large families or bought in additional property for buy to let (A typical buy to let back in late 90s £35k) and if it was in Swansea near the universities it would reel in large amounts of cash for little outlay.

    There are still large numbers of these people in Wales, 2 or 3 properties under their belts, mortgage free, they have just taken a few years out from buying more property (Prices went silly in Wales 2003 onwards IMO) and just waiting to buy back in.

    Many friends of mine who left Wales in the early 90s to work away retained their Welsh properties and now either continue to rent out or have since returned mortgage free.

    Then there are those who have their properties on the market for silly money with no intention of moving unless their asking price is met, don't really need to move are mortgage free but would downsize if they got the right money, I know a few of these down Gower way, they all have their properties on the market for £330k plus, quite happy to stay put, in their late 60s, kids keeping telling them to get something smaller.

    TMT Wales is not like it was 20 years ago, west wales used to be dirt cheap to buy, now with the internet and better transport you can be earning London wages whilst living in a cottage surrounded by beautiful scenery of the West Wales coastline.

    Friends of ours live just outside Saundersfoot, he's an electrician and she works for Lloyds TSB in London 3 days a week and from home the other 2, between them they earn well over £100k a year whilst their home in Saundersfoot they bought 9 years ago cost just under £150k, 5 bed, 2 bathroom etc etc.

    Other friends now living in Derwen Fawr Swansea can't believe the house they have for £380k (Bought around mid 2005 after selling up in Brighton), she's a Dental hygienist (£35 per hour) covering 3 practices in Swansea and he just day trades shares and part time financial advising from home after quitting his banking job in 2006.

    I could go on, surprisingly the Wales of 20 years ago is not as unattractive these days, its only when you have been away for some time that you realise what you have in Wales and compared to other places what you get for your money.

  11. What a load of tripe.... Falling house prices have a negative effect on bank cash flow hence the situation in the US in 2008, its where banks have the majority of the lending tied up and 10 years of excessive lending, 125% mortgages, self cert the banks can not afford to see prices fall to levels where walking away and handing back the keys becomes widespread.

    They are not concerned with making money out of those who have bought in the last 2 years, the numbers are insignificant, they are making enough money now with low IR, paying savers pennies whilst pulling in ££££ from borrowers.

    An old bank manager friend once told me, as long as people keep borrowing, and those borrowers keep repaying the banks will never lose, regardless of IR.

  12. From the late 90s onwards, house prices have become further and further detached from average wage but the reason for this simple and understood by most on here - banks have been lending progressively more. Consider that in 2006-07, half of all mortgages didn't require any proof of income and a third were IO: here you have this detachment at work.

    Now we get to 2007 and banks no longer have anywhere near the same quantities of money to lend out and are liable for risk again, so we have the beginning of the reset. However, thanks to the chumps in charge, and the props they installed (particularly SLS IMO), we have just been through a suckers rally.

    So now that is over and the correction will continue - however to say that prices will end up as 3.5X average FT wage is too simplistic - as the OP pointed out, a number of things have changed, in particular joint incomes and arguably lending multiples.

    However, average wages have been skewed by pay differentials (ie those earning stupid money pulling it up) and P/T work has been more or less replacing F/T so I would suggest that using median household income is more of a useful guide (which I think is around the 30K mark). But then it depends on what the average mortage income multiple is too - so assuming it is 4X then that would give me around 120K (+ 10% deposit) = circa 135K (median price for comparability).

    A similar calculation to what I was making...

    Average house price £135k minus 20% deposit = £108k

    Average wage £30k x 3.5 = £105k

    Plus when you add to this a possible 2 income household etc there is support for an average house to cost £130 - £135k even in a tighter lending environment.

    I am not a fan of comparing IRs because they can change, but at current rates the percentage of outgoings towards a mortgage will be well below average.

    I know that often 2 income families become 1 for a period when children come along, but like anything else, if your a single income household chasing a decent sized property you will always have competition from 2 income families and from a banks point of view I would of thought that 2 income families are less risk then single income.

