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After The Prophesied House Prices Crash..

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Need some insight here. I hear a lot of talk on here from house price crash posters who say that the increased costs of housing makes the standard of living cost so high in the UK. I would like to think there is a correlation between the two things and that the UK will be more affordable and generally great, when house prices drop, but is this really going to happen?

Clearly all countries are different and can't be compared like for like, but In other countries which have experienced house price crashes, have they had a drop in the cost of living?

Can anyone explain to me how this would transpire in the UK.

Would it be something like this:-

-Interest Rates go up

-People cant afford to pay their mortgages after a few months

-House Prices Crash 6 months later

-Wide spread job loses in both sectors unemployment hits 3m+

-More 'misery' House prices drop further

-More people get into debt become unemployed.

-Foreclosures like the USA.

-Cost of renting drops due to desperation of landlords=aforementioned cost of living drops at some future date for renters??/b]

In a scenario like this we still face at best:-

-Still difficult to get a mortgage only the rich and outright buyers can get one. Banks restrict lending to all.

-Things/tat/necessities imported in from overseas will still be expensive. And what don't we import?

-Hard to get any job, massive unemployment.

etc, etc, etc.

-Everyone is still knackered.

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We may well get a deflationary style HPC, but the cost of living of everything else will continue to rise.

Personally I see house prices crashing a lot more in real terms than in nominal terms. Sure we may get 10-15% off nominally but the crash is being drawn out through government intervention and negative rates.

I see a 30-50% crash over a period of 5-7 (possibly 10 years). This will play out like Germany in the 90s, where nominal prices only fell 10% but in real terms property was 50% cheaper a decade later.

It will be a long time until prices bottom.

With regards to everything else, prices will continue to rise for goods and basic staples. We are living through a SECULAR commodity supercycle. This is highly inflationary.

Living standards will fall as people spend more and more discretionary spending on basic goods.

The deflationists who think everything will get cheaper are delusional.

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Who said anything about cheap for all?

HPC is the great leveller. Tear down the great chasm between society's haves and have-nots. The latter can be better-off even if we pay twice as much for our basket of shopping.

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The deflationists who think everything will get cheaper are delusional.

More like idealistic. They live in a dream world where fiat currency which can be created in effectively unlimited amounts by the whim of the authorities, doesn't exist.

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I think you've nailed the point exactly - this is how reality will bite.

of course, should HPI be maintained, then it will be a bed of roses for all.

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Nah well law of rent will quickly fill the void.

Also QE3223 by then will have inflated things so badly that a penny sweet has to be paid for with several tons of money.

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The prophecy of a house price crash is not something most people subscribe to. Even if we go into a severe second dip of recession, which seems likely, there won't be a house price crash - a slide maybe, with prices ending up maybe 15-20% lower than now - but no more. I define a house price crash as a fall of 50% over a relatively short period - a year or 18 months. That ain't gonna happen.

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of course, should HPI be maintained, then it will be a bed of roses for all.

It's not about what you want to happen but what is most likely to happen.

Too many ubers think 'I want this to happen' and then think 'this must now happen'. No logic or rational reasoning.

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It's not about what you want to happen but what is most likely to happen.

Too many ubers think 'I want this to happen' and then think 'this must now happen'. No logic or rational reasoning.

Its hard to predict what is going to happen as the continuing "Interference" with market actions by "stimulus", tax cuts, tax hikes and all the rest of the government schemes, that the unintended consequences are what we end up with.

Like a dearth of cheap clunkers, cheap spares not cheap, and demand now tanked for new after the scheme is finished, Some say repair shops are desparately short of work as the clunkers are gone..

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The UK has simply become too expensive to live in.

Uber greedy (hidden in the shadows forcing rip-off britain prices in shops) building/office/shop/shopping Mall 'investor-price gamblers will have to keep dropping their rental rates until shop owners can afford to sell stuff at a price adjusted level that people generally can afford again.

Otherwise you just get one of the 5 supermarkets to buy in which is probably the long term hidden plan.

GUM-state dept store etc

Buy your Blitish passport/future life in the UK for £1,000,000

What is the investor category?

The investor category is designed to allow high net worth individuals make a substantial financial investment in the UK.

Who can apply as an investor?

You do not need a job offer to apply under the investor category. When you apply, you are awarded points based on your ability to invest £1,000,000 in the UK.

You can apply under the investor category now if you are:

  • in the UK and want to make an initial application as an investor (known as switching);
  • already in the UK in the Tier 1 (Investor) category or the former 'investor' category, and want to extend your permission to stay here under Tier 1 (Investor);
  • applying for permission to enter the UK (known as 'entry clearance') in the Tier 1 (Investor) category.

