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jones87

So Is This It Then? The Moment We Have All Been Waiting For Fast Approaching?

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For years I have browsed this forum, as a young 'potential' FTB carefully watching the market and becoming slightly obsessed too.

I was gutted to see HPI back again this year, but what with the Spending Review, Interest Rate Rises in the future, food/fuel prices and a prolonged decreasing/flat economy. I think I can actually say I'm 95% sure we will now see YoY falls in house prices.

I just want to live in a house that I own, with a 10 year mortgage (overpaying), so eventually my biggest outgoing (rent or mortgage) will disappear.

Looking forward to it B) We will look back on this decade and think WHAT THE F***

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Some of those who started reading this forum when they were young have aged considerably while waiting for a HPC!

The only barrier I see to a crash is the low level of interest rates. It could be a slow grind down, so that by 2020 prices in nominal terms are the same. Sellers wont feel that they are losing value (even though in real terms they have). I will say though that this scenario is dependent on salaries rising in real terms and I don't see much evidence of that at the moment.

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I just want to live in a house that I own, with a 10 year mortgage (overpaying), so eventually my biggest outgoing (rent or mortgage) will disappear.

Don't ask for much do you?

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Some of those who started reading this forum when they were young have aged considerably while waiting for a HPC!

The only barrier I see to a crash is the low level of interest rates. It could be a slow grind down, so that by 2020 prices in nominal terms are the same. Sellers wont feel that they are losing value (even though in real terms they have). I will say though that this scenario is dependent on salaries rising in real terms and I don't see much evidence of that at the moment.

I think this is their plan, to keep everything stable so in the future house prices have not nominaly risen/fallen substantially but have become more affordable and some of the outstanding debt repaid. Rising wages will see rising interest rates i suspect, so i would have thought they are happy not to see inflation pushed by rising salaries for as long as possible.

If inflation is imported they can blame 'other factors' and not use it as an excuse to raise IR.

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Some of those who started reading this forum when they were young have aged considerably while waiting for a HPC!

The only barrier I see to a crash is the low level of interest rates. It could be a slow grind down, so that by 2020 prices in nominal terms are the same. Sellers wont feel that they are losing value (even though in real terms they have). I will say though that this scenario is dependent on salaries rising in real terms and I don't see much evidence of that at the moment.

yep, I suspect it will be a combination of nominal and inflation-hidden falls, but if your wealth elsewhere is inflation-protected then that is real to you, and the sheeple will not quite understand why they are so poor

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I think this is their plan, to keep everything stable so in the future house prices have not nominaly risen/fallen substantially but have become more affordable and some of the outstanding debt repaid. Rising wages will see rising interest rates i suspect, so i would have thought they are happy not to see inflation pushed by rising salaries for as long as possible.

If inflation is imported they can blame 'other factors' and not use it as an excuse to raise IR.

of course this does mean that cash savings will be severely devalued, but this is equally the responsibility of those affected to have been more pro-active

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of course this does mean that cash savings will be severely devalued, but this is equally the responsibility of those affected to have been more pro-active

I would have thought their opinion of the GBP was made pretty clear by QE1,.....QE2....QEX.

"Cash Smash". Spend it or lose it! seems to ring true in may ways over the last decade.

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Another thought - high IRs brought about the end of the late 80s bubble. We're expecting IRs to stay low here for a while and so predict that history wont be repeated. However, I don't think lending in the 80s got anywhere as ridiculous as it did in the last decade. Will the removal of 125% and liars' loans be the cause of a similar correction this time?

With high IRs, buyers can't serve the loans they have taken out. They then default and the property becomes a repo. Lots of people in this situation means house prices take a tumble due to over supply.

With mortgage lending declining, buyers can only afford to buy from those who equally must sell (through debt, death and divorce). However, it is these actual transactions, rather than stubborn vendors, setting the market price. House prices take a corresponding tumble.

Does that seem logical?

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What's crucial is the rate of forced sales. Forced sales from interest rate rises may still be some way off, however, forced sales as a result of job losses, increasing rates of part-time work, rising prices and low wage settlements will begin to make themselves felt over the next couple of years and at that point I'm expecting sudden and drastic falls. :)

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Don't ask for much do you?

In a sane world, that is not much to ask for.

Dig some strip foundations, fill them with concrete. Lay a couple of rows of blocks up to ground floor level, dig some trenches and stick in some drains and cucts for services. Lay some pre-stressed concrete beams across the blocks and infill them with concrete blocks. You now have your ground floor. Put up two lifts of brickwork and blockwork - install first floor joists. Take brickwork and blockwork up to plate. Stick trussed rafters across from one side to the other. Cover the rafters with felt and battens and add roof tiles.

