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guitarman001

Lse: Prices To Fall 25%

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Expect 50% falls then.

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Housing market data has provided little cheer for the average homeowner in recent years but the latest report by CheckRisk warns that residential property prices in the UK could fall by between 20% and 25% from current levels in 2011 and 2012.

The investment strategy adviser explains that several factors are likely to send house prices tumbling including higher interest rates, reduced mortgage lending, high inflation and high levels of public and private debt.

It seems clear that they are predicting big falls, hance the use of the word "tumbling", but the orthodoxy remains that even if a member of the media expects >50% falls they can't bring themselves to put it into print.

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Apart from interest rates we have all the other factors NOW, but the declines are glacial. Been keeping my eye on a property which would have been a definite buy at 20% off, but it's turned up sold this morning at a ludicrously high asking price. Five long years and counting...

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UK house prices could fall by 25% in 2011

While official data reveals an already depressed UK housing market, new research suggests the outlook could be even gloomier brighter for first time buyers.

21 Apr - 14:56

Housing market data has provided little cheer for the average homeowner in recent years but the latest report by CheckRisk warns that residential property prices in the UK could fall by between 20% and 25% from current levels in 2011 and 2012.

The investment strategy adviser explains that several factors are likely to send house prices tumbling including higher interest rates, reduced mortgage lending, high inflation and high levels of public and private debt.

"The UK is in danger of entering a precarious economic environment," the report warned.

The findings stand in contrast to the latest report from Nationwide which suggests the housing market will experience a modest decline in 2011.

“With the economic recovery expected to remain sluggish, the most likely outcome is that the property market will follow suit, with low transaction levels and prices moving sideways :blink: or modestly lower through 2011,” said Robert Gardner, Nationwide's chief economist.

In a separate report from the Halifax earlier this month its house price index showed that prices in the first quarter of this year were 0.6% lower than the final three months of 2010.

It said that while the rate of decline in house prices has slowed over the last three months, they continue to fall at a modest pace.

20-25% in the next 20 months?? Well, we're already -5% YoY in the West Midlands so that seems feasible. Won't be too long to find out how accurate LSE/CheckRisk are.

I'm up to my nuts in the colourful, continuously devalued, fiat paper stuff and yet the future is still looking bright for first time buyers. We don't need more debt or more "innovation" or more government meddling with initiatives and schemes - we need what the rest of the world has already witnessed - the easiest solution of all - lower house prices.

And it looks like we're going to get them. This is very encouraging news. Good Friday? It's fookin' Great! :D

Viva la recovereh!

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Just read that out to the wife.

Wife: That's good, how much do we need prices to drop to get back the money we've spent on rent?

Me: We haven't spent any money on rent.

Wife: That's right, I keep forgetting the interest we get.

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Just read that out to the wife.

Wife: That's good, how much do we need prices to drop to get back the money we've spent on rent?

Me: We haven't spent any money on rent.

Wife: That's right, I keep forgetting the interest we get.

The old "rent is dead money" line beloved of the BTLing meejah.

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Just read that out to the wife.

Wife: That's good, how much do we need prices to drop to get back the money we've spent on rent?

Me: We haven't spent any money on rent.

Wife: That's right, I keep forgetting the interest we get.

heh, my wife said to me yeaterday:

"i looked at the cost of a mortgage and you pay a HUGE amount of interest of the whole lifetime"

getting the picture at last eh? - I am hoping for big falls in north london so I can afford a house instead of a flat.

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Just read that out to the wife.

Wife: That's good, how much do we need prices to drop to get back the money we've spent on rent?

Me: We haven't spent any money on rent.

Wife: That's right, I keep forgetting the interest we get.

What you're saying is your rent covers the interest you'd pay on a mortgage... but if you take out a mortgage in future you'd still have to pay this interest so you're still paying out...? Unless you plan to buy outright?

The interest on a mortgage is my major consideration and should be every sheeple's, also

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What you're saying is your rent covers the interest you'd pay on a mortgage... but if you take out a mortgage in future you'd still have to pay this interest so you're still paying out...? Unless you plan to buy outright?

The interest on a mortgage is my major consideration and should be every sheeple's, also

The interest I receive on the money I'd have to draw out of the bank to buy the house I'm renting covers the rent.

We all have to pay for a roof over our heads, this can be done in three ways...

1, Pay rent to a landlord.

2, Pay interest to a lender.

3, Pay cash and lose the interest on the money you have tied up in the house.

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Just read that out to the wife.

Wife: That's good, how much do we need prices to drop to get back the money we've spent on rent?

Me: We haven't spent any money on rent.

Wife: That's right, I keep forgetting the interest we get.

Unfortunately I don't have the STR capital on which to earn interest to pay the rent but I'm not too worried since house prices have now fallen by more than the amount I've paid in rent in the last 6 years. Indeed, one house on my Property-Bee watch list dropped in price last month by more than I've paid in rent in the past two years. I'm sure I'm not alone and still they keep on falling.

