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Are We All Going To Buy Property Now (those That Can Afford It)

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It has been different this time hasn't it.

They have played the longest of long games using every twist and turn at their disposal, indebting the country truly horrifcally to either buy a few more months of pseudo boom or an election chance. I dont see how mega debt can lead to sustainable boom and rebirth myself, its a real moronic non-solution imo.

So...as over-priced as property seems, have we

either just witnessed actual hyperinflation for real with property incredibly becoming "worth" what the media and VIs now try to get for it (ie making a bubble price the hard to stomach norm)

or

are we buying because they are deliberately scaring people out of holding fiat [paper money, Mr Newbie] with their QE and shall we say "interesting solvency issues" re the banking system

or

are we buying because the herd SEEMS to be.

Will property prices only actually reflect any kind of sanity once the last pessimistic sideliner turns bull and commits to a mortgage or spends their STR fund etc? Is that the trap awaiting us? Is this how it plays out?

And if that bubble like price becomes the norm, surely wages have to double or there can be no buyers?

And if wages dont double then you have to keep permanently high multiples and permanently very low interest rates and enslave people to debt for decades.

Or...?

edit - out of holding fiat, oops / bubble price

Edited by loginandtonic

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Any increase in property prices presently will be purely a matter of monetary factors rather than a reflection of rising production - it will be short lived and will strangle real production further.

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This is a bull trap fuelled by fear, QE, and loads of hype. The MBS market which fed this bubble isn't there anymore so neither is the cheap, easy credit to maintain it. Price falls will resume in the Autumn and continue throughout 2010.

Anyone with cash who panics and jumps in now will regret it.

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Any increase in property prices presently will be purely a matter of monetary factors rather than a reflection of rising production - it will be short lived and will strangle real production further.

good post imo, thx

This is a bull trap fuelled by fear, QE, and loads of hype. The MBS market which fed this bubble isn't there anymore so neither is the cheap, easy credit to maintain it. Price falls will resume in the Autumn and continue throughout 2010.

Anyone with cash who panics and jumps in now will regret it.

stephanie flanders on the bbc 1 news seemed to imply the recovery has definitely started for the UK, but added a caveat on property (surprisingly) that they were low volumes of sales.

what is unclear is whether i am right when i understand the bank of idiots cant xerox more than 200bn without their aaa going south.

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This is a bull trap fuelled by fear, QE, and loads of hype. The MBS market which fed this bubble isn't there anymore so neither is the cheap, easy credit to maintain it. Price falls will resume in the Autumn and continue throughout 2010.

Anyone with cash who panics and jumps in now will regret it.

I have just saved 10% and since mar 08 said I would buy in september 09. I had no factored in how massive any stimulous plan would be. Now I am happy where I am. Now I am thinking I should buy a home when:

Inflation gets stupid or

When I can't be rsed to hang on any longer

After all when I have bought I will stick my head in the sand and ignore whether prices have gone up or down

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Maybe i should put up with living on a crappy estate in a crappy town and offer £45k for this - it would cost about 25% of my fund, and it could act as a hedge.

http://www.rightmove.co.uk/property-for-sa...ncludeSSTC%3Don

I wouldnt, but thats pretty cheap. One sold as recently as 2007 for £114k on that road.

http://www.houseprices.co.uk/e.php?q=jubil...+wellingborough

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It has been different this time hasn't it.

They have played the longest of long games using every twist and turn at their disposal, indebting the country truly horrifcally to either buy a few more months of pseudo boom or an election chance. I dont see how mega debt can lead to sustainable boom and rebirth myself, its a real moronic non-solution imo.

So...as over-priced as property seems, have we

either just witnessed actual hyperinflation for real with property incredibly becoming "worth" what the media and VIs now try to get for it (ie making a bubble price the hard to stomach norm)

or

are we buying because they are deliberately scaring people out of holding fiat [paper money, Mr Newbie] with their QE and shall we say "interesting solvency issues" re the banking system

or

are we buying because the herd SEEMS to be.

Will property prices only actually reflect any kind of sanity once the last pessimistic sideliner turns bull and commits to a mortgage or spends their STR fund etc? Is that the trap awaiting us? Is this how it plays out?

And if that bubble like price becomes the norm, surely wages have to double or there can be no buyers?

And if wages dont double then you have to keep permanently high multiples and permanently very low interest rates and enslave people to debt for decades.

Or...?

edit - out of holding fiat, oops / bubble price

It hasn't been that different this time. We are still in the stand-off phase, where sellers aren't selling, and buyers aren't buying, and until we get past that, you shouldn't even consider buying a property. It is an excellent time to sell at the moment, provided you price sensibly, because you have very little real competition.

