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Nutty

If Prices Dont Fall Over This Winter You May Forget It

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Even with all the negative stories the past few months the markets are holding up incredibly well. The FTSE in particular has had a strong recovery since the stories of double dip and house prices faltering. If the Tory cuts do not have the desired effect, well at least from this forums point of view then you may all forget about the price of houses crashing for another 3-5 years when the next disaster happens (or when they in power mess up again)

I do however think that the cuts in scotland will have an impact on the economy but to what scale, well nobody knows.Will it knock 10-20% off the price of houses ? Highly unlikely, it is likely that over the year things will broadly have remained flat which lets face is not such a bad position to be in coming off the back of a recession and all the talk of double dip and bad jobs data from here and abroad. So this winter is the key time with all the ingredients there to push the economy back into recession but if not then its back to talk of rising house prices and how smug we all feel to be on the ladder to the stratosphere and beyond.

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The game is over IMO. House prices have been falling for years, well the vast majority that have been selling anyway. They are continuing to fall and people are definitely getting a little feared...

Most people now understand this. Not just people who read this forum. But the general public, the Banks, the politicans, even Estate Agents. There is only a small clutch of VI's left who I think truly believe what they say in regard to price drops being over.

Of course, as always, there may be small exceptions to this here and there is specific little areas of the UK. However they are going to be the exception rather than the rule. The chance of any of these exceptions being in Scotland ? Very slim IMO.

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Even with all the negative stories the past few months the markets are holding up incredibly well.

Sorry but that is the wrong way to see it.

You don't really think that "the market" will suddenly become a singular enlightened body & declare "oh dear, we are not being realistic, we must cut by 40%", do you?

Out of paper money, & sitting out the long grind down is where it's at for quite a few years

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Now they are bouncing up so one must conclude the economy is doing better. I'm no economist but surely a strong financial market is a positive sign for an economy ?

Not always. It can indicate a weakening of the currency used to buy the shares (i.e. GBP) as investors will look to move their money into somewhere which will hold value better than a devaluing currency.

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So this winter is the key time with all the ingredients there to push the economy back into recession.....

Welcome to this site. I was recently thinking how we don't have many bulls around here at the moment.

I think this winter will be another step down but not the "go/no-go" you think. The drop in house prices continues to be drawn out - so we might not get a "crash" but we may well get a significant "fall". Housepricefall.co.uk or housepricedeflation.co.uk don't have the same ring! So don't think we all believe it's going to happen overnight and result in houses being sold for 50p. We aren't as bad as some on MSE etc make out.

Consider two things: 1) Sentiment - definitely turning, with much of the MSM now reporting the end of HPI, yes even in Scotland. Sentiment affects how likely people are to make large purchases and how much they think the item is worth. 2) Fundamentals - e.g. rising unemployment only to get worse in Scotland with something like 25% of the workforce in the public sector, the end of the SLS etc. This will affect people's access to money and their ability to pay it back, which results in less money in the market.

House prices have become an unhealthily large component of the UK economy. We need to start making things other people want to buy and provide services which are of some real use, not buy and sell houses to each other at exponentially rising prices. If we don't wise up and change, there will be dark days ahead.

Markets always correct, there has never been a bubble which hasn't eventually burst.

Have a thorough look around here - there's a lot of good information. You might even find your bullish position changes.

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The FTSE, still well down on it's peak 11 years ago, is likely to perform strongly over the next few years. Greedy money from the parisites who got into BTL early will be part of the inflow chasing it up. Of course I will probably be wrong, especially if I buy shares.

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Nutty, would you please correct your quoting error in your second post. Thxs :)

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Thxs for the fix doccy .

BTW I hadn't put any weight on his opinion :D

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I think this winter will be another step down but not the "go/no-go" you think. The drop in house prices continues to be drawn out - so we might not get a "crash" but we may well get a significant "fall". Housepricefall.co.uk or housepricedeflation.co.uk don't have the same ring! So don't think we all believe it's going to happen overnight and result in houses being sold for 50p. We aren't as bad as some on MSE etc make out.

Consider two things: 1) Sentiment - definitely turning, with much of the MSM now reporting the end of HPI, yes even in Scotland. Sentiment affects how likely people are to make large purchases and how much they think the item is worth. 2) Fundamentals - e.g. rising unemployment only to get worse in Scotland with something like 25% of the workforce in the public sector, the end of the SLS etc. This will affect people's access to money and their ability to pay it back, which results in less money in the market.

I agree wholehertedly with these comments BUT am concerned that prices will stabilise because IRs are still so low. There are many more houses out there for sale (visible in my area from the increase in EA boards) but few priced reasonably. Now HIPs have gone, lots of 'sellers' are testing 2007 prices in the knowledge that they don't have to sell if they don't like the offers they receive. The rise in prices earlier this year was caused by people refusing to sell below peak and I dont see that much has changed since then to alter that.

Yes unemployment will rise and may hit 10%. That's still leaves 90% of people who wont be affected. A rise in interest rates to much above 3% is going to affect many more who have bought in the last few years, but I don't see that any time soon. The whole system seems stacked against anything but a very gradual glide down in real terms over the next five years.

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The rise in prices earlier this year was caused by people refusing to sell below peak and I dont see that much has changed since then to alter that.

Don't forget the volume of sales - this is much lower than circa 2008. The average selling price has been maintained by the low numbers of FTB's.

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I agree wholehertedly with these comments BUT am concerned that prices will stabilise because IRs are still so low. There are many more houses out there for sale (visible in my area from the increase in EA boards) but few priced reasonably. Now HIPs have gone, lots of 'sellers' are testing 2007 prices in the knowledge that they don't have to sell if they don't like the offers they receive. The rise in prices earlier this year was caused by people refusing to sell below peak and I dont see that much has changed since then to alter that.

Yes unemployment will rise and may hit 10%. That's still leaves 90% of people who wont be affected. A rise in interest rates to much above 3% is going to affect many more who have bought in the last few years, but I don't see that any time soon. The whole system seems stacked against anything but a very gradual glide down in real terms over the next five years.

I would go with that but I also see nominal price falls too. They have already happened and are happening as we speak. Not many, but enough to worry other sellers IMO. Especially in FTB areas.

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Interesting discussion, not least because I've been thinking lately what a buy signal in the property market would look like since I'm selling up in the UK and looking at other markets to buy into.

From my understanding there are only two factors that effect house prices: effective demand in the form of equilibrium in the labour market, i.e. falling unemployment, and supply in the form of expansion of the credit supply by banks, i.e. looser lending practices. The problem for a punter like me is that there isn't a direct measure of the latter, so we need to try and get a qualitative idea of the behaviour of the banks. Here's my ill-informed take; the banks are in a psychotic position, their deposits are up but they can't trust their existing or new customers to be reliable creditors so they don't want to lend, yet because they lent at the market valuations leading up to the crash choking off the credit supply will worsen the bad debts in their loans books. Further, there is political and economic pressure on them to increase the broad money supply through credit expansion letting the government and public inflate their way out of debt, yet weakening the bank's cash positions. Basically they're f****d, and would be better off sitting on their customer's deposits, lending it to no one and letting the mugs with existing debts to work off their debt bondage as best they can.

Thoughts, anyone?

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I don't think newbies can edit so I have removed the post and he can re- post it. I think anyway that "Nutty" is an old poster on here that has been banned several times before so don't put much weight in his opinion.

Spamish?

He's pretty busy on MSE. Almost 6000 posts since he was put on mod watch for trolling.

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  • 277 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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