Guardian - Journey To The Heart Of The House Price Bubble

[terryturbojr]

No, but that is the risk you take buying into one of the biggest and most criminal bubbles in history? One of my criteria for if I ever buy again is "can I sell at close to what I bought for quickly if the desire/need arises?" One benefit of renting is that you can be gone from a house/area in a night if need be. I don`t really care if people are in NE for twenty years, that is their choice and their life, there are ways out of that if they want to take it, legal ways I mean, not silly ways.

There's a big difference between not caring and taking joy from it.

[terryturbojr]

Sounds like you have not endured, as I suspect many others here have, countless sanctimonious patronising holier than thou you don't know what you are talking about and must be nuts property will never fall in price conversations!

Let em crash! YEAH!

If they've been saying it for long enough it won't be them that really suffer. It will be victims , late twenties early thirties, of the house price rises who suffered years of high rents while anyone from a few years their senior through to their grandparents racked up unimaginable amounts of equity only for them to get annihilated whilst said elders just take a cut in that huge unearned wealth.

Hardly worth a cheer.

[Wurzel Of Highbridge]

I agree. I can't see why London is so expensive - it's a dirty, overcrowded sh1thole, I'd never want to live there again. To be fair, most of Britain is a rundown sh1thole though.

I completely agree. I have been back for two days in argubly one of the better and flooded parts of the country and compared to the ROI, the UK is one giant turd fest.

Decay, miserable old people, congestion,. pollution.

You only apreceate these things after getting out of hte country for a couple of years.

[Wurzel Of Highbridge]

At last we no know 2 thing:

What happens when you print £350Billion and to bankers in London.

The people who cause the collapse in 2007 are either stupid or really do want a BIG financial collapse.

Maybe Gordon Brown actually saved us....not them.

It's the same mentality as those currently bidding on stocks and shares. They believe that they have better knoladge than the other participants and they can get out before it collapses. This especially applies to the johnny foreigners 'snapping' up London property. They can also send it to Auction as quickly as they snapped it up.

[dances with sheeple]

There's a big difference between not caring and taking joy from it.

Such as?

[@contradevian]

Some articles coming out now in the Telegraph and Guardian etc. about people in their 40s having to move into shared flats with a bunch of 20 year olds. Also young couples having to lodge with in-laws.

Why I moved out of East London. Declining earnings, and increasing cost of living. I'd rather be 'poorer' and living in the North, than give most of my earnings to a rentier. When you are younger its fun I guess. I'd recommend anyone to live in London for at least a year or two.

I'd had a similar conversation with a mate in the US. He bought outright in Johnstown Ohio (which about four hours from NYC), he bought outright with student loans for a few thousand dollars. Now he is poor, very poor (sometimes no food) but he'd rather live like that, than live in a City and enrich a rentier for ever and still living in relative rented squalor.

Edited February 8, 2014 by aSecureTenant

[TheCountOfNowhere]

I am no EA and rather than shouting this down as lies by EAs it would be much more helpful to put time into understanding where the money is coming from, who is lending it, can any interest rate rises or periods of unemployment be sustained at such price levels?

Here are some sold prices in sw17 where the recent rises are clear

http://www.rightmove...country=england

http://www.rightmove...country=england

http://www.rightmove...country=england

http://www.rightmove...country=england

At last, some facts

I dont doubt for one minute this is happening...im doubting it's happened to the extent the media are saying.

It's all too easy to come on here and say....im buying a house...im selling and had 20 offerds...its booming round my way....my sister sold for double what she paid for it last week.....etc....most of it is B.S.

Outside london I can show you houses i've seen up for sale for 5 years...stuff that;s been sold for 4 months coming back on...sure, there are some silly sale prices at the top end and I think the BTL loonies are snapping up new builds again but is it sustainable...in a word....NO.

[cybernoid]

Fine. Whatever. Many of these are ordinary people trying to lead ordinary lives in an environment with few attractive choices. Meanwhile, my only observation is that glee is distasteful.

You forget the suffering of the financially responsible people who made the responsible choice not to buy something they cannot afford. Those that buy when they cannot afford it price out those more responsible who choose to live within their means.

