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'house Prices To Double By 2025'

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A TWO minute search reveals THIS . . . . .

Nick Booker

1 Kingsway

London

United Kingdom

WC2B 6XD

Speaking on 'Moneyweek' 3rd June 2005

Nick Booker: I can’t see there has been. I’m bearish at the moment. I think the market will get a shock in the autumn when all those buy-to-let investors who committed to buy new-build flats two years ago, when interest rates were at their lowest, have to complete on them. That’s in the six months from this summer to early next year. With rates where they are now, 30% of them, at least of the ones I know, are finding it impossible to sort out funding. With rates higher than they were and rental returns lower, no one will lend them the money, so they can’t pay for the flats.

NB: Particularly in a lot of the northern cities. When returns in London cooled off a few years ago, people went north and expected the high rental returns they saw there initially to be sustainable, but they haven’t been. There’s now an over-supply of very similar apartments. Developers have been building for

investors and investment clubs, rather than for people who are buying property to actually live in. That puts us in uncharted territory.

NB: In 1989, Gordon Brown came out and said to Lawson in the House of Commons, “You’re building up a credit boom that’s bound to bust.” But now he’s doing – and is continuing to do – exactly what he criticised Lawson for doing in the late 1980s. It’s amazing.

NB: Why don’t the estate agents talk the market down and get people to ask

realistic prices?

NB: Quite. If there’s so much demand for property, people should be renting more and rents should be going up. Everyone needs somewhere to sleep at night, so where are all these people who need houses – particularly first-time buyers and immigrants? Where are they? The first thing you do at the bottom of the ladder is rent.

So will he make his mind up - one way or the other . . .

or are the VI's pulling his strings now???

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Here's something else which you WILL NEVER READ on other websites!!

By 2025 the BABY BOOMERS will be dying off in the 10's of thousands leaving thousands of houses, bungalows, flats EMPTY!

Your expensive House purchase a decade before will put you in NEGATIVE EQUITY for THE REST OF YOUR LIFE!

House prices, by necessity need to drop 60% AT LEAST!

EDIT

Just an afterthought . . . .

By 2025 we will be in the 'mother' of energy crisis Peak Oil and all that.

People wont be able to afford to travel far to work due to petrol cost.

Second/Holiday homes will be sold off - adding to housing stocks.

Local economies will thrive and House Prices will be dictated @ local levels.

Re-think

I predict a house will sell for 25% of todays prices!

Stuff what they say in in2perspective.com - they cant think in any other way than commission and £££££ signs!

Edited by erranta

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double in 20 years?  that seems conservative given that they doubled in less than half that time during the recent boom.  So it's not exactly earth shattering news  :rolleyes: by Mint

That double in the next twenty years maps the prices from pre boom now.. quite accruratly against the expected inflation increase..

They do double every twenty years..

So do wages..

However in Devon the have gone up by between 3 and 4 times in 5 years..

Hmmnnn...

Yup.. sounds about right...

Should dip much further over the next few years.. then climb again..

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Here's something else which you WILL NEVER READ on other websites!!

By 2025 the BABY BOOMERS will be dying off in the 10's of thousands leaving thousands of houses, bungalows, flats EMPTY!

Your expensive House purchase a decade before will put you in NEGATIVE EQUITY for THE REST OF YOUR LIFE!

House prices, by necessity need to drop 60% AT LEAST!

EDIT

Just an afterthought . . . .

By 2025 we will be in the 'mother' of energy crisis Peak Oil and all that.

People wont be able to afford to travel far to work due to petrol cost.

Second/Holiday homes will be sold off - adding to housing stocks.

Local economies will thrive and House Prices will be dictated @ local levels.

Re-think

I predict a house will sell for 25% of todays prices!

Stuff what they say in in2perspective.com - they cant think in any other way than commission and £££££ signs!

25% of today's price in 2025?

You've been spending too much time reading all the doom monger posts on HPC.

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25% of today's price in 2025?

You've been spending too much time reading all the doom monger posts on HPC.

A 2-liner 'cowards' reply!

Express your thoughts in detail against my reasoning . . . .

. . . . and We will have a discourse!

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double in 20 years? that seems conservative given that they doubled in less than half that time during the recent boom. So it's not exactly earth shattering news

So let me see:

Last 20 years: inflation rates in excess of 20% per annum.

Now: inflation rates mandated to be below 3% per annum.

Yes, you're right, it's completely sensible to extrapolate rates of price change from a high inflationary environment onto a low inflation economy. :rolleyes:

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A 2-liner 'cowards' reply!

Express your thoughts in detail against my reasoning . . . .

. . . . and We will have a discourse!

Fair enough.

Point 1 the empty boomer housing in 20yrs. Do you really think that will knock prices down 60% from TODAY'S prices?

I don't have a crystal ball for the future but I would guess that these extra properties are more likely to be bought by speculators.

Also, there will be a new generation of people looking for housing in 2025 and also higher immigration IMO.

This will not drive prices down in the catastrophic manner you describe.

Also, I'm intrigued why you reason ONLY a further 15% fall for the economic armageddon of your 'mother' energy crisis where people won't be able to travel to work any more. That'll cheer up a few homeowners.