    With regards to other posts: An average size 3-4 bed new build detached costs approx £80k to build by a large developer and around £100k for a small local builder, then you have land costs, utilitys , street lighting, roads, park and play areas etc that large developers have to provide to the properties.

  13. Current house prices in the UK stand at £168k, which I suppose most on here feel is too high hence "House price crash".

    So how much would be a fair accessible price?

    Alot of folk I tend to speak with about house prices bought in the mid 80s where they tend to agree an average 3 bed semi would of set you back £50k - £65k (£165k - £180k same houses today).

    So in 25 years average house prices here have trebled in value:

    So what should the average house price be today???

    Please consider:

    The different types of mortgage products now available

    Record low IRs - Both effect on borrowers and savers

    The major rise in 2 income families

    The drop in new home construction

    Lack of available land

    Restrictions on building

    The cost of new home construction - Insulation , raw material costs , new regs

    Location of the best properties - supply & demand

    The boom in the private rental market

    The sell off of council housing stock

    The fear of future inflation - NS&I pulling their inflation linked products

    Money still left from a decade of boom

    A small percentage of very high paid individuals - Footballers , bankers , top public sector workers

    Influx of eastern Europeans

    Overseas millionaires buying up property in London - Ripple affect

    The price crash of electrical items - TVs , DVD players , Microwaves

    Inflation adjusted the average price today should be around £115k - £120k or 30% - 35% less than today's prices, but considering the above and perhaps a few others what are peoples feelings of what today's average should be.

    For me it would be around 15 - 20% off todays prices - £135k average and staying there about for the next 5 years or at least until things in the economy are a little clearer

  14. Here we go second leg down, the US government is bankrupt and the only way is hyper inflation.

    Although real estate, metals, Australian and Canadian dollars seem to be the best bet...

    When Fed Chairman Ben Bernanke admits to seeing an "unusually uncertain" economy ahead, it's pretty terrifying to imagine what he's really thinking. What John Williams envisions—and he's by no means looking to the far horizon—is a systemic collapse, a hyperinflationary great depression and the cessation of normal commerce. Despite that bleak outlook, however, when the economist and editor of ShadowStats.com sat down for this exclusive Energy Report interview, he also had some good news.
    Unemployment will be a lot worse than most people expect. Housing will continue to suffer in terms of weak demand. But in this crazy, almost perverse circumstance, the renewed weakness to a large extent will help push us into higher inflation. Real estate tends to do better with higher inflation, but it's not going to be a happy circumstance for anyone.

    The government is effectively bankrupt. Using GAAP accounting principles, the annual deficit is running in the range of $4 trillion to $5 trillion. That's beyond containment. The government can't cover it with taxes. They'd still be in deficit if they took 100% of personal income and corporate profits. They'd also still be in deficit if they cut every penny of government spending except for Social Security and Medicare. Washington lacks the will to slash its social programs severely, to change its approach to ever bigger government. The only option left going forward is for the government eventually to print the money for the obligations it cannot otherwise cover, which sets up a hyperinflation.

    All of what I just described was already in place when the systemic solvency crisis broke. Before this crisis the government was effectively bankrupt. In response to the crisis, the government may have gone beyond what it had to do, but you err on the side of conservatism when you're trying to prevent a systemic collapse. That was a real risk. It still is. Irrespective of the politics of big government spending, quantitative easing, renewed bailing out of banks, whatever is involved, I'd argue that the government still will do whatever it takes to prevent a systemic collapse. That last series of actions had the effect of rapidly exploding the deficit. In just a year, we went from something under $500 billion in official reporting, on a cash basis as opposed to GAAP basis, to something close to $1.5 trillion.

    The energy report - 05/08/2010

  15. Took the A3 for a "free" MOT at local the Audi dealership yesterday.

    When I went to pick it up I was a little early so had a wander around the showroom, one of the sales managers approached and we got chatting about the R8 sports car that they have on display, telling me that they have sold half dozen in the past 12 months.