Do first fix carpentry, plumbing and electrics. Install windows and door frames. Tack the ceilings. Plaster throughout. Second fix joinery, plumbing and electrics and decorate.

It's not fecking rocket science and the materials and labour is not that expensive.

Yet, somehow, by some weird twist of fate from invisible powers - most of us spend most of our lives paying bankers interest to live in a poxy shoe box.

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What's crucial is the rate of forced sales. Forced sales from interest rate rises may still be some way off, however, forced sales as a result of job losses, increasing rates of part-time work, rising prices and low wage settlements will begin to make themselves felt over the next couple of years and at that point I'm expecting sudden and drastic falls. :)

Why? The odd forced sale won't cause drastic falls.

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Another thought - high IRs brought about the end of the late 80s bubble. We're expecting IRs to stay low here for a while and so predict that history wont be repeated. However, I don't think lending in the 80s got anywhere as ridiculous as it did in the last decade. Will the removal of 125% and liars' loans be the cause of a similar correction this time?

With high IRs, buyers can't serve the loans they have taken out. They then default and the property becomes a repo. Lots of people in this situation means house prices take a tumble due to over supply.

With mortgage lending declining, buyers can only afford to buy from those who equally must sell (through debt, death and divorce). However, it is these actual transactions, rather than stubborn vendors, setting the market price. House prices take a corresponding tumble.

Does that seem logical?

Curtailing the lending will force prices down. Eventually.

Significant rises in I.R's will make house prices fall very quickly.

Currently there don't seem enough forced sellers to significantly reduce prices (in my area, SE M4 Corridor).

There was a thread about your last paragraph recently which was 'hotly' disputed. The people who sell and buy are the market, those with fantasy asking prices are not selling so are not in the market and don't have an affect on price.

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I would have thought their opinion of the GBP was made pretty clear by QE1,.....QE2....QEX.

"Cash Smash". Spend it or lose it! seems to ring true in may ways over the last decade.

Which is fine if everyones wages go up,

But last time the pound was trashed, fuel goes up, food goes up, demand destruction occurs, and everyone has less to spend on a house.

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Another thought - high IRs brought about the end of the late 80s bubble. We're expecting IRs to stay low here for a while and so predict that history wont be repeated. However, I don't think lending in the 80s got anywhere as ridiculous as it did in the last decade. Will the removal of 125% and liars' loans be the cause of a similar correction this time?

Not true. The removal of joint tax relief on mortgages was the catalyst for the last bust. House prices were driven up by the usual culprits - the banksters and loose lending - and a feeding frenzy caused by an idiotic chancellor flagging up 6 months in advance that joint tax relief was to be removed. Every potential FTB linked up with anyone, brother, sister, mate, mate of a mate - to get their foot on the ladder before the tax relief was removed. On the day of removal (think it was July 31st 2008) the market came to a standstill overnight. Suddenly there were NO FTBs and, as a result, the market crashed. Nothing to do with IRs - we were used to high IRs. I was paying 14.25% on my mortgage in 1985.

I think it's true to say that this market bears little resemblance now with the market in the late 80s/early 90s.

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There was a thread about your last paragraph recently which was 'hotly' disputed. The people who sell and buy are the market, those with fantasy asking prices are not selling so are not in the market and don't have an affect on price.

But they DO! If you are buying and want a 4 bed detached house - and there are 20 of them on the market in your locality - and they are all aspirationally priced at 500k - you start thinking 'I'll need 500k to buy a 4 bed detached house in this area'. You don't think - they are all 100k overpriced and I just need to wait until someone sees sense.

What happens is that of the 20 on the market maybe one, just one, really wants or needs to sell. And he will go down 5, or 10k at a time until someone thinks 'that one is now 475k - I'll offer 465k and get a bargain!'

That is how the market works - which is why you never get really dramatic falls. It's just a drip, drip, drip of falls on the way down whereas in a rising market prices jump in leaps and bounds.

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But they DO! If you are buying and want a 4 bed detached house - and there are 20 of them on the market in your locality - and they are all aspirationally priced at 500k - you start thinking 'I'll need 500k to buy a 4 bed detached house in this area'. You don't think - they are all 100k overpriced and I just need to wait until someone sees sense.

