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Boom Mentality Returning


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So, I was getting a little hacked off with the current state of the housing market as it seems the government has managed to prop up the pyramid.

A house came up for sale in my village (outside Bath) last week which was a bit of a wreck and needed a complete refurb with scope to extend from three to four bedrooms. As a possible hedge against both HPI and HPC with this property, I decided to have a look around it last week. It was indeed a wreck but reasonably priced so I decided to go and have a think for a week whilst on holiday in Cornwall.

I returned today to book a second viewing to find that there had been 3 cash offers, one of which was around 20% above the asking price, and that they were taking no more viewings or offers.

So, it seems the mentality that led to the boom is returning, and there are plenty of parasitic BTLs/"developers" around to take up the affordable properties and keep prices inflated, and even inflate them up and beyond 2007 prices.

Anything coming onto the market that is reasonably priced is selling fast and I just cant see things changing anytime soon. Low interest rates are here to stay, allowing people to remain in their houses even if they are in financial difficulties.

I'm now bullish on British property and looking to leave as I cant see FTBers ever getting anything reasonable, even with a Tory government and its slightly more realistic policies.

The problem is the Wheel, the housing market is like a huge wheel the crash not only stopped the wheel it sent it spinning backwards :lol:

This has been going backwards for best part of 2 years :lol: in the last 5 months first the wheel stopped :( now it has started spinning in the normal direction again very slowly but none the less gong north :angry:

This has been caused by an increase in buyers buying stuff that has been kicking around for years advised by EAs to submit overinflated offers :angry:

All of a sudden sellers with who had lost all hope and were in despair :lol: to get there houses sold :angry: resulting in them having a short window to buy hence the wheel effect :blink:

This wheel will now gather pace as its self propelling :( come next Spring with the election pending and QE Taking hold the bounce will take us past peak bubble as the wheel spins out of control :o

Edited by dunedin
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The problem is the Wheel, the housing market is like a huge wheel the crash not only stopped the wheel it sent it spinning backwards :lol:

This has been going backwards for best part of 2 years :lol: in the last 5 months first the wheel stopped :( now it has started spinning in the normal direction again very slowly but none the less gong north :angry:

This has been caused by an increase in buyers buying stuff that has been kicking around for years advised by EAs to submit overinflated offers :angry:

All of a sudden sellers with who had lost all hope and were in despair :lol: to get there houses sold :angry: resulting in them having a short window to buy hence the wheel effect :blink:

This wheel will now gather pace as its self propelling :( come next Spring with the election pending and QE Taking hold the bounce will take us past peak bubble as the wheel spins out of control :o

That's a "wheely" good theory you've got there mate - but do you not feel it's just going round in circles...???

Maybe it's getting a little "tyred"...

(tyre, tired - see what I did there...!!!)

Oh suit yourselves...

XYY

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This is good news.

I think this will be the trend in most des res areas now.

It's good for both sides at the moment. If you are happy to live in a cheaper area prices have come down a bit and those who are happy to pay more get to live in a nicer area.

Win win really. I did say house prices in good areas didn't drop. Looks like I was right.

here a the time on market figures for my place in Cheshire and it a good area.........someone try and tell me these figures are not bad..

No. of properties Average ToM*

under £100,000 119 226 days

£100,000 to £200,000 425 239 days

£200,000 to £300,000 108 314 days

£300,000 to £400,000 29 349 days

£400,000 to £500,000 7 278 days

£500,000 to £1,000,000 4 194 days

over £1,000,000 0 -

http://www.home.co.uk/

Edited by geoffk
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"boom mentality returning"?

i really don't see it.

how do you know that this place went for 20% above asking? did an estate agent tell you?

speculative bubbles just don't burst and then leap back two years later. maybe if wage inflation kicks off, but until then...

Why should speculative bubbles correlate with wage inflation? An inverse relationship is much more plausible IMO.

The speculators have to make their money somehow in the short term.

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This is good news.

I think this will be the trend in most des res areas now.

It's good for both sides at the moment. If you are happy to live in a cheaper area prices have come down a bit and those who are happy to pay more get to live in a nicer area.

Win win really. I did say house prices in good areas didn't drop. Looks like I was right.

I want to see this trend. Right now the Barclays mortgage calculator will give you £150k if you earn £50k pa ... so this trend is going to dive soon ...

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Which street is this? I would like to buy one, if I can get it for 300 I could remarket straight away and get 335 or at the rate they are rising I could get nearer 400.

You shouldn't joke about this. I'm a couple of weeks away from moving into a new place and the vendor's estate agent said he would happily re-market the place [for us] for at least 10% more than our purchase price. Yes, this really is the state of the market now. How sustainable this is, is another matter, but this is what it's all about now.

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If that's the case if I was selling (and hadn't exchanged) I would get you to pay more as that is now the going rate.

They're divorcing. They have no mortgage, and they both want out ASAP.

If this weren't the case then I expect that they would have told us to do one already.

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This is a slow burner. True, things are going up now and it wasn't like this in 1990. It is different. Rates are low and will remain so for the forseeable future...at least until the bond markets get twitchy about UK debts...but things are really f03ked this time and, whilst the streets are not littered with for sale signs, the artificial props are just that...artificial. Don't know how old you are Dr R, but I wouldn't be hoping for much from Spotty and Dave. Thatch started all this a long long time ago in a fairly pleasant land...

