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House Prices Will Rise By 30% In Five Years, Rightmove Says

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FFS, my wife keeps finding these kinds of puff pieces in the assorted press and showing them to me with a worried look on her face. I keep telling her its all nonsense, and who on earth could afford those prices, but it's hard to keep the faith with this constant onslaught of bullish property-only-ever-goes-up articles.

Sounds very authoritative too:

The report claims to be “the most comprehensive house price forecast of its kind ever created, based on property and economic data rather than opinion and short-term market factors. It takes into account both asking and sold prices, surveyor valuations and analytics from the Oxford Economics’ global, industry and regional forecasting models.”

Lawd, give me strength...

(apologies if already posted)

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"rightmove says"

a company whos entire interest is in them going up. Less a puff piece more panic propaganda after what is starting to come out elsewhere.

Its hilarious watching panic set in. can you smell it? the fear?

:)

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The report claims to be “the most comprehensive house price forecast of its kind ever created, based on property and economic data rather than opinion and short-term market factors. It takes into account both asking and sold prices, surveyor valuations and analytics from the Oxford Economics’ global, industry and regional forecasting models.”

So they admit that all the previous predictions have just been a load of VI rubbish based on VI rubbish. That one will be as well then.

John Walker

John Walker is Chairman of Oxford Economics, which he founded in 1981.Chairman

Experience

From 1973 to 1977, John worked in the UK Treasury, where he became an economic adviser in the short-term forecasting division. He then worked for the consultancy arm of The Economist Newspaper, before becoming a Special Adviser to the EEC Commission in Brussels in 1980, where he was co-ordinator of forecasts for all the EEC countries and related forecasts for the US and Japan

Similarly

Adrian Cooper

Adrian Cooper is responsible for coordinating and managing Oxford Economics’ global economic analysis, forecasting and consultancy activities, and overseeing its team based in Oxford, London, Belfast, Paris, New York, Philadelphia, Singapore, and the UAE. He has led Oxford Economics’ work on a wide array of consultancy projects, ranging from policy advice to government departments in Europe, the US, Africa, and Asia to detailed analysis of the economic impact of particular industries and investment proposals.

Experience

Adrian spent the first seven years of his career with HM Treasury, England. During this time, he worked on the analysis of tax and other economic policy changes as part of the preparations for the UK Budget. He was also the coordinator of the government's macroeconomic forecast for two years.

What are the chances that they would ever produce a report saying that house prices are going to fall. Fall or rise they'll still get paid.

Edited by billybong

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I'd love to see the model they use.

If I accept their arguments then it means that bog standard ex-council houses like this

http://www.rightmove.co.uk/property-for-sale/property-32437785.html

Will rise in price to around the £400k mark.

I'll even accept the mortgage rates will stay at a historic low for the entire length of the 25 year term.

So a £370k mortgage will cost £1759 a month (at 5% would be £2169)

I'll even say that a professional couple enjoying a massively high household income of £70k (look up the stats if you don't think this is high) split evenly between 2 earners, who never have children or periods of redundancy and manage to save £30k whilst renting (for the deposit) plus are able to raise a mortgage of £370k on a £70k income (over 5x household income).

This "perfect" house buying couple would still be spending 50% of their income on a bog standard house. There aren't that many of these type of couples around.

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Well, they went up by 30% in less than 2 years in London. What's to really stop them going up by 30% more in 5 years? UK housing seems to defy all logic so all bets are off.

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Here's what's amazing.

If the energy companies said they were going to hike prices by 30% over the next 5 years (which they'll probably do, given their track record), Labour would respond by threatening to cap electricity prices, and the Tories would threaten new regulations (that don't really do very much).

But 30% house price inflation? Oh, we'll bung the youngsters a 20% loan and a 20% discount.

Quite frankly, if we lived in saner, fairer times, this report would be a wake-up call to politicians that there is a huge problem with our housing "market".

