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thefruits

Key To Popping The Hpc Bubble

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Can't see HPC in the terms that many regulars want here simply because

1) 46% of UK households have no mortgage - hence no need to sell

2) Argument for house price based on average income is flawed ... no such thing as national average wage or house price

3) No desire to lift interest rates meanwhile those with mortgages (and repayment terms - there are alot of them) are building more equity

So what is going to bring a leafy 4 bedroomed detached house in Surrey back to say £150k from the current £600k

Only one way for me... reduction of Income Tax to flat 20% on all earnings and a wealth tax of 1% of all global assets per year. I think that ought to sort out the market pdq and start to address the intergenerational imbalance sharpish.

Also would allow estate agents and HIPS evaluators to earn a crust revaluing houses each year on behalf of the govt. May not be such a drive from OO's to see the value of their properties inflate so wildly

Do you think it would fly ?

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1) 46% of UK households have no mortgage - hence no need to sell

Where did you get that from?

So 46% of people can drop the price 90% if they want to move.

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Can't see HPC in the terms that many regulars want here simply because

1) 46% of UK households have no mortgage - hence no need to sell

People who own outright often need to sell for a dozen reasons:

Can't afford upkeep, so downsize.

Job move

Poor health, so need smaller, more manageable or ground floor level home.

Move into residential care, sheltered housing or move in with children

Potless, so downsize to access cash

Want to hand money to kids or grandkids now (to avoid later Inheritance Tax)

Want to be nearer grown up children

and more

Edited by juvenal

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People who own outright often need to sell for a dozen reasons:

Can't afford upkeep, so downsize.

Job move

Poor health, so need smaller, more manageable or ground floor level home.

Move into residential care, sheltered housing or move in with children

Potless, so downsize to access cash

Want to hand money to grandkids now (to avoid later Inheritance Tax)

Want to be nearer grown up children

and more

Can't argue with this but to me you've identified a possible reason why we might find distressed sellers. But in sufficient quantities to kill HPI and set off a HPC ? The amount of equity in households and the willingness to trade out of stocks & shares and into bricks and mortar still suggest to me that we're still looking at tiny price drops instead of the 75% needed to get to my £150k target.

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Where did you get that from?

So 46% of people can drop the price 90% if they want to move.

alternatively 46% of people (around 10m households) can sit and do jack s&it at very little cost.

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Can't see HPC in the terms that many regulars want here simply because

1) 46% of UK households have no mortgage - hence no need to sell

2) Argument for house price based on average income is flawed ... no such thing as national average wage or house price

3) No desire to lift interest rates meanwhile those with mortgages (and repayment terms - there are alot of them) are building more equity

So what is going to bring a leafy 4 bedroomed detached house in Surrey back to say £150k from the current £600k

Only one way for me... reduction of Income Tax to flat 20% on all earnings and a wealth tax of 1% of all global assets per year. I think that ought to sort out the market pdq and start to address the intergenerational imbalance sharpish.

Also would allow estate agents and HIPS evaluators to earn a crust revaluing houses each year on behalf of the govt. May not be such a drive from OO's to see the value of their properties inflate so wildly

Do you think it would fly ?

Some of what you say may be true. But actually there is strong evidence to suggest that it is precisely that 46% that are going to have a direct effect on the prices coming down. Baby boomers. They have had a dramatic effect on every aspect of western civilization, when they were born, the hospitals could npt cope. When they went to shool there was a shortage of teachers (such was the need). When the went to work and earned money the economy boomed, when they were ready to buy houses there was a house build bonanza. And here's the interesting bit. A lot of them now will want to sell, a lot of them. For various reasons, a desire/need to downsize, a desire to move abroad/to the country, to finance health care etc and as always they do it en masse (as they have with everything) and the effect will be dramatic. They will flood the market with houses and it will have an even more detrimental effect on prices. btw read beckman's "housequake" he has been predicting this for years.

Just a thought...

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alternatively 46% of people (around 10m households) can sit and do jack s&it at very little cost.

These people are the ones who will help HPC along. They are still subject to death on divorce etc but have no mortgage to cover so will reduce to sell.

It's the ones who won't reduce due to the mortgage or needing equity for the next purchase who will hold it back.

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Can't see HPC in the terms that many regulars want here simply because

1) 46% of UK households have no mortgage - hence no need to sell

Haven't you got it back to front here?

Surely it is exactly those people (and those who bought before 2001-2 i.e. who have significant equity) who

will be willing and able to reduce prices in order to have a quick sale even in the current zero interest rate regime.

I'm imagining that they will be the 'trigger' for hpc.

People who bought at the height of the bubble will only sell if they are forced to by e.g. job loss or interest rate rises

since they would be in significant negative equity.

I seem to recall that is what happened during the last crash. Some relatives of mine had to wait almost a decade to get out of NE.

DTM

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Some of what you say may be true. But actually there is strong evidence to suggest that it is precisely that 46% that are going to have a direct effect on the prices coming down. Baby boomers. They have had a dramatic effect on every aspect of western civilization, when they were born, the hospitals could npt cope. When they went to shool there was a shortage of teachers (such was the need). When the went to work and earned money the economy boomed, when they were ready to buy houses there was a house build bonanza. And here's the interesting bit. A lot of them now will want to sell, a lot of them. For various reasons, a desire/need to downsize, a desire to move abroad/to the country, to finance health care etc and as always they do it en masse (as they have with everything) and the effect will be dramatic. They will flood the market with houses and it will have an even more detrimental effect on prices. btw read beckman's "housequake" he has been predicting this for years.

Just a thought...

A bit late. We've already gone :lol: . The bb's left in the UK are the materialistic yuppie fkwt boomer variety who didn't have a plan.

edit:

They have had a dramatic effect on every aspect of western civilization, when they were born, the hospitals could npt cope :lol::lol::lol::lol:

Now i've seen everything. Boomers to blame for their mum's getting up the duff. Unbelievable.

Edited by campervanman

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Haven't you got it back to front here?

Surely it is exactly those people (and those who bought before 2001-2 i.e. who have significant equity) who

will be willing and able to reduce prices in order to have a quick sale even in the current zero interest rate regime.

I'm imagining that they will be the 'trigger' for hpc.

People who bought at the height of the bubble will only sell if they are forced to by e.g. job loss or interest rate rises

since they would be in significant negative equity.

I seem to recall that is what happened during the last crash. Some relatives of mine had to wait almost a decade to get out of NE.

DTM

Perhaps but surely they are possibly in a better position to choose when to bail out, whereas surely a crash demands mass movements towards the exits. An orderly exit over the next decade is hardly going to deliver the resulting 75% falls HPC's are calling for is it ? Pandaemonium and hysteria ala Ireland and the US are being called for but it hasn't come yet despite Global Financial Crisis. If that didn't work what will ?

Still think a fundamental change to the tax regime as outlined in the opening post is the only hope for HPC regulars.

Edited by thefruits

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Can't argue with this but to me you've identified a possible reason why we might find distressed sellers. But in sufficient quantities to kill HPI and set off a HPC ? The amount of equity in households and the willingness to trade out of stocks & shares and into bricks and mortar still suggest to me that we're still looking at tiny price drops instead of the 75% needed to get to my £150k target.

No - you're right that there isn't enough to set off a HPC. I see the same slow, but steady downward movement in prices over the next 3-4 years as I think you do.

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  • 259 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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