Go to our visa services website if you are applying from outside the UK. There you can find out more about the process in the country you are applying from and download the application forms.

http://www.ukba.homeoffice.gov.uk/workingintheuk/tier1/investor/

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The prophecy of a house price crash is not something most people subscribe to. Even if we go into a severe second dip of recession, which seems likely, there won't be a house price crash - a slide maybe, with prices ending up maybe 15-20% lower than now - but no more. I define a house price crash as a fall of 50% over a relatively short period - a year or 18 months. That ain't gonna happen.

I`m bemused by the fact so many people believed house prices would crash as far back as 2004.

I have been transfixed at times in believing it`s all going to come crashing down around our ears. I suppose it still can.I now try to just get on with my life and change things within my own boundaries of control, if I need to.

I believe there will be slide over the next ten years but, it will be so slow as to be of no real consequence to many people. Many will just get on with their negative equity lives and slowly pop out at the other end. Many will not even realise they have been in negative equity. Others will suffer financially in other ways, but what`s new some people always do, whatever the environment at the time. Life isn`t supposed to be fair. I still get angry with benefit cheats and others who seem to always be bending the rules for their own enrichment at the cost of others etc etc.

Going back to my first sentence, I am astonished at how long this housing bubble has gone on for and can we honestly still say it`s a bubble. Is it something else.? I do not know.

I see lots of charts and graphs proving one thing or another and experts saying ..just wait and see..

I would love to hear from anyone who has been patiently waiting since 2002 or thereabouts for this bubble to burst. I have read RB`s story and a few others already.

The answer to the question has it been better to rent or buy over the last ?? years has no easy answer. It`s generally easier to give an answer in regards to the last three years and hasn`t that always been the case down through the ages.Once five years have gone by there are so many other things to take into account all the math and fancy graphs dont prove diddly squat to me now...

Edited by GinAndPlatonic

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I`m bemused by the fact so many people believed house prices would crash as far back as 2004.

......I would love to hear from anyone who has been patiently waiting since 2002 or thereabouts for this bubble to burst. ...

I thought house prices would fall (not crash) is 2004. We sold our London place in that year as I thought it was as high as it was likely to go. Looking back it was a mistake and I should have rented it out - the rent would have been much more than the interest on the capital and the capital would still be there +/- 10%

I have said for a long time there was a sh1t storm coming and now its here, but it's far worse than I ever imagined. The lunatic HPI from 2004 to 2007 (outside London) must now be reversed and the pain will be very real and very hard for a lot of people. The issue that I see is not house prices per se but the belief that is ingrained in so many people that buying an house is the route to prosperity and you need do nothing in life other than buy property to make money.

By any logic house prices must surely now fall significantly. If they do not then we are storing up some big problems for the future. However, if they do fall the concomitant problems will also be severe.

Crash or not I do not see any alternative but falling standards of living for the next 30 years or more. My parents' generation have borrowed billions and are now draining the system with over generous pensions they have not saved for and with health care costs that could not have been imagined in the 60s. That generation has been lied to by ever government since the war (including the current one). This is true for most of the world not just the UK. Many of my neighbours here in France are wealthy retired people and unemployed youngsters. The issues are the same.

So no, I don't see any improvement generally post-crash. It may help some people, or for others like me even provide an opportunity to make a few bob (one can but hope), but overall it will not be much of an improvement. If you need to borrow to buy it will bring scant benefits. All the Irish banks are bust and the UK banks are tied to their future too. Mortgages will be ever more expensive as time goes by. Even if you are in my position and can buy cash outright you are buying an "asset" that may never go up in value, so unless you want to live in it why buy it? Why would you want to live in the UK? If you have a UK job you will get paid in sterling and so if that crashes you might as well not bother. If you work for someone else your wages are going to get hammered. If, like me, you own your own business the banks will bleed you dry so sell up, besides who are your customers if no one has any money to spend?

Look at the fallout and sh1t that accompanied the '29 crash, or the collapse of the Rouble with Russia's conversion to "market" economics. Times get tough for most people, even some of the genuinely wealthy. That is what governments fear - they look after the wealthy but need the masses to consume to keep capitalism working. No consumers, no capitalism, and the fall of the super rich (like Cameron, Osbourne and Clegg).

I've given up trying to second guess what will happen. I would have bet heavily that Brown could not get western leaders to all go to a ZIRP at once, but he did. That is a measure of how scared they are. The age of prosperity borrowed against your grandchildren is over. What comes next will not be nice.

