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House Price Crash Forum

mohams

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About mohams

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  1. Am in the process of buying; have made an offer and I am hopeful of it being accepted. I had to bid and I think we outbid the other party (which is why I am hopeful). A couple of time in the last 3 months I was on the other side (i.e. someone outbid me). So doesnt look like there is a shortage of buyers. Someone said to me something that made a lot of sense. They said that there will be a correction. But house prices will not crash. They will stagnate and we will have to wait 10-15 years for salaries to catch up so that prices/salaries ratio is back to a sensible level. They said that the reason this is the case is that most people in London bought their houses outright so will not be under pressure to sell them (including BTLers)... So they will just hold on because they are long term investors anyway. The few that will be forced to sell are those that will cause the market to stagnate, but there are not enough of them to cause a crash.
  2. If house pricer are so high then good... and so be it. Economics caused it and economics always pervails. You can not restrict people to just buying one house. Thats just silly and won't work.
  3. There will not be a house price crash. There will be a correction but that correction can be either: 1. house prices crash to come down to average salary levels. 2. House prices staganate at their high value... and they remain there for a few years until the salaraies catch up with them (salaries rise die to inflation). What matters is the ratio of house price to average salary and this is more likely to be corrected via the second scenari above. I have been actively involved in buying ans selling property since early 2000 and to be honest most of me and my peers have not noticed any change in habits. Most BTLers are in for the long term investment.... the people who were in it for the short term are playing a risky game but these are slowly being priced out... but the make a small proportion of BTLers. So all in all... BTL is a new type of investment that is here to stay... why invest in bonds/stocks which you can not see and are not tangible... when you can invest in concrete... something which feels real... both are risky but almost surely to go up in the long run... except that property is tangible... thats the psychology of it...
  4. I have to disagree with the above. London has changed for the BETTER. Yes, it has become more expensive but that is a consequence of its recognition that it is a global city, home to the most active financial market, plenty of money coming in from investors/rich people... all the talent is in London... all this is GREAT. And yes it attracts immigrants... this is also GREAT because they bring in a wealth of cheap labour that no-one else will want to do. Thats the way the world works now... labourers are no longer, and SHOULD NO LONGER, be the driving force in UK... yes, they are important because they provide an important service but it is not the service of the future... their skills are no where near as critical as IT, business, finance when you think about the economy of the UK... So without the immigrants, we would only have 10 players on the pitch (yes, I class their cointribution as one player) but thats all the difference that it would take for China/India to ovetake us. I always go out of my way to hire immigrants/foreigners when I can to encourage and support their influx into the UK.
  5. To be honest I do not have 'proof' that the US buyers are more attracted to fixed than the Uk or vice-versa... maybe I am wrong so apologies...all I know is that the people who are causing the house price drops in the US... the so called 'sub prime lending' customers... (people with very low credit rating... who pay high rates... and can not take fixed rates like ordinary buyers)... this category does not exist in the UK... so my point is still valid... the cause of the housing problem in the US does not apply to the UK
  6. Exactly my point. To be honest I do not have 'proof' that the US buyers are more attracted to fixed than the Uk or vice-versa... maybe I am wrong so apologies...all I know is that the people who are causing the house price drops in the US... the so called 'sub prime lending' customers... (people with very low credit rating... who pay high rates... and can not take fixed rates like ordinary buyers)... this category does not exist in the UK... so my point is still valid... the cause of the housing problem in the US does not apply to the UK
  7. They said in 2005 that there would be a crash because a lot of people who took out fixed rate mortgages in 2003 would suddenly befaced with higher mortgage repayments. They said in 2007 that there would be a crash because a lot of people who took out fixed rate mortages in 2005 would suddenly find that rates were higher. Neither has happened. In fact, this article says that mortgage approvals are still healthy! http://news.bbc.co.uk/1/hi/business/6252688.stm And for your infomraiton... the long term fixed rates are set by banks but they are VERY loosely related to what the bank of england rates is set at. Yes, believe me... its true. The housingmarket is complex and influenced more by global financial markets... not a monthly meeting that 9 or so people attend to discuss ates... The banks that lend us money hedge their interest rate exposure via very long dated governement bonds.... and at the moment economies across the world are pumping into UK government bonds because the £ is strong and the UK is a secure investment... The result? Gov bond prices go UP... which means that interest rates from those bonds go DOWN... hence the fixed rates that Banks can offer are much more attractive compared to what you think... even if BoE rates go up... For fixed rates to go up... something at the macro level has to happen... With regards to the US/UK fixed mortgages... I thought that taditionally the US was floating... this s somthing I read... I can not be sure, but I've had it from multiple sources.