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It seems obvious that what we had from 2000 to 2007 was a giant pyramid scheme, backed by easy credit. No way was this sustainable, and once the FTBs ran out (or were priced out) then it started to collapse.

Now, I know banks have made mistakes in the past but they have nearly lost everything over the last year, and I just can't seem them being so reckless for a great many years yet.

Which means if the banks are not going to support a massive pyramid scam we have still some way to go yet.

The people buying now are a mixture of those with enough cash to get on with their lives and are not too bothered if prices fall further, those caught in a bear trap and the stupid.

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It seems obvious that what we had from 2000 to 2007 was a giant pyramid scheme, backed by easy credit. No way was this sustainable, and once the FTBs ran out (or were priced out) then it started to collapse.

Now, I know banks have made mistakes in the past but they have nearly lost everything over the last year, and I just can't seem them being so reckless for a great many years yet.

Which means if the banks are not going to support a massive pyramid scam we have still some way to go yet.

The people buying now are a mixture of those with enough cash to get on with their lives and are not too bothered if prices fall further, those caught in a bear trap and the stupid.

It doesn't really matter that you have been sensible enough to save up some cash when the government debases it and holds interest rates at stupidly low levels.

There will come a point where it actually looks attractive to buy a house, even at a nominal value that is too high. With money printing set to continue it will make less and less sense to hold cash and not all of us want to become investors or market players.

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Are We All Going To Buy Property Now (those That Can Afford It)?

Clearly a few are being duped by the relentless media spin, but I have never been more relaxed about staying out of the housing market.

I sleep well at night and wake up with a smile on my face. If I were to take three or four hundred grand out of the bank and buy a house, in today's market, I suspect I'd become a nervous wreck.

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Ill repeat what Ive being saying about this today.

we have had a bubble in property caused by borrowing.

all bubbles are caused by A: a fuel and B: people

People are generally predictable.

People like bubbles....they think they can take advantage of them.

when the bubble bursts, people are still thinking in bubble mode.

the bursting will slow at some stage, it always does. the people in bubble mode see the return of the market they thought they controlled.

They feel vindicated again. time to get back in or they will miss out, or they missed out last time, wont catch me again.

course, this phenomenum has a name. why does it have a name....because it always happens...always.

Its called a bull trap.

we are in such a bull trap.

people are going to get caught in the trap.

its only human to do so.

and one more thing.....Nulab know all about this phenomenum...make no mistake....they knew about it and planned to take advantage of it as a failing economy means loss at the GE for them.

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This is a bull trap fuelled by fear, QE, and loads of hype. The MBS market which fed this bubble isn't there anymore so neither is the cheap, easy credit to maintain it. Price falls will resume in the Autumn and continue throughout 2010.

Anyone with cash who panics and jumps in now will regret it.

I'd agree with that. If we see mild inflation, then they will have to raise the rates. And house prices will fall at even a faster pace.

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Are We All Going To Buy Property Now (those That Can Afford It)?

Clearly a few are being duped by the relentless media spin, but I have never been more relaxed about staying out of the housing market.

I sleep well at night and wake up with a smile on my face. If I were to take three or four hundred grand out of the bank and buy a house, in today's market, I suspect I'd become a nervous wreck.

God I wish I could say the same, three weeks ago lost out on a bungalow that needed quite a bit of work but the figures stacked up for me and it would have put an end to renting which I don't like and I feel I could have got on with my life. Now my husband is ranting every day at the spin in the news and it's getting harder to hold of buying 'anything will do''. Don't know how much longer my nerves can stand this.

ML

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This is a bull trap fuelled by fear, QE, and loads of hype. The MBS market which fed this bubble isn't there anymore so neither is the cheap, easy credit to maintain it. Price falls will resume in the Autumn and continue throughout 2010.

Anyone with cash who panics and jumps in now will regret it.

Couldn't agree more. The Daily Express , Guardian etc are trying a few more desperate pathetic efforts to enliven the market , which I think they already know will experience even greater collapses in the next six months from October. There will also a few more Estate Agents going down the Suwanee as well.

I can afford to buy a mortgage free property but am waiting for an extra 25% drop at least. I want more surplus ££££ to enjoy my life with but it seems there is surplus of thick people on this island who want a big mortgage so they cannot enjoy life.

I have a few friends who can also buy without mortgage and they think the same way.