(Don't be too surprised if you can still buy petrol at your local supermarket in 20years' time, erranta)

Have you really thought these figures through?

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Here's something else which you WILL NEVER READ on other websites!!

By 2025 the BABY BOOMERS will be dying off in the 10's of thousands leaving thousands of houses, bungalows, flats EMPTY!

Unless the baby boomers were/are infertile, this will have little effect on the demography.

Your expensive House purchase a decade before will put you in NEGATIVE EQUITY for THE REST OF YOUR LIFE!

House prices, by necessity need to drop 60% AT LEAST!

EDIT

Just an afterthought . . . .

By 2025 we will be in the 'mother' of energy crisis Peak Oil and all that.

People wont be able to afford to travel far to work due to petrol cost.

We probably reached peak oil production about 2 years ago. New technology already exists that uses water (hydrogen conversion) as an energy source using very little petrol to power it.

Second/Holiday homes will be sold off - adding to housing stocks.

Local economies will thrive and House Prices will be dictated @ local levels.

Re-think

I predict a house will sell for 25% of todays prices!

Stuff what they say in in2perspective.com - they cant think in any other way than commission and £££££ signs!

The only reason you won't be reading what you're saying on other websites, is because you're talking out of your a$$.

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I don't have a crystal ball for the future but I would guess that these extra properties are more likely to be bought by speculators.

For what? So they can sit there empty sucking up money?

Also, there will be a new generation of people looking for housing in 2025

Far less of them than even today.

and also higher immigration IMO.

Why will people want to move to a poor, declining, aged nation? The only reason we have massive immigration right now is because wages are so out of whack around the world: people come here to work and send money home, not to buy expensive houes. By 2025, there will have been plenty of time for British wages to drop to the same level, or foreign wages to catch up.

Anyone who takes out a 25-year loan today to buy a house is taking a huge gamble on sustained economic growth and wage inflation which is unlikely to occur.

Edited by MarkG

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House prices double every 20 years. So do wages.

Why do people trot out this nonsense?

Where does it say that has to happen? The past is no guide to the future.

And if prices do double by 2025 who excatly will be paying the asking prices? Because wages will need to more than double to keep pace.

I earn 35K today. 20 years time I will earn 70K. Great.

House today cost me 370K. 20 years time 740K. Not so great.

My wages have doubled but I only have 35K more.

I need 370K more to buy a house plus the cost of that huge borrowing.

Mmmmm.

House prices to double by 2025?

I think not. Unless we ALL win the lottery.

Baby boomers will not only be selling off property to pay for their retirement, but pension schemes will be cashing in shares causing the FTSE to fall.

The days of boom are over for quite a few decades.

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My spreadsheet, see Buying vs renting model, taking into account a HPC and then another rise in HPI growth rate churns out a doubling of house prices in 2025 in nominal terms. My figures for yearly growth rates are pretty much plucked out of the air but over such a longtime period its not actually such a crazy result.

If rebased to take general inflation into account the actual growth is less spectacular

150,000 house today comes out as 282,000 in 2025 which rebased to take general inflation would give a modest 158,035 in todays prices. 150,000 in cash though in 2025 would be worth only 83,914 which would perhaps illustrate that house wealth can act as a good shield against general inflation.

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My spreadsheet, see Buying vs renting model, taking into account a HPC and then another rise in HPI growth rate churns out a doubling of house prices in 2025 in nominal terms.

How are British wages going to increase by a factor of six over the next twenty years in order to sustain prices at twice today's levels?

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Yes this is where simply plugging figures into spreadsheets provides nothing of worth over long time periods.

Nobody answers the basic question. Who will be able to AFFORD a doubling of house prices by 2025? Who will be buying all those houses at twice today's prices in 2025? And how will they pay for them?

Because if there are no buyers there is no market.

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Fair enough.

Point 1 the empty boomer housing in 20yrs. Do you really think that will knock prices down 60% from TODAY'S prices?

I don't have a crystal ball for the future but I would guess that these extra properties are more likely to be bought by speculators.

Also, there will be a new generation of people looking for housing in 2025 and also higher immigration IMO.

This will not drive prices down in the catastrophic manner you describe.

Also, I'm intrigued why you reason ONLY a further 15% fall for the economic armageddon of your 'mother' energy crisis where people won't be able to travel to work any more. That'll cheer up a few homeowners.

(Don't be too surprised if you can still buy petrol at your local supermarket in 20years' time, erranta)

Have you really thought these figures through?

Hah - you answered after my lunch break!

Point 1 the empty boomer housing in 20yrs. Do you really think that will knock prices down 60% from TODAY'S prices?

Probably More - see below

I don't have a crystal ball for the future but I would guess that these extra properties are more likely to be bought by speculators.

Most will be bankrupted in the coming decade!

Also, there will be a new generation of people looking for housing in 2025 and also higher immigration IMO.

What 'new generation' - look @ the declining birth rate in this country - 57% I think I read - in 20-30yrs time 60% LESS people coming to house buying age!

The WORST thing is that mainly well educated people are not having/can't afford to have kids and therefore do not pass on knowledge and put their kids through better schools.