Now the responsible people are forced to live in rented accommodation with all the insecurities that entails whilst their savings receive no interest so that the irresponsible gamblers can remain in houses they cannot afford. These ordinary people made a choice that directly harms others. What about the innocent victims?

There will be suffering when this corrects. It is better that the financially irresponsible gamblers suffer than the responsible people currently suffering at their hands is it not? Actions that harm society need to have consequences for the longer term good of us all.

[dances with sheeple]

You forget the suffering of the financially responsible people who made the responsible choice not to buy something they cannot afford. Those that buy when they cannot afford it price out those more responsible who choose to live within their means.

Now the responsible people are forced to live in rented accommodation with all the insecurities that entails whilst their savings receive no interest so that the irresponsible gamblers can remain in houses they cannot afford. These ordinary people made a choice that directly harms others. What about the innocent victims?

There will be suffering when this corrects. It is better that the financially irresponsible gamblers suffer than the responsible people currently suffering at their hands is it not? Actions that harm society need to have consequences for the longer term good of us all.

+ 100

[dances with sheeple]

At last, some facts

I dont doubt for one minute this is happening...im doubting it's happened to the extent the media are saying.

It's all too easy to come on here and say....im buying a house...im selling and had 20 offerds...its booming round my way....my sister sold for double what she paid for it last week.....etc....most of it is B.S.

Outside london I can show you houses i've seen up for sale for 5 years...stuff that;s been sold for 4 months coming back on...sure, there are some silly sale prices at the top end and I think the BTL loonies are snapping up new builds again but is it sustainable...in a word....NO.

Exactly, even if it was widespread in London (and I don`t believe it is, outside whatever shithole is the latest "Hip" spot) that doesn`t help the rest of the country, but the media like simple "joy for homeowners" type stories.

[19 year mortgage 8itch]

You forget the suffering of the financially responsible people who made the responsible choice not to buy something they cannot afford. Those that buy when they cannot afford it price out those more responsible who choose to live within their means.

Now the responsible people are forced to live in rented accommodation with all the insecurities that entails whilst their savings receive no interest so that the irresponsible gamblers can remain in houses they cannot afford. These ordinary people made a choice that directly harms others. What about the innocent victims?

There will be suffering when this corrects. It is better that the financially irresponsible gamblers suffer than the responsible people currently suffering at their hands is it not? Actions that harm society need to have consequences for the longer term good of us all.

The people you refer to chose to suffer, the people tomandlu refers to chose not to suffer. How can it be fair to make the second group suffer instead of the former when clearly the first group enjoy the suffering?

[dances with sheeple]

The people you refer to chose to suffer, the people tomandlu refers to chose not to suffer. How can it be fair to make the second group suffer instead of the former when clearly the first group enjoy the suffering?

It is the definition of "suffering" that I take issue with, finding out you can`t really afford the house you are in is not suffering, it is a reality check, lets get the correction moving and get these morons out on their a*rse.

[cybernoid]

The people you refer to chose to suffer, the people tomandlu refers to chose not to suffer. How can it be fair to make the second group suffer instead of the former when clearly the first group enjoy the suffering?

No, one group chose living within their means in the understandable belief that would lead to a better and more secure future.

The second group chose living for today and to hell with the consequences.

The 'powers that be's interests happened to be aligned with actions that benefitted the second group and crucified the first, and so the righteous suffer and the selfish prosper.

That could be temporary. But for now the actions of the selfish 'ordinary people', which in actual fact are a small minority of the population at large, get to dictate how others have to live by pricing them out of the market.

It is better for society at large if the second group suffer, worse if the first group suffer. I have no sympathy for them, and whilst not cackling with glee I for one welcome the time when they get to reap what they have sown themselves instead of living in blissful ignorance of the suffering they have caused other innocent parties.

[19 year mortgage 8itch]

No, one group chose living within their means in the understandable belief that would lead to a better and more secure future.

The second group chose living for today and to hell with the consequences.

The 'powers that be's interests happened to be aligned with actions that benefitted the second group and crucified the first, and so the righteous suffer and the selfish prosper.

That could be temporary. But for now the actions of the selfish 'ordinary people', which in actual fact are a small minority of the population at large, get to dictate how others have to live by pricing them out of the market.