  8. What makes you think the UK follows the US 'always'? The major difference betweent he UK/US mortgage market is the fixed rate that UK buyers opt for while in the US it is mainly floating rate. This means it is easier for US mortgage holders to get 'caught out' if rates rise a few times in say a year. But in the UK even if rates rise... mortgage holders have a cushion period (2-3 years) to see that rates are rising... and figure out a way to re-organize their finances... even if they are unsuccessfull in organising their finances then they are still ok for the fixed period of 2 years say... and by then... even if their mortgage payments suddenly increase they are earning more (due to inflation/promotions/better job, etc) and so can absorb the higher interest rate.. The key is that they had a cushion period of 2 years. These fixed rate mortgages are not so popular in the US... this is helping the house prices down. These fixed rates did not exist in the early 90s... helping the crash in the UK in 1990s. Situation today is different. So I diagree... we probably wont follow the US because the reason that they are in the situation that they are in does not apply to the UK.
  9. To add: The UK is experiencing its biggest boom in years. Businesses are doing well. The FTSE is flying (despite interest rate rises). The city is paying record bonuses. All this filters through and will push prices higher. Not only for those making the huge bonuses but also those who make very modest sums... they will just push up prices in the sub prime property market. The £ is at record highs against the $. Since many currencies are pegged to the dollar it is fair to say that the £ is strong compared to many currencies. As such all those people who have been investing in the UK (many of them in property) since the late 90s will be reluctant to pull out. Even if there is a mini crash the strnegth of the £ will help them recoup some of their losses. This wil keep prices higher. Over the course of time people will accept the high prices. That may take a whole generation (people who were active in the 80s are 'used' to property being typically less than 100K, the new generation accepts that 300K is more realistic). But eventually the number of people waiting for a crash will wane and when they cut their losses and give in this pushes property higher. The only way to mitigate this is for everyone to stop but people are greedy and want to get one over each other...
  10. I dont believe it... I accept it. As does the majority in the country. Thats why prices are rising.
  11. Its just a website that prays off distressed sellers. There will always be distressed sellers. Not rocket science. Saying that it means the housing market is cooling/about to crash just because a few homeowners are struggling is laughable... there are 10 buyers waiting in line to buy each of those houses... BTLers, property developers... or people who can actually afford the place. No shortage of buyers whatsoever if you ask me. The fact that there are SO MANY people WAITING for the 'crash' is evidence that the market will not crash... as soon as prices ease off slightly... some will jump in and buy... taking prices back up again... then another wave of reductions will see the next group jump in.... at this point house prices will no longer be rising... they will stabalize and remain constant for some time... Crash? No chance. The average person in the UK is actually quite well off and able to absorb additional costs/ make higher mortgage payments easily... People talk about interest rates going up... but even a couple of % point rises will not severely affect most people (no one I know anyway, and I am assuming that this sample is representative since I am friendly will people from all walks of life)... but 5% rise... probably devastating.... except that it will never happen because that will have SERIOUS repurcussions on the whole economy and the BoE can not allow that. People waiting for a crash are atually waiting for a 5% interest rate hike... which will not happen. Even if it does it will happpen VERY slowly and economics will then ensure that people are prepared for it (higher inflation will result which means that people will demand higher wages which means they can afford the repayments... )
  12. Erm... do you REALLY believe that web site... like seriously dude... did it not... like... occur to you that it doesnt seem right... like... the website might be a distorted picture of the housing market and... like... totally misleading... no? Not fair to confuse reades that the next housing crash is looming with such weak evidence...
  13. Are you guys nuts? 1.3M for a 41 bedroom house?? £750 for an 11 bedroom??!! We wish!! That does not make sense... none of the houses that are being advertised make any sense. They are all BARGAINS. For £750 I dont expect more than 5-6 bedrooms. So if you think this is the beginning of the the crash then keep waiting as you all have been for the last few years. As long as people like me are happy to pay those prices you guys will continue to be left behind. And believe me... there is a generation out there who have accepted that houses cost several hundreds of thousands... certainly 7 figures for a 'very nice and decently big' house.. I know because I am part of that generation and as long as we continue to buy... prices will not crash. As for the advertised houses below... we wish!! Property is not that cheap.
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