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God I wish I could say the same, three weeks ago lost out on a bungalow that needed quite a bit of work but the figures stacked up for me and it would have put an end to renting which I don't like and I feel I could have got on with my life. Now my husband is ranting every day at the spin in the news and it's getting harder to hold of buying 'anything will do''. Don't know how much longer my nerves can stand this.

ML

That's a shame.

I like renting, we've been renting the same house for over two years with almost another year to run, not that we are there all of the time, as, being retired, we spend a lot of time "on holiday" in France, where we are at the moment, so you could say we're getting on with our lives.

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God I wish I could say the same, three weeks ago lost out on a bungalow that needed quite a bit of work but the figures stacked up for me and it would have put an end to renting which I don't like and I feel I could have got on with my life. Now my husband is ranting every day at the spin in the news and it's getting harder to hold of buying 'anything will do''. Don't know how much longer my nerves can stand this.

ML

I remember the last recession and those that did exactly that, people were buying disused public toilets and converting them to houses FFS! When interest rates doubled many wound up homeless being dumped on dire council estates or really grotty bed and breakfast places. At least when you actively rent you choose where you live. House purchase is a fairly major undertaking, better to make a considered purchase than rush in and deeply regret.

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Ill repeat what Ive being saying about this today.

we have had a bubble in property caused by borrowing.

all bubbles are caused by A: a fuel and B: people

People are generally predictable.

People like bubbles....they think they can take advantage of them.

when the bubble bursts, people are still thinking in bubble mode.

the bursting will slow at some stage, it always does. the people in bubble mode see the return of the market they thought they controlled.

They feel vindicated again. time to get back in or they will miss out, or they missed out last time, wont catch me again.

course, this phenomenum has a name. why does it have a name....because it always happens...always.

Its called a bull trap.

we are in such a bull trap.

people are going to get caught in the trap.

its only human to do so.

and one more thing.....Nulab know all about this phenomenum...make no mistake....they knew about it and planned to take advantage of it as a failing economy means loss at the GE for them.

But, if there is fuel and people, why do you conclude the bubble will fail?

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Given the extent of QE and that it is continuing, how much will it take of commodity price rises, oil price rises etc to help sustainnthis faux recovery and deliver a bit of inflation. Then you can factor in a chunk of inflation on the back of the increase in VAT which is coming, and you have some solid inflation figures to look at. Season the mix with an increase in the RPI as mortgage IRs go up with base rates......Chuck in a bit of price rising due to the weakness of the pound due to fears around the QE and you might well get a bit of inflation out of nowhere......

What will the BOE do about that.......suck up the QE money.....What with...how does that work?

Bang up base rates to 4%? WHich will floor borrowers and kill the banks margins too in all likelyhood.

What will be the impact on house prices? Surely it is a one way bet???? What am I missing?

If house prices fall again, the impact on the banks is going to be catastrophic, with massive defaults, squeezed margins and lower asset prices to write down!

Edited by Hip to be bear

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Back when I joined this forum, people would often say the market would collapse "when the last bear turns bull".

That is making more sense now than it did back then, but people don't say it so much.

Funny old world.

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Starting to get to me now this. I am in a position to buy cash, although the money is in fixed accounts untill October 2010. The one smart thing i done before they starting cutting rates was to get 7% for 2 years.

Currently not working as a bricklayer/builder and was hoping to get back into property and generate my own work next year, thats starting to look unlikely with all the measures they are taking :blink:

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Back when I joined this forum, people would often say the market would collapse "when the last bear turns bull".

That is making more sense now than it did back then, but people don't say it so much.

Funny old world.

that is what i fear, typically many may resign themselves that the govt "will never let it happen" and buy and then lose their money/neg equity. a man with Brown's selfish ambition is a dangerous opponent, but certainly not likely to be re-elected even if he pulls some fiscal gift out of the hat just before the election, which i wouldnt put past him as he seems to not give a fig how deep a hole he digs for future administrations and the public as long as he gets enough votes to return to number 10. did i mention he is also sadly deluded, he stands no chance whatsoever and i mean no chance.

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Couldn't agree more. The Daily Express , Guardian etc are trying a few more desperate pathetic efforts to enliven the market , which I think they already know will experience even greater collapses in the next six months from October. There will also a few more Estate Agents going down the Suwanee as well.

I can afford to buy a mortgage free property but am waiting for an extra 25% drop at least. I want more surplus ££££ to enjoy my life with but it seems there is surplus of thick people on this island who want a big mortgage so they cannot enjoy life.

I have a few friends who can also buy without mortgage and they think the same way.

i agree i'm waiting just like you and know of a few others with the same idea

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