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Sentiment

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It strikes me that sentiment is so nutty so engrained and so disconnected from reality that this crash is going to be very slow, as it looks right now

the sheep are meandering off the cliff edge

witness the daily mail article about feckless boomers buying up 45k houses ooop norf

I was involved in a local political debate recently where nobody knew how house yields related to investment returns vis a vis other assets, they just thought house prices went up and that's it, and they were trying to take themselves seriously

it is pretty hopeless - but at least we know the boiling frogs have made themselves comfortable in the pot

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It strikes me that sentiment is so nutty so engrained and so disconnected from reality that this crash is going to be very slow, as it looks right now

the sheep are meandering off the cliff edge

witness the daily mail article about feckless boomers buying up 45k houses ooop norf

I was involved in a local political debate recently where nobody knew how house yields related to investment returns vis a vis other assets, they just thought house prices went up and that's it, and they were trying to take themselves seriously

it is pretty hopeless - but at least we know the boiling frogs have made themselves comfortable in the pot

Old habits die hard I suppose. I guess it's partly about not wanting to be wrong, perfectly understandable. They want to believe. The balance is definitely shifting though, but it seems like a snail's pace. Most houses for sale are kite flying so far as I can gather, forced sales are needed.

I'd be keen to hear more about the local debate you had- manage to enlighten anyone?

As it happens a friend of mine recently pulled out of a sale due to being dicked around by the seller on the cost of the work the survey highlighted(basically overdue maintenance). I think it will ultimately save him shedloads of dough, so good on him.

Edited by cheeznbreed

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I distinctly remember having a conversation in my second year at uni in 1996 with a few new mates where we commented that if we were to pool our rent money together (x3) we could easily service a mortgage at about 6% I think at the time and would be cheaper than renting the same house. However, remember there was eff all jobs really at the time.

This is the turning point.

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+1Si1

A little anecdotal but; a couple I know recently split up. They bought a house (3bed Semi-D) together early 2009 for £205K and have now put it on the mkt for £250K....!

Only alterations done were painting / decorating, new bathroom and knocking through a kitchen wall to create an 'open space' as well as get PP for an extension out the back.

I just couldn't be bothered to enter into the conversation with these people cooing over this guy who reckoned he'd 'made' £45k profit in 2 years.

Would have been a complete waste of breath as sentiment dictates house prices only ever go up.

Needless to say the house is still on the market 3 months later at the same crazy price, no £45k 'profit' having yet materialised .

BF

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It strikes me that sentiment is so nutty so engrained and so disconnected from reality that this crash is going to be very slow, as it looks right now

the sheep are meandering off the cliff edge

witness the daily mail article about feckless boomers buying up 45k houses ooop norf

I was involved in a local political debate recently where nobody knew how house yields related to investment returns vis a vis other assets, they just thought house prices went up and that's it, and they were trying to take themselves seriously

it is pretty hopeless - but at least we know the boiling frogs have made themselves comfortable in the pot

Someone was asked about how they went broke during the great depression. Their answer was something like : "Very slowly at first and then, suddenly, very quickly".

I think that the sentiment underlying the answer reflects human nature. A lot of people are hanging on grimly by their fingernails and are losing their grip on the edge of the cliff. The sun is about to set on their hopes.

Hanging-180x130.jpg

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One thing that might make an impact this time around is that a decade of 'property porn' has created a speculator mentality that might lead to a sudden rush to the exit- Malcolm Gladwell wrote an interesting book comparing mass social behaviour with epidemics which points out that mass movements in society can sometimes be caused by relatively marginal factors.

So the transformation of 'home owners' into 'property speculators' that has been fostered by the mass media in recent years might mean that the previous pattern of following the market down could be replaced by a generation of 'canny investors' suddenly trying to lock in their property gains- STR might seem old hat on here, but to many it could justnow be heaving into view as a clever way to ride out the 'crash' :lol:

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This thread is what makes HPC the ultimate contrarian site. It's not just countering ten years of property porn and easy money, or even one generation looking at how much cash their parents made by taking out a mortgage, it's challenging DECADES of one simple formula, imprinted into the DNA of the British: bricks + mortar + debt = £££. If people step back enough from the chart they might see the dip of the early nineties, but either side of it are those reassuring upward climbs. So this is just another 'dip'. The 'recovery' is not far behind. That's how it's always been. This is how it works. People you've heard of who lost money in property, even if they actually exist, must have done something really awful in a previous life. The big picture is for academics. Property we understand. You buy it, you brag about how much it's gone up. It's what makes Britain great.