Instead, no doubt politicians will see it as a signal to stuff themselves with larger property portfolios.

Shameful.

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https://

www.oxfordeconomics.com/rightmove/overview

The combined expertise of Rightmove and Oxford Economics creates a robust and complementary dataset, and on this foundation Oxford Economics have built a model that provides a five year view of prices down to postcode level, split by property type. Data will be updated on a quarterly basis and will be made available by Rightmove and Oxford Economics to a wide range of clients, including investors, house builders, housing associations, mortgage lenders and government.

It just makes investing so easy and straightforward and it certainly hits investing in stocks and shares for six. Pile in.

Just check your postcode and property type and work out how much you're going to make.

(this is not investment advice - just in case)

Edited by billybong

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Why 30%? Why not 35%, 40% or 50%?

'Cos the model says so. And models are always right, apart from the times they're not. That's over 5% a year, which extrapolated over 30 years is a 332% increase. No doubt wages will have gone up by that amount as well, I'm sure, and first time buyers will be getting assistance from the Bank Of Kidney and Liver Extractions.

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"rightmove says"

a company whos entire interest is in them going up. Less a puff piece more panic propaganda after what is starting to come out elsewhere.

Its hilarious watching panic set in. can you smell it? the fear?

:)

SUrely they make more from quantity as opposed to price.

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Well, they went up by 30% in less than 2 years in London. What's to really stop them going up by 30% more in 5 years? UK housing seems to defy all logic so all bets are off.

Hmm. For starters, how about chronic malinvestment coming back to haunt HPI 'not earning anything in the bank' capital and yield chasers - against a background of global monetary tightening?

A Senior Research Fellow I know of at Oxford University recently got a mortgage from an offshore private bank to buy a house in prime London at £2,300,000 (from elderly downsizers) almost directly opposite his own near identical house. Went on the rental market 30 days later, with just the furniture removed, and hung there at a 1.9% yield for 40 days before rental listing removed.

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While they're at it maybe Oxford Economics could rubber stamp some Stock Prediction Software systems such as included in the typical list below.


http://

blog.mercury-rac.com/2007/11/13/a-long-review-of-prediction-market-software/

That would be helpful.

A few stock selections would be good as well - they don't have to restrict themselves to Penny Stocks or anything - just as long as they're certainties.

Edited by billybong

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Hmm. For starters, how about chronic malinvestment coming back to haunt HPI 'not earning anything in the bank' capital and yield chasers - against a background of global monetary tightening?

The real question is, where are the people at the bottom of the Property Ponzi Scheme supposed to find this extra 30% to buy a house... or rather, rent their home from a bank for 30 years? With interest rates at rock bottom levels already, it's going to mean a 30% bigger monthly mortgage payment, or else some other exotic scheme to make it more "affordable" for them.

I think this farce might continue until the bottom of the Ponzi pyramid collapses; which might only happen when the government stops coming up with "schemes" to "help" them onto the Ponzi ladder.

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Rightmove and this commissioned/collaboration report. Why do they not leave it to market participants to find their own studies and reports?

http://www.rightmove.co.uk/news/articles/property-news/house-prices-to-rise-30-by-2019-new-rightmove-and-oxford-economics-forecast-reveals

Maybe they believe it it the best way to sell more houses? Bring in more Estate Agents to their model? In a market where Gov offers HTB2 to compete at such painfully high prices, and last December, 10 year lows of property on the market (as I remember it). Would it improve supply, as up until recently EAs having to leaflet streets to encourage sellers to market. One EA in London holding party-in-the-park with games and facepainting, 0% commission (how?) to find sellers.

Some concern about topped out prices bringing more sellers back to market.. but maybe more owners at low-mid-high prime they will feel they don't need to come to market if haven't had their absolute fill of HPI HPI HPI. Lock in the low-mid-high prime, and let everyone else begin overpaying for Southampton etc.