    I got round to asking who actually buys these cars, Doctors? , Solicitors? , Accountants?, with a smile he said actually the biggest customer of our top end cars these days are builders.

    He could see I was shocked by it, so he went on to tell me about previous dealerships he had worked at, Merc , BMW and the trends over the past couple of decades, early 90s you had PVC window companies, late 90s you had your computer wizz kids, its just cycles, builders and the whole building trade have been having their time which we have seen in the past few years.

    It is probably coming to an end for them though, not as keen as they were a couple of years ago, Just waiting to see who will take their place, we are still doing well as a dealership but like everywhere just need to put in a bit more effort to secure a sale, businesses have cut back on company cars but are quietly coming back, low IRs mean many are not saving but spending, especially those in the older age bracket which also helps.

    I could not stop thinking about the conversation whilst driving home, builders yes they earn good money if well established but £80k cars?? But I suppose a few big jobs a year and the odd tax dodge here and there and earnings of £100k plus are easily achieved.

    A mate of mine says he can build a good size double extension for £30k whereas a local builder will charge £60 - £70k or an attic conversation for £5k as opposed to £20k.

    I can understand people paying this kind of money for building work when they are able to keep re mortgaging and spending maybe £40k adds £60k to the value of your property, but in today's climate surely the average person is a little more careful in what they are spending, £50k to extend your property in a falling market does not make financial sense to me, 15 years I paid £18k for a 3m x 3m extension, property at the time was worth approx £170k, so if the extension added 10% to the properties value then I would still of broke even.

    Interesting times

  16. Paying off the mortgage has never been one of the main priorities for me, my wife returned to work after the children started full time schooling 6 years ago and since then the household income has doubled so in effect the mortgage liability halved.

    Would of paid the mortgage off in 2006 but instead moved property in 2003 and took on another 5 years (8 years in total) which is finishing next year.

    However last year we bought another property (This will eventually be our retirement property on the Welsh coast) taking on another 5 year mortgage as well as putting down a 50% deposit.

    This is currently being covered with rental that we receive from it.

    So yes we could of cleared our mortgage a number of years ago, so probably will not feel any different when we do finally finish all payments.

    As pointed out already on other posts, other household bills these days make the mortgage payments seem like spare change.

    Grocery shop £400+ Per month

    Energy £120 Per month

    Water £75 Per Month

    Council Tax £220 Per Month

    Other bills Phone, insurances etc £140 Per Month

  17. There is a genuine problem for employers employing young school leavers and those generally under 25.

    I spent the last 2 years looking after apprentices and graduate trainees, we are a multinational company and pay a good wage for these type of employees with good prospects both work based and academically.

    But if I am honest and shoot me down if you want the foreign graduates are the best we have, they want to learn and get on, where as many (far from all) the British grads just need that extra kick up the a**e from time to time.

    The apprentices are a totally different animal, there are 3 or 4 at the moment that are a serious concern for us, turning up late, falling to sleep on the job and forever on their Iphones or the like.

    1 particular apprentices was missing days, on the sick 3 times since April and almost used all his holidays, we had many conversation but never able to get to the bottom of his problem.

    It was only when I looked into where he lived and checked the place out that I could see the problem, he lived on a housing estate where approx 70% of residents are unemployed, there were guys drinking in the street, basically young people from the age of 16 - 25 just hanging around with little to do.

    When I dug a little deeper with this particular individual it came out that all his mates were unemployed and would be up until 3 in the morning drinking and playing computer games and he was finding it hard trying to hold down a job and hang out with his mates.

    Sadly he did not improve his ways and we had to let him go, so you can see even when good jobs are offered or given to youngsters in society unless it happens on large scale or those who cannot find paid work are made to get up the morning and do something worthwhile then it can be difficult for some to get out of the rut and break free.

    He was coming to work for £900 a month, having to pay petrol to get to work and run a car, pay his mum lodge whilst a couple of his older mates got a flat paid for, JS allowance and all the other benefits like council tax payment and no worries about getting up for work, just play computer games all day.

