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Boe Must Limit House Price Booms Says Rics


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I am beginning to question my own sanity. The UK has massive debt levels but rather than to try and reduce the debt the plan seems to be to create even more. It defies economic commonsense.

I begin to wonder whether those leaving the country are the wise ones.

Come on Masked Tulip, its not that bad! O.K. so the time to buy a house was years ago for those in high HPI areas. Also the time to go and live in France/Spain ets was years ago, before the rules were changed by the EU making it harder to work and be in the social system in your adopted country.

So, if the housing market is mad where you are, then move. Its cr*p here ! (East Anglia) . Its worth it though, there are quiet country lanes everywhere, beer is good , life is slower. The natives are friendly and they speak English - sort of.

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350px-Pyramid_scheme.svg.png

We are at level 9 or 10. The housing pyramid needs 50 or 300 million new houses or buyers to kee[p prices up.

IT AINT GOING TO HAPPEN.

They can keep prices up in £ terms just by printing more £ but that doesn't mean that the houses are worth any more in real terms as measured by what £1 will buy. This is not a pyramid scheme in the true sense as it requires only that some people (not an ever increasing number of people) have access to funds to buy at inflated £prices. Get rid of the £ and the game changes.

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You can still rent a house for at least half what it costs to buy it ( round our way ) so you can live and save/invest for the future with none of the worries or costs of home ownership....buying is still dead money.

In Liverpool/Sefton you can buy a house for half what it costs to rent, and it's still too expensive to buy :-(

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Maybe they are looking for an excuse for an immediate interest rate rise.....

I dare say most of the people who will now try and cash in on this BOOM will be disappointed. I am seeing pages of properties being listed at right move around the £700K+ mark....the pensioners want to retire !!! Who's going to buy them though.

Yep, same here. They just don't get it that the mortgages are unaffordable at even these record low IRs.

Madness.

Carney created a massive house bubble in Canada and got a reputation as a golden boy and then a fat salary and property allowance here in the UK. He is, IMPO, simply going to repeat his 'miracle' of a housing bubble and, just like with Canada, IMPO he will move on just as, or just before, it all collapses here.

If Oz or NZ had cheaper houses - i.e. cheaper compared to the UK as they were about 13 or 14 years ago - I would just make the move now and go.

It is very scary and very depressing what is happening here in the UK right now. I am, admittedly, pretty fed up this morning about it all as, no doubt, most of us are. I feel like I am living in that 'Invasion of the Body Snatchers' town where I am the only one who has not yet been taken over.

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I really do not know what to make of this. Is it a cry for sanity or just wanting 5% per annum price rises?

I am seeing asking prices ramped by 20% to 30% in Swanses now - totally out of control and very depressing. Yesterday I saw a house come on for 320K asking close to a house that has been on the market for about 4 years at 250K. Nuts but just one example.

Worse, the number of properties going SSTC is just depressing and worrying. I honestly have no idea where this sudden influx of money has come from. I really despair.

I think a cry for sanity

I heard on the radio that house prices in Wales fell last year.

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I really do not know what to make of this. Is it a cry for sanity or just wanting 5% per annum price rises?

Where do you begin ...

- The misguided notion that houses will just keep rocketing up and up in price ad-infinitum?

- The deluded idea that somehow the government could/should limit the rate of this '100% certain to happen' annual price increase?

Those two propositions are clearly ludicrous, the only glimmer of hope from this unbelievably fatuous statement is ...

- The fact that even the vested interests know that the upwardly manipulated house price market is about to go totally out of control and wreck the economy (again).

When even the people with things to gain from higher house prices are telling you that your interference in the market in order to boost prices is over the top, you know you have gone too far.

Will the idiots in government take the hint - of course not.

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I think a cry for sanity

I heard on the radio that house prices in Wales fell last year.

Fell 2% in Swansea last year but I saw no evidence of that.

There is a flood of SSTC signs currently from one EA firm but, according to their competitors, they more or less stick up SSTC as soon as someone says they are thinking about buying a property... so time will tell.

What I can't deny - and is worrying me - is that I am seeing, as I mentioned above, 20 to 30 percent increases in asking prices. No doubt a HUGE part of this is EAs ramping asking prices to get sellers to go with them rather than with a competitor... but I don't see how it plays out in the long term. My best hope is that it all dies a death this winter... but then the EAs have to try to get those sellers to reduce.

I heard an interesting story last week about one of the Swansea firms.

Allegedly they are ringing up every sngle one of their sellers every week and trying to get them to reduce. One office, close to me, allegedly managed to get just 3 sellers to reduce out of about 40 or 50 calls.

