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If 2006 Doesn't Show Significant Falls

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Again the pressure is on to buy from an impatient partner.

2006 is my "Trump card" so to speak, but if solid evidence that property is a losers investment doesn't come by late Autumn next year I'll be cornered in to buying by the girlfriend.

It doesn't matter what I say or what I show her (thread wise from here) she is of the mindset that she wants to be in her OWN place by Xmas 2006.

Anyone else in this situation?

I need significant results in 2006 as much as I need and want the crash itself.

I'm running short on time. :(

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It doesn't matter what I say or what I show her (thread wise from here) she is of the mindset that she wants to be in her OWN place by Xmas 2006.

Has she been watching too many decorating TV shows?

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I'm in the reverse situation in that I have two properties that I need to sell before 2007 as I am moving my company abroad. But this weekend I have been giving alot of thought to the 2006 market and how it should influence my decision on when to sell. Obviously, if one considers the fundamentals of the housing market then it seems a significant correction is inevitable. But... I think we have had a cultural shift of what constitutes affordability and what is an acceptable level of debt. The old norms on these parameters have been re-written and, whether the inmates of hpc.co.uk think this is wise or not, people simply have no reservations about borrowing more money to fund housing. I also think that, as never before, home ownership and 'investing' in property is deeply ingrained in our national culture and reinforced by the mass media. For these reasons I think the market is more resistant to a fast crash than the underlying numbers would suggest.

So where will the market be in November 2006? Well, I'll stick my neck out and make a prediction and say 10% down YoY from now. Anybody else care to join me in making a twit of myself with a prediction we can unearth 12 months from now for purposes of derision?

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So where will the market be in November 2006? Well, I'll stick my neck out and make a prediction and say 10% down YoY from now. Anybody else care to join me in making a twit of myself with a prediction we can unearth 12 months from now for purposes of derision?

Nope

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Damn.. the VI press is strong..

I am seeing significant falls already in Devon..

Not across the board but in areas and property types, the old chesnut of the new build flats should show significant falls across the the country by now.

Essentially higher interest rates will set the pace and certainty of the slide, they are going up in Europe and America already, and only the nieve or the desperate will try and convince you that we will not be following the same route...

We have to, Brown is selling guilts to increase the borrowing as he is out of money.. investores will need a good return against those guilts or they will head dollar wise.

The americans have promissed higher interest rates then we have now... if they achieve higher rates then us you sill see the pound struggle badly..

More so now we have to have massive borrowing against the pound..

Believe it or not people have always been tempted to borrow long term mortgage debt based on current affordability.

Understandable when rates are high as that impacts you immediatly... But when rates are low they borrow more.. much more.. over 25 years.

Even on low interest rates people are struggling..

and with inflation so low this mortgage debt will hit hard for years..

It used to be customary to struggle for a few years until inflation made the repayments easier.. then wait a few more years until inflation erroded the debt further and you were able to move up the property ladder.

This was the sole housing market engine.. it ran it for many years.

Now, with low inflation this engine is broken and instead of borrowing less to counteract this.... Much more has been borrowed.. and people will not see their much higher debt erroded over time by inflation..

Never has there been such a bad time to embrace the level of debt people are tripping over themselves to take on..

Stand your ground.

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Well, I'll stick my neck out and make a prediction and say 10% down YoY from now. Anybody else care to join me in making a twit of myself

10% is a fair whack for just one year...

Personally, I think the whole market is now Interest Rate sensitive as never before. A few relatively small rises in rates, should cause a much more recognisable slide. :D

If rates stay where they are, then I think this situation of stagnation/real-terms falls may well carry on for the next 12 months.

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10% is a fair whack for just one year...

I think a large part of that 10% correction has already been priced into the market but is yet to show up in the figures as many sellers are hanging on and not facing reality.

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Again the pressure is on to buy from an impatient partner.

2006 is my "Trump card" so to speak, but if solid evidence that property is a losers investment doesn't come by late Autumn next year I'll be cornered in to buying by the girlfriend.

It doesn't matter what I say or what I show her (thread wise from here) she is of the mindset that she wants to be in her OWN place by Xmas 2006.

Anyone else in this situation?

I need significant results in 2006 as much as I need and want the crash itself.

I'm running short on time. :(

Yep, Mr Geranium wants to put down roots in Spring 2006.