It is better for society at large if the second group suffer, worse if the first group suffer. I have no sympathy for them, and whilst not cackling with glee I for one welcome the time when they get to reap what they have sown themselves instead of living in blissful ignorance of the suffering they have caused other innocent parties.

No, both groups chose living within their means in the understandable belief that would lead to a better and more secure future. One of them backed the wrong horse.

You seem to be making a moral judgement based on your personal values. How much risk is morally right?

Edited February 8, 2014 by 7 Year Itch

[Venger]

The people you refer to chose to suffer, the people tomandlu refers to chose not to suffer. How can it be fair to make the second group suffer instead of the former when clearly the first group enjoy the suffering?

Many of us chose to delay gratification of ownership, as we doubted the financial sustainability of such price/value rises.

Furious levels of HPI, month after month, year after year. On top of decades of HPI, and rising house prices around the world, with implications on Western incomes.

We don't enjoy the suffering. There has been unfair intervention to protect those who over-borrowed and pushed up house prices, and thus locking in market values for the majority of older owners.

Policy has become anti-capitalist with schemes like HTB 1 + 2, in my opinion.

Worst of all, we have to suffer emotional irrational arguments from people like Greg B, and tomandlu, how debtors are just "ordinary families". According to Greg, it would be unfair if some family were to lose their house, sell at a lower price, because they had a drop in income. That's one of the circumstances which brings house prices down. Deal with it Greg.

We're ordinary families too, those of us who chose to rent, but ones who didn't take on more debt that we could service, paying very high sums for ownership. We recognised there had been previous recessions, and that there would be again. Except this time, people are x1millions worse than Gordon Brown, with all their excuses for those who chose to buy.

They chose to buy, and we chose not to. It should be equal, and not just crying for those who might suffer loss in value on ownership. Intervention protecting values for older owners.

Why should renters suffer because many buyers have chosen to bet everything on 1 horse race time over, paying 3/1 every 7 years, with them accustomed to thinking it's a continuous occurrence?

[Bland Unsight]

Fine. Whatever. Many of these are ordinary people trying to lead ordinary lives in an environment with few attractive choices. Meanwhile, my only observation is that glee is distasteful.

Maybe you should change your name to dances on sheeple?

Sorry, you can p!ss off.

"[F]ew attractive choices"!!!!!!!!!!

I'll agree with the idea that house prices are too high, but if you want to move me directly through time back 300 years, or directly through space to some contemporary nation state where blood runs in the street then you can f*ck right off. All choices are attractive to me from here and now. Does that mean that I should be silently complicit in redistributive structures sold under a flag of efficiency? That's a different question.

Crucially these "ordinary people" have been happily gulled into bidding up the price of housing in the South East (and many other parts of the nation besides) to a point where they can no longer afford their houses. The rest of us are forced to tolerate slightly higher rents and much greater economic fragility as a consequence.

If people act like f*cking morons then what harm will come from calling them morons? And how will the magnitude of this harm compare to the harm that they can do when gifted power (by virtue of access to debt) and not identified as morons when they act moronically.

You need to read and think. The 2004 Miles report says it all. Forget prices, forget interest rates. The median consumer looks at their rent and at the introductory period monthly payment on the mortgage and that is all she wrote.

Unless I desert the nation of my birth, to a certain extent, I must live with their choices. I chose to do so, and I accept the apparently inevitable consequences of that choice. But I will not celebrate it, and I will damn it when I choose.

"Many of these are ordinary people trying to lead ordinary lives in an environment with few attractive choices" - a gospel of idiots and bigots, but they are wrong and it matters that they are wrong.

Edited February 9, 2014 by ChairmanOfTheBored

[Bland Unsight]

You forget the suffering of the financially responsible people who made the responsible choice not to buy something they cannot afford. Those that buy when they cannot afford it price out those more responsible who choose to live within their means.

Now the responsible people are forced to live in rented accommodation with all the insecurities that entails whilst their savings receive no interest so that the irresponsible gamblers can remain in houses they cannot afford. These ordinary people made a choice that directly harms others. What about the innocent victims?

There will be suffering when this corrects. It is better that the financially irresponsible gamblers suffer than the responsible people currently suffering at their hands is it not? Actions that harm society need to have consequences for the longer term good of us all.