This isn't the pros buying. This is the last of the lucky bastards who made money whilst mostly being thick as pigsh!t. Right place right time crowd. Once they are shaken out, even if rates stay low then game over and let the true crash begin.

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You shouldn't joke about this. I'm a couple of weeks away from moving into a new place and the vendor's estate agent said he would happily re-market the place [for us] for at least 10% more than our purchase price. Yes, this really is the state of the market now. How sustainable this is, is another matter, but this is what it's all about now.

you appear to be quoting an estate agent saying that demand is buoyant, prices skyrocketing in a way that suggests that such a pronouncement would have an element of credibility.

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Guest joeschmo
you appear to be quoting an estate agent saying that demand is buoyant, prices skyrocketing in a way that suggests that such a pronouncement would have an element of credibility.

Seriously you have to see what is happening in Brighton the believe it...asking prices are back to 2007 peak in most cases :(

Edited by joeschmo
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One thing I noticed in GC1, was that while most houses fell in price, one or two sellers would be very lucky indeed.

75,000 houses are selling every month, many without mortgages.

many people cant get mortgages when they apply. thats not stopping others getting mortgages.

stories like this are going to be heard at all times of the crash. they will be heard on the rise too.

Im hearing things are back to normal. this tells me that the bull trap is present as always. markets change...people dont.

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Seems to be a lot of fuss about one house in one area that came on to the market under valued and got sold at a better price.

A house I looked at nearly 2 years ago was on the market for £880,000 (God knows why I looked at it theres no way I could have afforded it) its now on the market for £550,000. Thats a better example of whats going on at the moment.

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Guest pioneer31
So, I was getting a little hacked off with the current state of the housing market as it seems the government has managed to prop up the pyramid.

A house came up for sale in my village (outside Bath) last week which was a bit of a wreck and needed a complete refurb with scope to extend from three to four bedrooms. As a possible hedge against both HPI and HPC with this property, I decided to have a look around it last week. It was indeed a wreck but reasonably priced so I decided to go and have a think for a week whilst on holiday in Cornwall.

I returned today to book a second viewing to find that there had been 3 cash offers, one of which was around 20% above the asking price, and that they were taking no more viewings or offers.

So, it seems the mentality that led to the boom is returning, and there are plenty of parasitic BTLs/"developers" around to take up the affordable properties and keep prices inflated, and even inflate them up and beyond 2007 prices.

Anything coming onto the market that is reasonably priced is selling fast and I just cant see things changing anytime soon. Low interest rates are here to stay, allowing people to remain in their houses even if they are in financial difficulties.

I'm now bullish on British property and looking to leave as I cant see FTBers ever getting anything reasonable, even with a Tory government and its slightly more realistic policies.

Any way of verifying this?

After all Estate Agents are notoriously honest.

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I really do think last days of rome...

they simply cannot afford another debt boom, I think a lot has to do with the type of property. If you were expecting that little chocolate box thatched cottage in the cotswolds at 50% off, think again, was never going to happen. These properties have always been unreachable by the masses. I can see lots of price reductions still in my area for properties that actually are quite nice, just not jawdroppingly nice.

Me, I am buying some farmland next year, pre-election. I have concluded the only way the tories can start to go and sort out this sorry mess is approval of building on areas that were previously considered no-go to development. If the allah wont go to the mountain, the mountain shall come to allah!

I believe the saying refers to Mohammad, not Allah. Mohammad was the 'prophet'; Allah is the God moslems believe in.

http://www.phrases.org.uk/bulletin_board/3...ssages/362.html

I don't agree with your analysis. I suspect you are a bull. I agree with 'non frog'. Good post, non frog, imo.

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No, it's the figure I WANT not need.

I'll walk away with £100k profit from an investment house. That will look nice sitting in my bank. :D

Sibley you just do not get it do you.

You have been on this site long enough to understand the peak of the market was 2007 in real terms, any changes in prices now will be nominal at best. If you walk away with 100K in a couple years time because house price have returned to your desired level the money you have taken out will very likely only be worth what it was at the 2 year nominal nadir (had you sold at a lower price and taken a smaller profit) possibly even less. We are entering the very interesting phase of the crash, when the bond market decides we really are going to get a crack up boom this is when the fun starts. There is no such thing as a free lunch.

You can not win now, you should have taken your money out in 2007 and put it to work elsewhere, property real gains have gone and will be gone for a long while. My personal view is it is very likely we hit peak real house price in 2007 that wont be achieved in my lifetime. The only way they can beat the real house price peak is to increase the mortgage multiples further than the absurd levels reached, something I can not see them doing.

House prices are a function of lending, the more lax the lending is the higher the prices. This is why despite all the political posturing they know they can not force traditional multiple on this market without it returning to traditional values so this is why it was so important for the government to take control of the banks in order to stop the crash. With the current government in charge they have been able to maintain the very high multiples that everyone knows caused the crisis, but with the tax payer backstopping these mortgages they can continue to lend in this way. Hopefully their aim is to wean the market of these irresponsible ratios but only time will tell on that one.

Edited by Confounded
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  • 433 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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