The astonishing thing is, I can't think of anything that will replace it. Gold?

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Guy I work with spoke to me 2 months ago about buying a house. He is getting married later this Summer and made money flipping a couple of places in the last few years. I counselled strongly against buying, citing how badly burnt I got in the Irish property crash. To no avail. He has made too much money in the past, he " knows the market", etc, etc.

It's already gone pear-shaped and swallowed a ball of money. But he remains convinced it was a good investment. This is because it is ingrained in the psyche that it is a winner.

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This thread is what makes HPC the ultimate contrarian site. It's not just countering ten years of property porn and easy money, or even one generation looking at how much cash their parents made by taking out a mortgage, it's challenging DECADES of one simple formula, imprinted into the DNA of the British: bricks + mortar + debt = £££. If people step back enough from the chart they might see the dip of the early nineties, but either side of it are those reassuring upward climbs. So this is just another 'dip'. The 'recovery' is not far behind. That's how it's always been. This is how it works. People you've heard of who lost money in property, even if they actually exist, must have done something really awful in a previous life. The big picture is for academics. Property we understand. You buy it, you brag about how much it's gone up. It's what makes Britain great.

The astonishing thing is, I can't think of anything that will replace it. Gold?

Death

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This thread is what makes HPC the ultimate contrarian site. It's not just countering ten years of property porn and easy money, or even one generation looking at how much cash their parents made by taking out a mortgage, it's challenging DECADES of one simple formula, imprinted into the DNA of the British: bricks + mortar + debt = £££. If people step back enough from the chart they might see the dip of the early nineties, but either side of it are those reassuring upward climbs. So this is just another 'dip'. The 'recovery' is not far behind. That's how it's always been. This is how it works. People you've heard of who lost money in property, even if they actually exist, must have done something really awful in a previous life. The big picture is for academics. Property we understand. You buy it, you brag about how much it's gone up. It's what makes Britain great.

The astonishing thing is, I can't think of anything that will replace it. Gold?

Rice.

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I'd be keen to hear more about the local debate you had- manage to enlighten anyone?

I was at a preamble of a local discussion arranged by local tory activists (not central party, no non-locals or elected [or for that matter electable] people there), and received the minutes later; I didn't want to put my head above the parapet frankly!

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It strikes me that sentiment is so nutty so engrained and so disconnected from reality that this crash is going to be very slow, as it looks right now

Define reality. Reality is what people believe. Being a contrarian when it comes to reality strikes me as unwise. The power of the masses now to make their own reality happen is unprecedented - just review the news of the last 12 months.

the sheep are meandering off the cliff edge

They are certainly milling round at the edge, but looking back in time, the masses have always existed at the cliff edge. That's life, but in general all societies require a careful balance which is struck by having the masses near the edge but with only a few wandering over - because lets say, the wealth of the rest is based on the activity of the masses.

I think the only thing that has really changed here is that the cliff edge is more visible. Sheep are not alarmed by plunging sheep unless they see them go over.

Its important to try and judge one's own distance from the edge. One need not be that far away as long as there's plenty of others between you and it, because only a small portion of that crowd can go over it before we all do. Savings alone don't constitute distance, but certainly they help in the short term.

Given that the edge is not a physical reality but an artefact of collective imagination and behaviour, the edge can move and it can also be made less visible, which is to all intents and purposes the same as moving it. This is the great endeavour of modern governance. Sudden sheep movement also moves the edge to a new location.

I was involved in a local political debate recently where nobody knew how house yields related to investment returns vis a vis other assets, they just thought house prices went up and that's it, and they were trying to take themselves seriously

it is pretty hopeless - but at least we know the boiling frogs have made themselves comfortable in the pot

Like I said, most of the frogs will get out of the pot, or none of us will. That's not to say we won't get poorer at least for a while, but absolute wealth is the last thing that people are concerned about - as long as the edge remains visible.

You need to be careful when using metaphors like sheep falling over cliffs that you don't confuse the metaphor with actual reality, otherwise perpetual disappointment and confusion will be your lot.

IMPO, rising rates are not where the edge is located.

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That is your belief...

No, it is a facr.

Facts don't alter because your beliefs change.

Don't believe me?