Swings and roundabouts, I know, but I think that any FTB who bought after 2004 is going to get seriously burned if they haven't already.

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Why?

People who would have lived in Hampstead 20 years ago based on their incomes had to live in West Hampstead 10 years ago doing the same work and have to live in Kilburn now.

If house prices normalise, the demographics catch up with the market and leveraged punters go bust, high income, house poor youngish people who live in Kilburn now will be able to move back to Hampstead.

People doing the same jobs as their grandparents will be able to live in the same areas and types of homes as two generations ago.

Apart from the fortunate few who bought early enough or inherited enough, high house prices have forced many people to live in areas that their socio-economic situation would have precluded 10 to 20 years ago.

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Unfortunately I don't have the STR capital on which to earn interest to pay the rent but I'm not too worried since house prices have now fallen by more than the amount I've paid in rent in the last 6 years. Indeed, one house on my Property-Bee watch list dropped in price last month by more than I've paid in rent in the past two years. I'm sure I'm not alone and still they keep on falling.

Swings and roundabouts, I know, but I think that any FTB who bought after 2004 is going to get seriously burned if they haven't already.

2002-2003 really, where my parents live they more than doubled then (quadrupled when you take into account the interest you'd have to pay on the bigger loan) and have since stayed about the same with a few higher exceptions on zoopla.

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Unfortunately I don't have the STR capital on which to earn interest to pay the rent but I'm not too worried since house prices have now fallen by more than the amount I've paid in rent in the last 6 years. Indeed, one house on my Property-Bee watch list dropped in price last month by more than I've paid in rent in the past two years. I'm sure I'm not alone and still they keep on falling.

Swings and roundabouts, I know, but I think that any FTB who bought after 2004 is going to get seriously burned if they haven't already.

Plus you haven't been paying out interest to fund the purchase of a depreciating asset, you're doing just fine :).

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2002-2003 really, where my parents live they more than doubled then (quadrupled when you take into account the interest you'd have to pay on the bigger loan) and have since stayed about the same with a few higher exceptions on zoopla.

Well quite. My own searches confirm what I witnessed a decade ago (FFS has it been that long!) - http://www.nethouseprices.com/ - every property I've searched DOUBLED in price between 2001 and 2003. DOUBLED in just 2 years!

Hmm... anything significant happen in 2001... anything that might have required a huge credit bubble to be blown to avoid a massive world recession (like anybody couldn't see it at the time)? <_<

Unfortunately we'll never see 2001 house prices again. Prices will need to return to ONE THIRD of current asking prices for that to happen and I just don't see it.

If I can get somewhere at 2002 / 2003 prices, with general wage inflation, I'll be content with that. I'm not looking to make money, I'm just looking to provide a roof over my family's head that doesn't require both of us working full time, 50+ hours a week each, just to be able to afford something that my parents could afford on one salary alone working 40 hours a week. Indeed, something we could have actually afforded ourselves had we bought in August 2001.

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Plus you haven't been paying out interest to fund the purchase of a depreciating asset, you're doing just fine :).

Thanks Bruce. Plus I've had new double glazing, a new boiler and a new bathroom and kitchen during that time and not once have I MEWed or had a trip to BrightHouse.

No debt, money in the bank, and only need to give one months notice when we decide to move into the place we choose to buy. I know we made the right decision; I'm just frustrated that so many others didn't and now we're all being penalised for their greedy and stupid mistakes.

House price fall predictions of 25% does the soul good and makes me think that notions of "cause and effect" and "action and consequence" aren't completely forgotten concepts after all.

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No no no, this is simply incorrect.

Banks are starting to lend to each other again. 2 have dropped their mortgage rates only this week! Why? When the BOE have stated they will HAVE to increase interest rates later in the year?

95% mortgages are coming back most definitely in the VERY near future. I have a reliable source about this and even some Estate Agents have gotten wind of this and told me this week, that the market will be going crazy again with FTBers as soon as they are announced.

I am a bear very quickly turning bull.

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No no no, this is simply incorrect.

Banks are starting to lend to each other again. 2 have dropped their mortgage rates only this week! Why? When the BOE have stated they will HAVE to increase interest rates later in the year?

95% mortgages are coming back most definitely in the VERY near future. I have a reliable source about this and even some Estate Agents have gotten wind of this and told me this week, that the market will be going crazy again with FTBers as soon as they are announced.

I am a bear very quickly turning bull.

I don't have any contact with estate agents :rolleyes:.

It's obviously not the time to buy so why raise your blood pressure unnecessarily? :rolleyes:.

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25% compared to what? Not compared to sterling I fear...yen, gold...well yes, it has happened already. Negative real interest rates no matter what inflation does is the only way for the system to survive now. That prevents a property bloodbath and is the only way the debt pile can stay upright. If you still think differently you've not been paying attention OR you've reached HPC Thetan level 9!

Edited by clockslinger

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  • 284 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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