In Central/North London the market was extremely weak in Autumn 2004 and Spring 2005 but confidence has picked up a bit since, what with the 25bp rate cut and talk of City bonuses. The ridiculously overpriced stuff (Foxtons) is still on the market, after almost a year in some cases. However, the rest has been mopped up. I'm just hoping the upturn in sentiment proves to be short-lived.

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Tricky one. I reckon that 2006 will show 5% falls YoY by the end of December. However this will mask bargains in certain parts of the country. I suppose it depends where you are planning to buy.

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I'm in the reverse situation in that I have two properties that I need to sell before 2007 as I am moving my company abroad. But this weekend I have been giving alot of thought to the 2006 market and how it should influence my decision on when to sell. Obviously, if one considers the fundamentals of the housing market then it seems a significant correction is inevitable. But... I think we have had a cultural shift of what constitutes affordability and what is an acceptable level of debt. The old norms on these parameters have been re-written and, whether the inmates of hpc.co.uk think this is wise or not, people simply have no reservations about borrowing more money to fund housing. I also think that, as never before, home ownership and 'investing' in property is deeply ingrained in our national culture and reinforced by the mass media. For these reasons I think the market is more resistant to a fast crash than the underlying numbers would suggest.

So where will the market be in November 2006? Well, I'll stick my neck out and make a prediction and say 10% down YoY from now. Anybody else care to join me in making a twit of myself with a prediction we can unearth 12 months from now for purposes of derision?

I understand exactly what your saying, but I still think it will correct like every other over bought market has always done, be if housing or the financial markets. When every body has bought the market , it has no where else to go but down, until it is considered there is value in the market once again. If a raising market was never to correct, the market would cease to function as you would have no one prepared to sell the market.

Now getting the timing right or the depth of the correction, thats the hard part. But I'll go with 10% in 12 months. Purely because I'm a sucker for entering guess what threads Predict the bottom thread May 2005 :rolleyes:

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As people are saying they will give up in 2006 it makes me think we will only see small falls, 3->5% in 2006. When Bears turn bullish it means the market is crashing, and the ones that didnt buy in the trough are doing the inevitable and buying just after the peak.... You just have to look at the hometrack graphs and inflation edjusted graphs to see this correction is occuring (slowly :P)

The bulls can see the market has changed, some will get out at the right time, others will be too late..

Edited by moosetea

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Again the pressure is on to buy from an impatient partner.

2006 is my "Trump card" so to speak, but if solid evidence that property is a losers investment doesn't come by late Autumn next year I'll be cornered in to buying by the girlfriend.

It doesn't matter what I say or what I show her (thread wise from here) she is of the mindset that she wants to be in her OWN place by Xmas 2006.

Anyone else in this situation?

I need significant results in 2006 as much as I need and want the crash itself.

I'm running short on time. :(

I'm afraid to say I think you'll be dissapointed, I think 2006 will by and large be contiuned stale mate with some localised panics, alot of vendors will be taking property back off the market i.e. in denial. It'll be 2008 that I think the crap will really start to hit the fan.

Go and take a look at the Moneyweek website, in the archived articles you should be able to find one of the outlook for UK house prices. Shove it under your partners nose

;)

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Again the pressure is on to buy from an impatient partner.

2006 is my "Trump card" so to speak, but if solid evidence that property is a losers investment doesn't come by late Autumn next year I'll be cornered in to buying by the girlfriend.

It doesn't matter what I say or what I show her (thread wise from here) she is of the mindset that she wants to be in her OWN place by Xmas 2006.

Anyone else in this situation?

I need significant results in 2006 as much as I need and want the crash itself.

I'm running short on time. :(

I feel sorry for young people in your position.

Ask your girlfriend how you are ever going to be able to afford to move up the market. Is she happy to live in a flat for the rest of her life? If she isn't and house prices do not 'correct', you are going to have to move abroad if you want a reasonable quality of life.

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The number of realists on here does seem to be increasing by the day at the moment.

On a national level, I think prices will continue to stagnate - local situations may differ a bit though.

I just can't see where the downward pressure on house prices is going to come from. The consensus of professional pundits is that growth in the economy will pick up next year, so its likely employment will stay high and wages will increase another 3% or so.

That leaves us all clutching for the IR rise to force a problem for people - given that there are forces pushing both up and down, they are likely to stay at 4.5%.

We will all have to wait until after Xmas, before we can take the 'pulse rate' again with any confidence.