What happens is that of the 20 on the market maybe one, just one, really wants or needs to sell. And he will go down 5, or 10k at a time until someone thinks 'that one is now 475k - I'll offer 465k and get a bargain!'

That is how the market works - which is why you never get really dramatic falls. It's just a drip, drip, drip of falls on the way down whereas in a rising market prices jump in leaps and bounds.

I'm not expecting prices to bottom out for a few years yet. Perhaps when the '£500K house' is on the market for £350k I'll put in an offer of £275K. Until then, I'll keep renting.

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In a sane world, that is not much to ask for.

Dig some strip foundations, fill them with concrete. Lay a couple of rows of blocks up to ground floor level, dig some trenches and stick in some drains and cucts for services. Lay some pre-stressed concrete beams across the blocks and infill them with concrete blocks. You now have your ground floor. Put up two lifts of brickwork and blockwork - install first floor joists. Take brickwork and blockwork up to plate. Stick trussed rafters across from one side to the other. Cover the rafters with felt and battens and add roof tiles.

Do first fix carpentry, plumbing and electrics. Install windows and door frames. Tack the ceilings. Plaster throughout. Second fix joinery, plumbing and electrics and decorate.

It's not fecking rocket science and the materials and labour is not that expensive.

Yet, somehow, by some weird twist of fate from invisible powers - most of us spend most of our lives paying bankers interest to live in a poxy shoe box.

you, my paduwan student, have failed to see the power of the force that is...twigs in the hallway, and the dark power known as..fresh baking bread...

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In a sane world, that is not much to ask for.

Dig some strip foundations, fill them with concrete. Lay a couple of rows of blocks up to ground floor level, dig some trenches and stick in some drains and cucts for services. Lay some pre-stressed concrete beams across the blocks and infill them with concrete blocks. You now have your ground floor. Put up two lifts of brickwork and blockwork - install first floor joists. Take brickwork and blockwork up to plate. Stick trussed rafters across from one side to the other. Cover the rafters with felt and battens and add roof tiles.

Do first fix carpentry, plumbing and electrics. Install windows and door frames. Tack the ceilings. Plaster throughout. Second fix joinery, plumbing and electrics and decorate.

It's not fecking rocket science and the materials and labour is not that expensive.

Yet, somehow, by some weird twist of fate from invisible powers - most of us spend most of our lives paying bankers interest to live in a poxy shoe box.

You've just described the talented construction professionals of the Dominican Republic perfectly, but I think the OP was talking about the UK.

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But they DO! If you are buying and want a 4 bed detached house - and there are 20 of them on the market in your locality - and they are all aspirationally priced at 500k - you start thinking 'I'll need 500k to buy a 4 bed detached house in this area'. You don't think - they are all 100k overpriced and I just need to wait until someone sees sense.

What happens is that of the 20 on the market maybe one, just one, really wants or needs to sell. And he will go down 5, or 10k at a time until someone thinks 'that one is now 475k - I'll offer 465k and get a bargain!'

That is how the market works - which is why you never get really dramatic falls. It's just a drip, drip, drip of falls on the way down whereas in a rising market prices jump in leaps and bounds.

homepage.png

This is clearly pap, you only need to look at that graph to realise its pap, notwithstanding that bear markets are always quicker than bull markets in all asset classes, mainly due to fear/panic being a stronger human emotion than greed/pleasure (most bear markets last about 1 to 2 thirds as long as the preceeding bull market, your analysis is no different to Level 2 Data in equities, Level 2 is full of bids and offer that are completely outside the market compared to buy/sale price, they remain so until the market moves up or down to these values but they have little effect on the actual transaction price formed in the market.

The price falls in 2007 /8 look fairly dramatic to me and noticeably steeper than the preceeding bull market, the current 18 month rally is directly symmetrical to the 18 month pause step that took place in 04/05. Symmetry is nearly always presents in markets (which is why H&S and Double tops and a myriad of other formations are so prevalent in technical analysis , its just as you have done people tend to fail to do proper analysis and get carried away by the moment and current conditions at any point in time (the exact human failing that causes bubbles and crashes)

Edited by Tamara De Lempicka

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You all wanted a house price crash, but all you got was this lousy global financial armageddon.

You all wanted a house price crash, but all you got was higher taxes, someone else's debt, and a higher chance of losing your job.

Yay!

:angry:

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I was to sellotape this chart to every estate agents window in the country, with the words DON'T BUY NOW underneath.

homepage.png

But why not? Its back on the average trend line...

Next stop, the MOON!

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  • 261 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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