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House prices tend to crash slowly and a 10-20 per cent annual correction over two to three years is only what is needed to bring prices back into their long-term relationship with income multiples.

Let's hope so. A mega crash will surely dive the UK into some form of mega depression from which it may never emerge.

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I thought house prices would fall (not crash) is 2004. We sold our London place in that year as I thought it was as high as it was likely to go. Looking back it was a mistake and I should have rented it out - the rent would have been much more than the interest on the capital and the capital would still be there +/- 10%

I have said for a long time there was a sh1t storm coming and now its here, but it's far worse than I ever imagined. The lunatic HPI from 2004 to 2007 (outside London) must now be reversed and the pain will be very real and very hard for a lot of people. The issue that I see is not house prices per se but the belief that is ingrained in so many people that buying an house is the route to prosperity and you need do nothing in life other than buy property to make money.

By any logic house prices must surely now fall significantly. If they do not then we are storing up some big problems for the future. However, if they do fall the concomitant problems will also be severe.

Crash or not I do not see any alternative but falling standards of living for the next 30 years or more. My parents' generation have borrowed billions and are now draining the system with over generous pensions they have not saved for and with health care costs that could not have been imagined in the 60s. That generation has been lied to by ever government since the war (including the current one). This is true for most of the world not just the UK. Many of my neighbours here in France are wealthy retired people and unemployed youngsters. The issues are the same.

So no, I don't see any improvement generally post-crash. It may help some people, or for others like me even provide an opportunity to make a few bob (one can but hope), but overall it will not be much of an improvement. If you need to borrow to buy it will bring scant benefits. All the Irish banks are bust and the UK banks are tied to their future too. Mortgages will be ever more expensive as time goes by. Even if you are in my position and can buy cash outright you are buying an "asset" that may never go up in value, so unless you want to live in it why buy it? Why would you want to live in the UK? If you have a UK job you will get paid in sterling and so if that crashes you might as well not bother. If you work for someone else your wages are going to get hammered. If, like me, you own your own business the banks will bleed you dry so sell up, besides who are your customers if no one has any money to spend?

Look at the fallout and sh1t that accompanied the '29 crash, or the collapse of the Rouble with Russia's conversion to "market" economics. Times get tough for most people, even some of the genuinely wealthy. That is what governments fear - they look after the wealthy but need the masses to consume to keep capitalism working. No consumers, no capitalism, and the fall of the super rich (like Cameron, Osbourne and Clegg).

I've given up trying to second guess what will happen. I would have bet heavily that Brown could not get western leaders to all go to a ZIRP at once, but he did. That is a measure of how scared they are. The age of prosperity borrowed against your grandchildren is over. What comes next will not be nice.

Great post. This is it everyone is fcuked but the thinking was that somehow by not buying we would be better off, we are still buggered. I think people who didn't buy might be worse off if they get trapped in negative equity but really in the scheme of things everyone is knackered.

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Great post. This is it everyone is fcuked but the thinking was that somehow by not buying we would be better off, we are still buggered. I think people who didn't buy might be worse off if they get trapped in negative equity but really in the scheme of things everyone is knackered.

Negative equity stops people moving to take advantage of job opportunities. My bro-in-law works for the government and has seen several people wanting to take up job offers in his department but unable to move. As a result they use contractors at about twice the salary rate for the direct employee.

My missus has had a couple of job possibilities in the UK but if you factor in the rental its not worth us moving back. If we bought somewhere to overcome the rent issues and houses drop 10% next year its much the same as the rent. So it doesn't pay to work even if you are not entitled to any benefits.

Something has to give. What it will be I don't know.

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Need some insight here. I hear a lot of talk on here from house price crash posters who say that the increased costs of housing makes the standard of living cost so high in the UK. I would like to think there is a correlation between the two things and that the UK will be more affordable and generally great, when house prices drop, but is this really going to happen?

Clearly all countries are different and can't be compared like for like, but In other countries which have experienced house price crashes, have they had a drop in the cost of living?

(...)

-Hard to get any job, massive unemployment.

etc, etc, etc.

-Everyone is still knackered.

Like I say in my sig... (please take a look below).

Unfortunately the adjustments downward will be very painful for a lot of people - millions. A correction of this size is very difficult, and costly, both in re-allocation of resources (away from a bubble economy), and also human lives turned upside down by all the needed reforms. The credit/debt bubble was a national tragedy. The hangover will be more painful though. But we have no choice really. That is why the "hangover" metaphor is so appropriate here.

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  • 285 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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