By early Jan, we will know how spending has gone over Xmas and also when the bills have to be paid on those credit cards by February. By then we should also know whether the winter has been cold etc for the effect on gas and oil prices and also IRs in Euroland and the US.

For me, predictions are off until next Feb/March. Until then I'll stand by my prediction of stagnation in house prices until October 2006.

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The number of realists on here does seem to be increasing by the day at the moment.

On a national level, I think prices will continue to stagnate - local situations may differ a bit though.

I just can't see where the downward pressure on house prices is going to come from. The consensus of professional pundits is that growth in the economy will pick up next year, so its likely employment will stay high and wages will increase another 3% or so.

That leaves us all clutching for the IR rise to force a problem for people - given that there are forces pushing both up and down, they are likely to stay at 4.5%.

We will all have to wait until after Xmas, before we can take the 'pulse rate' again with any confidence.

By early Jan, we will know how spending has gone over Xmas and also when the bills have to be paid on those credit cards by February. By then we should also know whether the winter has been cold etc for the effect on gas and oil prices and also IRs in Euroland and the US.

For me, predictions are off until next Feb/March. Until then I'll stand by my prediction of stagnation in house prices until October 2006.

I can't buy into this stagnation theory. Stagnation causes falling prices - or no sales. Where I live the market has been very quiet for about 2 years now.

I've posted this elsewhere. A 4 bed detached I drove past every day for a year since it went on the market at the beginning of 2004 kept it's For Sale board for exactly a year. It was 565k and, as far as I know, they never dropped the price. In Jan 2005 it sold. LR figures show it sold for £469k.

New build flats round here - 15% discount offered the minute you walk into the sales office.

What are these if they are not price falls?

Answer - who knows. The house that sold for 469k probably sold for 200k last time it changed hands - the new flats ... well the only benchmarks are other flats that have sold recently.

I can show you two blocks of flats on the land registry.

One is a block of 8 - first one went at 255k, 4th one went - a year later - for 215k, the other 4 have never sold.

Another block - they have 5 sales so far out of 18 units - starting at 235k - going down to 210k. Says 90% sold on the board outside!

The whole picture is muddied by the amount of overpriced cr@p on the market that never sells and at least 3 massive industries (EAs, Lenders and the Media) determined to keep the bubble inflated.

Edited by Marina

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The whole picture is muddied by the amount of overpriced cr@p on the market that never sells and at least 3 massive industries (EAs, Lenders and the Media) determined to keep the bubble inflated.

Ok, "You can't buck the market(s)".

They are giving it a good shot though and don't forget the most important VI in all this, HM Government and within that, arguably the most important VI, the Chancellor.

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I'm in the reverse situation in that I have two properties that I need to sell before 2007 as I am moving my company abroad. But this weekend I have been giving alot of thought to the 2006 market and how it should influence my decision on when to sell. Obviously, if one considers the fundamentals of the housing market then it seems a significant correction is inevitable. But... I think we have had a cultural shift of what constitutes affordability and what is an acceptable level of debt. The old norms on these parameters have been re-written and, whether the inmates of hpc.co.uk think this is wise or not, people simply have no reservations about borrowing more money to fund housing. I also think that, as never before, home ownership and 'investing' in property is deeply ingrained in our national culture and reinforced by the mass media. For these reasons I think the market is more resistant to a fast crash than the underlying numbers would suggest.

So where will the market be in November 2006? Well, I'll stick my neck out and make a prediction and say 10% down YoY from now. Anybody else care to join me in making a twit of myself with a prediction we can unearth 12 months from now for purposes of derision?

I reckon apprrox 5% falls per annum average over the next 3 years. A bit more this year (10%?) if compulsory pension savings are introduced.

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I think we will see around 3% falls. With inflation the 'real' falls will be slightly higher, but I think it will be less than 10%

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I can't buy into this stagnation theory. Stagnation causes falling prices - or no sales. Where I live the market has been very quiet for about 2 years now.

I've posted this elsewhere. A 4 bed detached I drove past every day for a year since it went on the market at the beginning of 2004 kept it's For Sale board for exactly a year. It was 565k and, as far as I know, they never dropped the price. In Jan 2005 it sold. LR figures show it sold for £469k.

New build flats round here - 15% discount offered the minute you walk into the sales office.

What are these if they are not price falls?

Answer - who knows. The house that sold for 469k probably sold for 200k last time it changed hands - the new flats ... well the only benchmarks are other flats that have sold recently.

