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I Don't Believe You - Controversial One!


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HOLA441

Well done marmiteman for posting your views. It won't be long I fear until you are bullied off this board as so often happens. I myself am not a bull either but am sceptical at the predictions of an iminent crash, I would not go so far as to say house prices will never come down but I don't think we'll see anything like the late 80's early nineties again for some time. Of course posting such comments in this forum are akin to entering your local church mid-mass and questioning publically the existence of god.

Perhaps I'll check back in another 6 months when my house is worth £500.

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HOLA442

"but I don't think we'll see anything like the late 80's early nineties again for some time". I have yet to see anyone give a coherent reason why it should be different this time. All I see is the governers of the various central bank's saying it's going to be pretty much the same as every other time.

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HOLA443
Guest Bart of Darkness

Perhaps I'll check back in another 6 months when my house is worth £500.

I'll offer you £480 cash for it!

RE the crash itself: a HPC won't occur in a vacuum. Sterling will devalue, and other important sideeffects will take hold. If a HPC occurs, unemployment will surely rocket. This will have important knock-on effects. So unless your capital is well protected through diversification (ie gold, stocks, cash savings, foreign currencies) there is a significant risk that you could lose the value of everything that you've saved.

Take a look at many of the threads on the investment forum.

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HOLA444

Marmiteman; with you all the way. Why does everyone on here think anyone with a morgage is "struggling financially?" Newsflash people...most people are not struggling.

Also, why do so many automatically think if you have BTL property, then you have MEW'd your main residence? Ever heard of "snowballing" your debt?

Good to see someone else with a point of view. The conspiricy theorists and stock crash predictors were getting just a little to prevalent on here. I was half expecting David Icke to start posting at this rate.

Go for it mate. :D

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HOLA445

Welcome to the Bearpit, Marmiteman.

I agree with you that a crash is not a dead cert, but the things HMG can do to stop it are limited. Yes, of course there are "key worker" schemes and massive house building projects in the SE; but ultimately these can only be a small proportion of the total market, and as far as they go to increase supply are actually more likely to cause than prevent a crash.

More influential things the govt could do would be to rejig the start date of the economic cycle, making it easier for them to carry on borrowing (oh, hang on, they've done that), stuff the MPC with their placemen to vote for rate cuts (oh, hang on ...) or alter the inflation indicators (oh, hang on) to suit their purposes.

IMO our culture of property fetishism means that joe public's faith in the magic powers of the housing market (always up) is very hard to shake off. If all the surveys say that prices are falling this could start to change, but until then there are always likely to be enough mugs to keep the market ticking over.

Despite my scepticism about a crash, the bottom line is that I don't think the market can survive an economic downturn. IMO interest rates are the key. I've been arguing for months that the crux would come when inflation pointed to rate increases and the economic slowdown to rate cuts. If the MPC makes cuts it's possible that we'll all start spending again and rising wages will slowly make property more affordable. But I think it's likely that the wheels are coming off Brown's wagon.

On this site there are a fair number of chart-nerds, conspiracy theorists, ignoramuses and downright ar$eholes, but don't be put off. Even moderate bulls keep us honest.

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HOLA446

RE London house prices: I would contest your assertion Nomadd that houses are not selling in London. I've been doing the rounds in my local estate agents, and I've seen a fair bit of movement. Moreover, every estate agent worth his salt is slavering at the prospect of city bonuses this year - 3000 people getting £500000 plus each in tax free cash to spend. All the prices are going to shoot up in Jan, and perhaps won't come down, if they don't sell their stock, until later next year.

Ah, a "contest". Please let me know how many Rightmove links you would like. Lets take properties that have been on the market at least 3 months and have fallen at least £10k. I have my ammunition ready - do you? I'll even give you until the end of Jan. to come up with properties that have "jumped" in price and sold, or to even show me a huge leap in the number of sales registered.

EA's can "slaver" all they like, but that doesn't mean they get anything. After all, I've been "slavering" at the world's most stunning Supermodels for years, but they haven't knocked on my door...yet. Maybe they will all "jump" on me in Jan.? I promise I will thwack them with my huge, er, bonus. :)

And you say, "All the prices are going to shoot up in Jan, and perhaps won't come down". Now that's really funny. Which EA do you work for? Why are all those properties that haven't sold on Rightmove for a year, even with big price cuts, going to "jump and sell" in Jan.? City bonus? Get real, I've been City based for over 7 years of my IT career, so I think I have a pretty good grasp on City thinking - and it's ain't "Oh my god, I'm going to run out and invest in property in Jan.!"

You are the proud recipient of my second awooga of the day: AWOOGA!!!!! :D:D

Nomadd

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HOLA447

Ah, a "contest". Please let me know how many Rightmove links you would like. Lets take properties that have been on the market at least 3 months and have fallen at least £10k. I have my ammunition ready - do you? I'll even give you until the end of Jan. to come up with properties that have "jumped" in price and sold, or to even show me a huge leap in the number of sales registered.

EA's can "slaver" all they like, but that doesn't mean they get anything. After all, I've been "slavering" at the world's most stunning Supermodels for years, but they haven't knocked on my door...yet. Maybe they will all "jump" on me in Jan.? I promise I will thwack them with my huge, er, bonus. :)

And you say, "All the prices are going to shoot up in Jan, and perhaps won't come down". Now that's really funny. Which EA do you work for? Why are all those properties that haven't sold on Rightmove for a year, even with big price cuts, going to "jump and sell" in Jan.? City bonus? Get real, I've been City based for over 7 years of my IT career, so I think I have a pretty good grasp on City thinking - and it's ain't "Oh my god, I'm going to run out and invest in property in Jan.!"

