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macfarlan

Housing Market Reaches Plateau Say Surveyors

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The two articles tie up.

First time buyers on average have less cash+mortgage available than second steppers, so prices are reducing to first time buyer levels.

No China money in London = No London Sales = No cashing out of London = First time buyers left?

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Detail basically says London is drying up.....

..............but..............

..........the rest of the country will catch up with London.

Yawn.

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Link here

meanwhile in other news, First time buyers in July at highest level since 2012

Something for everyone there eh?

..'plateau' is a bit of an understatement .... :rolleyes:

"Number of sales agreed last month fell for first time in nearly two years according to the Royal Institute of Chartered Surveyors"
Edited by South Lorne

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Detail basically says London is drying up.....

..............but..............

..........the rest of the country will catch up with London.

Yawn.

I love the way the VI's say the rest of the country will catch up with London. The question I ask is how?

  • Relax lending criteria?
  • Wage inflation?
  • Lower interest rates outside of London?
  • Help-to-buy-outside-London?

It's wither wishful thinking or they honestly believe that property outside of London is undervalued and people are willing and able to pay more.

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I love the way the VI's say the rest of the country will catch up with London. The question I ask is how?

  • Relax lending criteria?
  • Wage inflation?
  • Lower interest rates outside of London?
  • Help-to-buy-outside-London?

It's wither wishful thinking or they honestly believe that property outside of London is undervalued and people are willing and able to pay more.

These are exactly the questions I ask whenever I see predictions of average house prices being £700,000/£900,000/£1m in 3/5/9 years etc. There is never an explanation of where the money to afford such prices is going to come from. The only thing I can think of is if the cycle is fuelled by BOMAD selling/downsizing their over-valued properties, allowing them to give a larger deposit to allow their children to afford an even more over-valued property, and so on. Plus middle class foreigners continuing to invest in property without caring where it is. But there isn't enough money for that to continue forever. Surely...

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These are exactly the questions I ask whenever I see predictions of average house prices being £700,000/£900,000/£1m in 3/5/9 years etc. There is never an explanation of where the money to afford such prices is going to come from. The only thing I can think of is if the cycle is fuelled by BOMAD selling/downsizing their over-valued properties, allowing them to give a larger deposit to allow their children to afford an even more over-valued property, and so on. Plus middle class foreigners continuing to invest in property without caring where it is. But there isn't enough money for that to continue forever. Surely...

Don't worry, if the money starts to run out, they will just make some more!

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..'plateau' is a bit of an understatement .... :rolleyes:

Ignore, thought the above comment was reference volume not price, my bad.

Original comment:

If something goes up for 23 months sequentially and in month 24 goes down a little bit sequentially then odds on it is still higher than the first 21 or 22 months in the sequence.

Edited by bankstersparadise

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I love the way the VI's say the rest of the country will catch up with London. The question I ask is how?

  • Relax lending criteria?
  • Wage inflation?
  • Lower interest rates outside of London?
  • Help-to-buy-outside-London?

It's wither wishful thinking or they honestly believe that property outside of London is undervalued and people are willing and able to pay more.

You are right, none of the above will happen anytime soon. I guess policy targeted ex London is a possibility. (Capping the salary multiples of the incremental mortgage book at 4.5x is a policy targeted at slowing London lending and accelerating provinces, openly admitted by the BofE, but quite a minor adjustment).

The only game in town is the "ripple" effect. But for this to happen prices in London need to not crash but just plateau, very difficult to achieve. Therefore London house price bubble to my mind creates systemic risk to the whole housing market, UK banking system.

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I occasionally receive property particulars via email, however recently I've noticed them increase in volume. Today alone Ive received 9 emails enticing me to book a viewing. Perhaps the EA's are getting a little desperate!

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I know of people who have recently turned down 6-figure salary jobs in London.

Why? Well, after taxes most of their wages are going on rent. Or they have the option of mortgaging themselves to the hilt and praying to God that they never get fired and that their HP never falls.

Why take the risk? What take on the stress? Not worth it.

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I know of people who have recently turned down 6-figure salary jobs in London.

Why? Well, after taxes most of their wages are going on rent. Or they have the option of mortgaging themselves to the hilt and praying to God that they never get fired and that their HP never falls.

Why take the risk? What take on the stress? Not worth it.

Even the buskers earn more than that in London.

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Yes they had. They deferred to Phil to decide on their best and final. FML

I didn't catch it all. Impression was Phil said you might as well take it to £500,000 and get a 2 bed.

there are going to be a lot of people seriously screwed if this topples.

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It was very sad. He was actually a great economist and went to great trouble to try and work out how he went wrong. He came up with the first analysis of debt deflations in the English speaking world. And in that way, the fact he was so wrong and now remembered for it, spurred him on to greater heights.

"Debt Deflation Theory of Great Depressions"

http://fraser.stlouisfed.org/docs/meltzer/fisdeb33.pdf

The anti-Krugman in many respects. And Minsky's greatest inspiration alongside Keynes. Unlike the majority of economists, Fisher, Keynes and Minsky had immense first-hand experience of the the stock market and banking. I believe it was this practical understanding of the centrality of money and debt in an economy that led to the insights for which each is acclaimed. It's simply unfortunate that Keynes' name is now so closely associated with those who came after him and grossly misrepresent his ideas. Keynesianism haunts Keynes in the same way that Fisher's reputation is haunted by that quote.

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just saw 5 minutes of Location Location.

£460,000 for a 1 bedroom flat in Brixton.

Insane. People have completely lost their marbles.

I saw that and sat open mouthed all the way through the show.

Looked like a squat on the ground floor.

Mind they had a share of a patch of overgrown, rubbish strewn garden

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It was very sad. He was actually a great economist and went to great trouble to try and work out how he went wrong. He came up with the first analysis of debt deflations in the English speaking world. And in that way, the fact he was so wrong and now remembered for it, spurred him on to greater heights.

"Debt Deflation Theory of Great Depressions"

http://fraser.stlouisfed.org/docs/meltzer/fisdeb33.pdf

Although I've not read that link you've posted up, a few weeks ago at another source I reminded myself of his wisdom-after-the-event learnings, and still did not agree with him.

The economy was riddled with complacency and entitlement, same as now.

Can you imagine a major newspaper (much less the leaders of a country) saying that stocks fell because objective conditions no longer supported their further rise? Has it ever been recognised politically that a market has topped out? Or that an economy needed to go through a painful slump to facilitate a transition and shake out dead wood. In every case of which we know, politicians have continued to pretend that all was well long after events provided impressive evidence to the contrary.

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Not in London, but the psot-MMR period saw a young couple from my local village (North Yorks coast) buy an OK bungalow for about 200K.

He's always between not very good jobs - quite an achievement at 27.

She works two part-time jobs - 20 hours in a shop and some nights at a local restaurant - summer only.

Oh they have a kid too.

I would put that at about 9 - 10 household income.

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When - not if.

that's the problem isn't it? How long can you put your life on hold? I am convinced whoever is in power will do everything possible to prop the ponzi up. Capitilism died in 2009.

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How long can you put your life on hold?

Two more years I'd say. If we don't see the nominal price drops in that timeframe then surely time to pack up and activate plan B or C.

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