I can show you two blocks of flats on the land registry.

One is a block of 8 - first one went at 255k, 4th one went - a year later - for 215k, the other 4 have never sold.

Another block - they have 5 sales so far out of 18 units - starting at 235k - going down to 210k. Says 90% sold on the board outside!

The whole picture is muddied by the amount of overpriced cr@p on the market that never sells and at least 3 massive industries (EAs, Lenders and the Media) determined to keep the bubble inflated.

Thats why you need to look at the statistics and the big picture - individual anecdotes count for nothing. There are properties around me that have been on sale for ages and others which have had price reductions - but so what, they are all over priced from last year by 20%. Hence they won't shift. Price it the same as last year and properties are selling.

Just look at the Land Registry - sales are 80% of what they have been for the past 3 years, but they are back to the 2000/2001 level. Seems this isn't a crash but things are returning to a more normal level of transactions.

Equally, prices aren't going up, but they aren't falling either. Take the average of all the surveys from Hometrack, FT, ODPM, Land Reg, Halifax and Land Reg - its seems prices have gone up a couple of %.

It seems we are now 18 months into the soft landing - if it looks like one, then just accept it is one and its likely to continue for a while yet.

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Thats why you need to look at the statistics and the big picture - individual anecdotes count for nothing. There are properties around me that have been on sale for ages and others which have had price reductions - but so what, they are all over priced from last year by 20%. Hence they won't shift. Price it the same as last year and properties are selling.

Just look at the Land Registry - sales are 80% of what they have been for the past 3 years, but they are back to the 2000/2001 level. Seems this isn't a crash but things are returning to a more normal level of transactions.

Equally, prices aren't going up, but they aren't falling either. Take the average of all the surveys from Hometrack, FT, ODPM, Land Reg, Halifax and Land Reg - its seems prices have gone up a couple of %.

It seems we are now 18 months into the soft landing - if it looks like one, then just accept it is one and its likely to continue for a while yet.

I agree with you IMupNorth. I think that prices aren't going to change much either way under their own momentum. I think a trigger is needed more than ever to budge them, e.g. a change in IRs (either direction); significant new taxes e.g. council, government or compulsory savings.

If this was going to crash under its own momentum, falls would have been more significant by now.

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I'm in the reverse situation in that I have two properties that I need to sell before 2007 as I am moving my company abroad. But this weekend I have been giving alot of thought to the 2006 market and how it should influence my decision on when to sell. Obviously, if one considers the fundamentals of the housing market then it seems a significant correction is inevitable. But... I think we have had a cultural shift of what constitutes affordability and what is an acceptable level of debt. The old norms on these parameters have been re-written and, whether the inmates of hpc.co.uk think this is wise or not, people simply have no reservations about borrowing more money to fund housing. I also think that, as never before, home ownership and 'investing' in property is deeply ingrained in our national culture and reinforced by the mass media. For these reasons I think the market is more resistant to a fast crash than the underlying numbers would suggest.

So where will the market be in November 2006? Well, I'll stick my neck out and make a prediction and say 10% down YoY from now. Anybody else care to join me in making a twit of myself with a prediction we can unearth 12 months from now for purposes of derision?

I`d agree wth just about all of this.

;)

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I think the idea that HPs would soar and then collapse in equal proportions is simply nonsense. There was/is bound to be a plateau period when everyone thinks things are hunkey dorey and, of course, we enter the denial phase. This period will last some considerable time but eventually, like all bubbles in the past, the downward run will begin... and it will gather speed.

I was watching Panorama last night looking at the deflationary costs within the EU and how the former Soviet bloc countries are now under-cutting the 'old' EU countries in terms of costs. There are huge deflationary pressures on us currently but, at the same time, commodities are bringing huge inflationary pressures. In either circumstances, HPs at their current level are simply too expensive.

If inflation soars and IRs are raised to control it then HPs will collapse. If IRs are reduced because of global deflationary pressures then HPs are, again, simply too expensive - wages will never 'erode' the enormous debt of mortgages 'purchased' in the past 4 years.

They created this HP bubble on a global basis. The rigged the system - i.e. pulling HPs out of the inflation indexes - so that the World will not go into recession post 2001. Great, it worked short-term but, in the coming years, all the debt will have to be paid back. It is going to get nasty IMPO.

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  • 302 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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