You are the proud recipient of my second awooga of the day: AWOOGA!!!!! :D:D

Nomadd

Do you only look at Rightmove? If so you are missing a lot of estate agencies.

Rightmove specialise in low to middle range properties. We know that the only property selling is the more desirable, and then only at a realistic price. You are in danger of missing properties that ARE selling by only looking at Rightmove.

When I was selling / potentially buying in London last year and this I hardly ever looked at Rightmove. None of the decent properties I might have offered on were listed.

I see a similar pattern now here in Warwickshire - hardly anything sold on Rightmove but a reasonable turnover in smaller independent (niche?) agencies.

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HOLA448

If I had a pound for every time I have heard the words "there won't be house price crash, because the Government won't let it happen" I would be a rich man. Many people who otherwise think Governments should stay out of economic intervention display a touching faith in its ability to stop a housing bubble popping.

What doesn't occur to anyone is that unaffordable housing is a political risk to the government too. Higher house prices mean higher public sector wage demands. And a generation excluded from house ownership is not likely to vote for the governing party either.

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HOLA449

If I had a pound for every time I have heard the words "there won't be house price crash, because the Government won't let it happen" I would be a rich man. Many people who otherwise think Governments should stay out of economic intervention display a touching faith in its ability to stop a housing bubble popping.

In the interest of balance, I'd like to say that if I had a pound for everytime I heard someone say that house prices will crash, I would be a considawibbly witcher man than youuahh. :ph34r:

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HOLA4410

Sorry, bit of a rush, so this will be a quickie.

Nomadd, two points:

1. I was not inviting you to 'a contest' but rather 'to contest' your assertion. This is a verb.

2. I am not an estate agent. I am a lawyer.

***

To make things simpler, I will summarise my contributions to the debate:

1. I don't think a house price crash is going to happen in the next six months.

2. Even if it is going to happen, I don't think it will be a good thing. (ie general crash=loss of jobs=money worth nothing)

3. I think that the government can take measures to attenuate, postpone, delay, or diffuse a house price crash through Keynesian demand management. This is what they have been doing by creating non-jobs that pay a lot of money.

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HOLA4411

Marmiteman, you're entitled to your opinions. But on point 3, I wonder whether you're right. Keynesian demand management. Yes, there will be rate cuts, as and when the MPC think there's room in the inflation figures. But to put in some bullet points of my own

1. Will rate cuts make much difference? There's massive borrowing anyway, and the slowdown of the last year surely demonstrates that our appetite for credit is pretty much sated.

2. Conventional wisdom has it that cuts take 1 to 2 years to have any effect. What will happen to the market in the meantime?

3. These non-jobs that pay a lot of money - as I understand it Brown's public spending splurge is coming to an end. In other words his published plans show that public spending will be reduced in the next few years. I'm sure someone else can put figures on this, but the point is that another tranche of demand will be taken out of the economy shortly.

The upshot of this is that for a variety of reasons - inflation, debt saturation, govt borrowing, shrinking tax revenues - the scope for demand management is actually rather limited.

NB, most of us on here think that there won't be a crash in the next six months either. Consensus seems to be that there'll be a crash in the next three or four years.

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HOLA4412

Have you ANY IDEA how many people voted for Labour in the last election?

The answer is about 24% of the people eligible to vote. 5.8 million people in this country work for the government so they are going to vote Labour to protect their jobs.

Real people I know, particularly those in business, are very uncomfortable. They know what's coming.

Surely thats just rubbish stats :ph34r: , what makes you think that everyone who is a civil servant is a labour supporter. If that were the case then why did we ever see a conservative one, maybe I was really dreaming through the 80's. The number of people who are eligible to vote is also a complete red herring. Its typical of a stat brought out when the case is weak.

In answer to the original poster, its nowhere near certain a crash will happen. Its statistically much more likely than a boom. You put your hat where you think its going and let the wheel spin. There are only 3 outcomes. Crash,Boom or stagnate. I think a downturn is very likely but when will be factored by other events yet unseen to us. Global Economics is a rear mirror science, you only understand once its happened why it happened. :unsure:

The doom and gloom meisters on here are just as misguided as the I can make £2,000,000 on BTL in 3 years guys. They are gambling big on their choice. Regardless or not if there is a hige crash lots of people will get hurt including those crowing on here about the idiots out there. I know how damagem my endowments and pension is as a resut of the last stockmarket crash and I could see that coming a mile off :D

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HOLA4413

Have you ANY IDEA how many people voted for Labour in the last election?

The answer is about 24% of the people eligible to vote. 5.8 million people in this country work for the government so they are going to vote Labour to protect their jobs.

Real people I know, particularly those in business, are very uncomfortable. They know what's coming.

Labour won last time, despite polling less the 1/4 of the available vote. Given the sady total inadeqaucy of their rivals they will win next time, unless the discomort factor creeps in. My friends, who are strong Labour fans (I can't stand the party, old or new) give persuasive arguments to support all the current policies. I know of no-one who is worrying about the future (perhaps my circle of friends and colleagues is too small!). I see no real evidence of a crash and don't believe there will be one unless we see significant interest rate rises.

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