This will lead to the future 'Servant Class' of the Uber Rich who will take over the Stately Homes we spend Millions of Taxpayers money on!

Costs of 'travel' will be uneconomical and unaffordable to new immigrants if there is no PETROL/OIL They will stay in their own countries. Plus lack of OIL (or a sustitute) = NO FOOD, NO JOBS!

This will not drive prices down in the catastrophic manner you describe.

Hmmm we will see!

Also, I'm intrigued why you reason ONLY a further 15% fall for the economic armageddon of your 'mother' energy crisis where people won't be able to travel to work any more. That'll cheer up a few homeowners.

No alternative to OIL - most of us will DIE :o

Simple as that!

(Don't be too surprised if you can still buy petrol at your local supermarket in 20years' time, erranta)

I NEVER said you couldn't buy Petrol - re-read the blurb!

Have you really thought these figures through?

Nope - plucked from the ether.

Just common sense really and deduction of facts.

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No one knows where house prices will be next year, let alone twenty. Ignore.

Yowzer!!!! Talk about stating the obvious Gone West. The whole point of this forum is based on the fact that nobody knows hence the debate.

Are you going to post that pearl of wisdom on EVERY thread on the forum????? :P

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Yes this is where simply plugging figures into spreadsheets provides nothing of worth over long time periods.

Nobody answers the basic question. Who will be able to AFFORD a doubling of house prices by 2025? Who will be buying all those houses at twice today's prices in 2025? And how will they pay for them?

Because if there are no buyers there is no market.

If wage increases continue to average 4.1% per year, then average salaries in 2025 will be 2.7 times as high as they are today, making property considerably more affordable.

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I don't have a crystal ball for the future but I would guess that these extra properties are more likely to be bought by speculators

Most will be bankrupted in the coming decade!

A lot of newbie amateur BTL LLs will suffer in the recession of the next few years, that is true. However, there will probably be MORE landlords in 20yrs time than there are now and/or they will have larger portfolios. Maybe I should have said

LLs rather than speculators.

Also, there will be a new generation of people looking for housing in 2025 and also higher immigration IMO.

What 'new generation' - look @ the declining birth rate in this country - 57% I think I read - in 20-30yrs time 60% LESS people coming to house buying age!

Immigration will swell the numbers.

Despite the falling birthrate, the UK population is GROWING not falling. (or it was the last time I looked) These people will need a house to live in. The lack of decent affordable housing will be with us for some time to come.

Therefore I just don't see how prices can FALL to 25% of today's value in 20yrs.

Prices will fall in the next few years (we can at least agree on something!)

But I believe they will recover and prices will rise again.

No alternative to OIL - most of us will DIE  :o

Simple as that!

Oh dear. And all this in the next 20 years?

I can see we are not going to agree on this one.

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So let me see:

Last 20 years: inflation rates in excess of 20% per annum.

Now: inflation rates mandated to be below 3% per annum.

Yes, you're right, it's completely sensible to extrapolate rates of price change from a high inflationary environment onto a low inflation economy. :rolleyes:

Forget about extrapolation of financial theory aspect, extrapolation of the practical 3% inflation would indicate that the value of 100K is about 180K in 2025. What they are predicting therefore is a real gain of about 10%s. A .5% growth factor over 20 years would appear to be well less than I could get at any high street bank.

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Despite the falling birthrate, the UK population is GROWING not falling. (or it was the last time I looked) These people will need a house to live in.

No, they just need somewhere to live.

TTRTR is packing them in six to a room... making them largely irrelevant to housing needs: most are coming here to make money and send it home, not to buy massively overpriced houses.

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No, they just need somewhere to live.

TTRTR is packing them in six to a room... making them largely irrelevant to housing needs: most are coming here to make money and send it home, not to buy massively overpriced houses.

I assume you meant 6 to a house. (but then again you may know TTRTR better than me!)

I am no expert on immigration but I would guess you are right in that a lot of these workers will rent at the lower end of the market. I doubt 6 to a house will be typical across the UK though.

Which means the rest of the population will have to nudge up market to find a roof over their head. (OK, I'm seriously generalising here but at the end of the day 60million people will still need somewhere to live)

Nothing I have seen on this thread justifies a fall to 25% of today's value by 2025 IMO.

BTW, aren't you thinking of emigrating youself soon, MarkG?

As an immigrant, I assume you don't plan to live 6 to a room/house?

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If wage increases continue to average 4.1% per year, then average salaries in 2025 will be 2.7 times as high as they are today, making property considerably more affordable.

First of all you are assuming earnings won't need to be spent elsewhere in 2025 - like bigger taxes, retirement, health care etc., none of which will be "free" like today (not with so many retired people to pay for). Not to mention what petrol might cost, etc.,

Secondly, if a house today costs me 200K and doubles to 400K I have to find an extra 200K from somewhere. Earnings start at a much lower figure so tripling them still won't account for that extra 200K. So how is that house more affordable?

Put all of the figures that earnings are spent on, project them forward, then come back with your spread sheet.Then I might take your "more affordable" patter more seriously.

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  • 301 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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