+1

[Bland Unsight]

I can't believe there is a London bubble. The BOE is being vigilant this time round.

[terryturbojr]

The definition of financially responsible on this thread appears to be having a small enough mortgage that a rise in rates to 10% doesn't hurt and enough equity that you can shrug off a 50% fall in house prices. Dont we already have a word for that group, baby-boomers? Who'd coincidentally would love the rise in rates to 10% as they'd get a lovely return on that £300k savings they got when downsizing.

[tomandlu]

You forget the suffering of the financially responsible people who made the responsible choice not to buy something they cannot afford. Those that buy when they cannot afford it price out those more responsible who choose to live within their means.

Now the responsible people are forced to live in rented accommodation with all the insecurities that entails whilst their savings receive no interest so that the irresponsible gamblers can remain in houses they cannot afford. These ordinary people made a choice that directly harms others. What about the innocent victims?

There will be suffering when this corrects. It is better that the financially irresponsible gamblers suffer than the responsible people currently suffering at their hands is it not? Actions that harm society need to have consequences for the longer term good of us all.

Okay, block-caps, since this doesn't seem to be getting through... I AM NOT SAYING THERE WON'T AND SHOULDN'T BE PAIN FOR OVER-INDEBTED HOUSEHOLDS, I AM SAYING I WON'T BE TAKING ANY PLEASURE IN IT.

[terryturbojr]

Okay, block-caps, since this doesn't seem to be getting through... I AM NOT SAYING THERE WON'T AND SHOULDN'T BE PAIN FOR OVER-INDEBTED HOUSEHOLDS, I AM SAYING I WON'T BE TAKING ANY PLEASURE IN IT.

I think you're fighting a lost cause.

[macbeth79]

One other point, some of them are selling in other parts of the country to fund their deposit, so they are contributing to a price crash in other places in the UK.

Anecdotally the Uni educated ones have given up on the north, lets be honest if you studied digital publish, media, arts, history, the only place that you can potentially get a job is London.

Edited February 9, 2014 by macbeth79

[19 year mortgage 8itch]

Many of us chose to delay gratification of ownership, as we doubted the financial sustainability of such price/value rises.

Furious levels of HPI, month after month, year after year. On top of decades of HPI, and rising house prices around the world, with implications on Western incomes.

We don't enjoy the suffering. There has been unfair intervention to protect those who over-borrowed and pushed up house prices, and thus locking in market values for the majority of older owners.

Policy has become anti-capitalist with schemes like HTB 1 + 2, in my opinion.

Worst of all, we have to suffer emotional irrational arguments from people like Greg B, and tomandlu, how debtors are just "ordinary families". According to Greg, it would be unfair if some family were to lose their house, sell at a lower price, because they had a drop in income. That's one of the circumstances which brings house prices down. Deal with it Greg.

We're ordinary families too, those of us who chose to rent, but ones who didn't take on more debt that we could service, paying very high sums for ownership. We recognised there had been previous recessions, and that there would be again. Except this time, people are x1millions worse than Gordon Brown, with all their excuses for those who chose to buy.

They chose to buy, and we chose not to. It should be equal, and not just crying for those who might suffer loss in value on ownership. Intervention protecting values for older owners.

Why should renters suffer because many buyers have chosen to bet everything on 1 horse race time over, paying 3/1 every 7 years, with them accustomed to thinking it's a continuous occurrence?

You make a risk call, they make a risk call.

What makes our choice right?

[tomandlu]

You make a risk call, they make a risk call.

What makes our choice right?

Shhh...

[@contradevian]

One other point, some of them are selling in other parts of the country to fund their deposit, so they are contributing to a price crash in other places in the UK.

Anecdotally the Uni educated ones have given up on the north, lets be honest if you studied digital publish, media, arts, history, the only place that you can potentially get a job is London.

Not sure about that. My fear is that a waves of 'wealthy' London retiree's could send a wall of money out into the regions.

And in my patch of West Yorkshire,house prices apparently rose 15% last year, though seems very patchy to me, because in the neighbouring area of Holme Valley they fell rather dramatically (-27.8%) but 'Last of the Summer Wine' county was massively overpriced anyway.