Apparently one of their managers was talking with a rival manager woeing about how hard it is to sell... and the rival manager pointed out that they needed to stop over-valuing. Will they heck? They won't of course.

Interestingly, and worryingly, apparently they have 'Do not contact vendor' or something like that on numerous sellers' details - this is because, so I was told, they have p*ssed off so many sellers by repeatedly asking them to reduce.

But they are the problem. They are the cause.

They give out ludicrous asking prices to get people to put their houses on the market and then they are faced with being unable to sell enough properties to cover their expenses. But the sellers are apparently telling them things like "Your problem - that is what you told us it was worth!".

I simply no longer know what to make of things.

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It would be better for everyone if they stopped trying to 'fix' the flipping housing market. If RICS/VI's are now proposing damping down HPI then they'll expect the BOE to stop HP deflation.

The way we're going the Government might as well just price all houses, that way they can fully control the property market, e.g. I want to sell up, I go to the Council to get my property valued, that's what I can sell it for; no more/no less. This way they can fully control HPI... simple but total madness (so no change there then)

This reminds me of the late 80's when they declared that MIRAS was being scrapped 6 months before the date this was to be implemented, people went nuts to buy before the date MIRAS was to be scrapped; now we have a rush to buy before HTB2 kicks in and house prices become much less affordable. This ain't going to end well

edit- typo, I can't smell property

Edited by ReggiePerrin
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This reminds me of the late 80's when they declared that MIRAS was being scrapped 6 months before the date this was to be implemented, people went nuts to buy before the date MIRAS was to be scrapped; now we have a rush to buy before HTB2 kicks in and house prices become much less affordable. This ain't going to end well

Good point.

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Eh? How do RICS suppose the 'independent' BoE could deliver this request then?

http://www.bbc.co.uk/news/business-24066371

"The Bank of England should use its powers to limit house price increases to 5% a year to "take the froth out" of price booms, a surveyors' group says. The Royal Institution of Chartered Surveyors (Rics) said that a 5% annual rise should trigger caps on how much people could borrow relative to their incomes or the value of the property."

Is it even possible to make a profit in BTL with HPI at 5%?

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RICS probably worried about their members getting sued for over valuing when it hits the fan in London /SE and there is Red ink all over the Banks (again).

Also as other have said: If prices keep rising like they have in London then transactions will have to go down at a some point in the not to distant future as so few will be able to afford the repayments.

Edited by koala_bear
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It actually looks like just more ramping to fuel the "house prices are going up" media frenzy. It's so relentless that even I start to believe it..... until I look on Rightmove for my area of the South East and see that asking prices are continuing to fall.

To put that in perspective.

Data: She brought me closer to humanity than I ever thought possible, and for a time...I was tempted by her offer.

Jean-Luc Picard: How long a time?

Data: Zero-point-six-eight seconds, sir. For an android, that is nearly an eternity.

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Is it even possible to make a profit in BTL with HPI at 5%?

If you can buy a property on leverage and have your tenants pay the resulting mortgage for you leaving you owning it free and clear after 20/25 years then you'd be very hard pressed to lose out in the longer term.

In the short term, you can certainly lose big if you buy at peak and then are forced to sell after the market crashes and your cashflow dries up - especially if you geared up to buy it.

I guess it boils down to are you willing to take the risk (and take the hassle and responsibility of being a landlord).

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Bring it on.

Indeed. The last three years have been a stalemate with regard to prices. Very dull. A rapid acceleration now makes a crash in the near future more likely than it had been IMO. Good to see the amount of criticism that HTB has attracted and now lots of media discussion of bubbles. Many people want HPI, but they want to feel it has come at the hand of the free market rather than govt meddling. Poor analogy but the current HPI gains are like winning an Olympic medal knowing that many countries have boycotted the games.

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Yesterday, a self-employed friend worried about his future pension was talking about getting a small BTL.

I tried to advise him against it but his argument was that bricks and mortar is something substantial where shares were not.

I suspect there are plenty of people thinking like him.

Utterly absurd. Shares are what give bricks and mortar value.

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If you can buy a property on leverage and have your tenants pay the resulting mortgage for you leaving you owning it free and clear after 20/25 years then you'd be very hard pressed to lose out in the longer term.

In the short term, you can certainly lose big if you buy at peak and then are forced to sell after the market crashes and your cashflow dries up - especially if you geared up to buy it.

I guess it boils down to are you willing to take the risk (and take the hassle and responsibility of being a landlord).

most yields I see are sub 5% gross. Take out costs, voids and mortgage interest. Better off buying a Housa from castle trust.......

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  • 433 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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