  18. I have always reported back on the good and the bad, trying to give a balanced view on the form, others it seem just what to hear only about housing market crashes and any thing just does not fit.

    Last night at the local a few of the local builders were out in force, wives in tow the lot.

    Over the past 5- 8 years I have seen these guys go from strength to strength, no longer driving around in old transit vans but newly new top of the range pick up trucks and owning nice cars as well.

    Anyhow when back in 2008 the first credit crunch hit these guys were not to bothered as many had 6 months worth of work ahead of them and to be fair the time it all started to pick back up again very few of them actually felt any recession at all.

    However last night the mood was different, they do not seem as relaxed about future work as they did back in 2008.

    There was one who has been doing building work in the area for the past 25 years and he was quite openly telling everyone last night that an £85k extension he had lined up for august is not going to go ahead, the guy who does shredding of confidential paperwork for the local authority has been told his contract will be reviewed in September and he feels that its going to be bad news, either he is going to lose the contract or be squeezed heavily.

    There were quite a few jobs being put on hold with local authority workers, they seem to think that the axe is going to fall heavily and already tightening their belts on unnecessary expenditure.

    Basically the general feeling was they can no longer rely on the public sector worker to provide them with work as they did last year, most have work until the end of August but then very little at the moment.

    Not saying this is the general picture for all the uk, but these guys are established builders with good names and many been through downturns before, but there seems to be worry amongst them at the moment, not that work will disappear all together but perhaps the prices they charge will need to drop in order to compete and that their current lifestyle off the back of that will need to adjust to the new era of austerity measures.

  19. It just goes on and on.

    If you read the small print of these public sector cuts they keep saying over the term of this parliament, same with social welfare cuts the majority of these from 2013, new assessments in 2012 blah blah blah.

    There is going to be cuts, there were heavy cuts in the private sector last year, many middle managers lost their jobs along with other technical , banking roles.

    You need to sit down look at your own circumstances, job security, funds etc, nobody else can make this decision for you as each has their own agenda, both bulls and bears.

    One thing that I did see last year and really brought it home for me was the efforts people go to in order keep their homes, it seems everything else is dropped as long as mortgage payments are kept up to date.

    I think it will be no different for the public sector workers, the good times are over and so going out for a slap up meal twice over the weekend will need to go along with the mobile phone contract, Sky TV and 2 summer holidays.

    The time all this filters through and real pain felt, it could be 2012 until we see significant annual falls again (i.e 10%) and then with inflation the change from today's prices will probably be negligible.

    I always use the following to see how prices compare now with long term averages using an average 4% inflation per annum

    Av house price 1999 - £78k - (Nobody I knew moaned about prices then, an average home in an average area seemed accessible to the average earner)

    2000 - £81120

    2001 - £84364

    2002 £87739

    2003 £91248

    2004 £94898

    2005 £98694

    2006 £102642

    2007 - £106748

    2008 - £111018

    2009 £115459

    2010 £120077

    2011 £124880

    2012 £129875

    2013 - £135070

    2014 - £140473

    Granted prices rocketed between 2001 - 2006 but by 2014 they should be coming back in line to long term average if they lose another 10 - 15% between now and 2014.

  20. Thing is in reality its going to take another 2 years to get back to where we were in 2008, cuts are going to be phased in between now and 2013.

    The public sector are notoriously slow at implementing change and there is always a danger of renewed effort to keep things artificially inflated with a co ordinated European approach.

    Friends of mine who have been renting since 2003 are unlikely to be able to buy before 2012 and then mortgage tightening and job threats worsen, they kept thinking the crash was coming 2005 and stuck to renting, then they thought 2008 was it and continued renting and now they believe its 2012.

    In the last 7 years they have spent nearly £80k on rent, by the time they buy it will be almost £100k.

    Back in 2003 they thought paying £155k for a 3 bed semi that was selling for £105k in late 1990s was crazy, now they have spent over half that price in rent alone and houses in the same area in 2009 were then selling for £245k.

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