Go jump put of a window. If you believe you can fly you'll be fine.

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One thing that might make an impact this time around is that a decade of 'property porn' has created a speculator mentality that might lead to a sudden rush to the exit- Malcolm Gladwell wrote an interesting book comparing mass social behaviour with epidemics which points out that mass movements in society can sometimes be caused by relatively marginal factors.

So the transformation of 'home owners' into 'property speculators' that has been fostered by the mass media in recent years might mean that the previous pattern of following the market down could be replaced by a generation of 'canny investors' suddenly trying to lock in their property gains- STR might seem old hat on here, but to many it could justnow be heaving into view as a clever way to ride out the 'crash' :lol:

Interesting point. There's certainly a lot of chain free & potentially very motivated sellers out there.

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Nope.

Reality is what is there regardless of what people believe.

Reality is unknowable. We have some ideas about it, some of which have worked thus far. If they work well we call them laws of nature. But there's nothing to stop them all changing tomorow .....

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No, it is a facr.

Facts don't alter because your beliefs change.

Don't believe me?

Go jump put of a window. If you believe you can fly you'll be fine.

what's a facr?

Are you a facr?

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what's a facr?

Are you a facr?

It's abadly spelled fact - but ofc you knew that and this passive agressive crap was the best you could muster.

But no worries, you can just believe I didn't respond.

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It strikes me that sentiment is so nutty so engrained and so disconnected from reality that this crash is going to be very slow, as it looks right now

How was sentiment in 1989? or either side of it by a year? Sentiment can change quickly; imagine (cause it does not look like it is about to happen-but could) interest rates going back up to even as low as 4%; carnage. All you would hear about is how bad an investment property is.

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i think its the buyers sentiment that has changed now. the young see housing as a trap and gross rents as foolish. they have gone into sponge mode. hence the record number of them not interested in a job of any kind. no reward = no work.

an i=pod and a bedsit / room share for a 44hr week just doesnt cut it.

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A couple who 'used' to use one of the drinking establishments I frequent put there house up for sale June 2010, priced at 179,999, they bought it in 1998 for 85,000, according to rightmove. I quite liked the house but certainly not for that much, besides even on approx 2.5 times the av. wage I didn't think I could afford that sort of money. I managed to hold my tongue for nearly a year, whilst last November they reduced it 5k, then another 10k in march this year. However one night I'd had a few and enquired as to whether there had been much interest in the house, and that I quite liked it but couldn't quite afford (and certainly didn't want to pay) the price it was up for, the chap asked me how much I thought it was worth and to say he was a little taken aback when I mentioned 135-140k was an understatement, but when he told his Mrs she actually came storming across the pub to confront me. Firstly she asked who the f*** was I to be making judgements like that, then when I tried to patiently explain that we were very probably entering one hell of a dip in terms of both house prices and available credit she just went off on one about how the house was 'worth' much more than my estimate and that she would rather rent it out than let it be 'Given away'. The rumour mill has it that they have 'bought' a much bigger place further down the road (approx. 225k) Which might explain the desperation but certainly not the venom directed at me. I think its going to take quite a shock to get the attitudes changed.

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A couple who 'used' to use one of the drinking establishments I frequent put there house up for sale June 2010, priced at 179,999, they bought it in 1998 for 85,000, according to rightmove. I quite liked the house but certainly not for that much, besides even on approx 2.5 times the av. wage I didn't think I could afford that sort of money. I managed to hold my tongue for nearly a year, whilst last November they reduced it 5k, then another 10k in march this year. However one night I'd had a few and enquired as to whether there had been much interest in the house, and that I quite liked it but couldn't quite afford (and certainly didn't want to pay) the price it was up for, the chap asked me how much I thought it was worth and to say he was a little taken aback when I mentioned 135-140k was an understatement, but when he told his Mrs she actually came storming across the pub to confront me. Firstly she asked who the f*** was I to be making judgements like that, then when I tried to patiently explain that we were very probably entering one hell of a dip in terms of both house prices and available credit she just went off on one about how the house was 'worth' much more than my estimate and that she would rather rent it out than let it be 'Given away'. The rumour mill has it that they have 'bought' a much bigger place further down the road (approx. 225k) Which might explain the desperation but certainly not the venom directed at me. I think its going to take quite a shock to get the attitudes changed.

so sweetly succinct...

i draw great pleasure watching gold fly and the greedy fry.

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  • 311 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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