Posted 13 December 2013 - 12:34 PM
From EAToday

The national inventory has hit an all-time low, property search engine Home has reported. It says the overall volume of property for sale is now 38% lower than six years ago in December 2007.

It was this time last year, Rightmove sounding triumpant about HPI, got a ticking off.

25 October 2013

Rightmove has been slammed for producing "damaging, lazy statistics" that are seriously hurting the property market.

Ed Mead, director of Douglas & Gordon, took to Twitter to vent his ire, criticising the latest Rightmove house price survey as "absurd".

He took particular issue with the claim that asking prices in London have gone up 10% – and accused Rightmove of allowing the media to report that "house prices have gone up 10% in a month". Mead accused journalists of "poor reporting".

In fact, the national press release that Rightmove sent out to journalists was headed: "London prices rise unsustainably, beating previous high by nearly £30k." The release did refer to "asking price", but under the headline.

In furious exchanges on Twitter, Mead said Rightmove had a responsibility to ensure that it talked about "asking prices" every time it mentioned them.

He said: "Rightmove have a lot to answer for. Their statistics are ASKING PRICES, NOT real ones."

Mead even challenged Rightmove: "Your stats are meaningless. Talk to those who pay you – us – and we'll tell you how badly you're damaging our businesses."

One poster who agreed, Alan Page, said: "Rightmove stat saying London house prices up 10% a month is absurd, dangerous and completely at odds with reality." Another, Timebandit, said that Rightmove's monthly house price bulletin was nothing more than "a greed index" that fails buyers, sellers and agents.

Miles Shipside, director of Rightmove, did not join in the Twitter debate but changed the heading on the Rightmove online blog to: "New seller asking prices soar." This did not completely satisfy Mead, who said the horse had bolted and the damage was done.

Full article: http://www.housepricecrash.co.uk/forum/index.php?/topic/194235-ea-blasts-latest-rightmove-figures/

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Its difficult to imagine why house prices wont rise 30%, if you look at the fundamentals of the housing market. The UK still has net immigration figures of over 200,000 year, and the population is poised to reach 70 million by 2030. Most of that is going to be concentrated in the South East (immigrants arent moving to the Scottish highlands), and the amount of new housing being built is nowhere near enough to match it. So you have a further increase in demand in a market which already has a serious supply shortage, and prices are only going to move in one direction in response to this.

There is nothing obvious which will prevent this from happening; there is no sign of immigration being reduced, no sign of planning permission being relaxed, no sign of cuts to housing benefits to limit demand (all mainstream parties are committed to maintaining current levels of in-work benefits, and the deficit will be covered via higher taxes regardless of who wins the election).

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The real question is, where are the people at the bottom of the Property Ponzi Scheme supposed to find this extra 30% to buy a house... or rather, rent their home from a bank for 30 years? With interest rates at rock bottom levels already, it's going to mean a 30% bigger monthly mortgage payment, or else some other exotic scheme to make it more "affordable" for them.

I think this farce might continue until the bottom of the Ponzi pyramid collapses; which might only happen when the government stops coming up with "schemes" to "help" them onto the Ponzi ladder.

Mass homeownership was a novel 20th century phenomena, there is no reason to think it will continue indefinitely into the future. Throughout most of history, those at the middle/bottom of the pyramid have rented rather than owned their accommodation, and this is still the case in many parts of Europe. Realistically we are moving towards a situation where most young people are going to rent indefinitely unless their parents can buy them a house. Current London house prices are almost certainly based on projections about future rental yields - asking "who can afford to buy them and live in them" misses the point, because that isnt what happens.

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The real question is, where are the people at the bottom of the Property Ponzi Scheme supposed to find this extra 30% to buy a house... or rather, rent their home from a bank for 30 years? With interest rates at rock bottom levels already, it's going to mean a 30% bigger monthly mortgage payment, or else some other exotic scheme to make it more "affordable" for them.

I think this farce might continue until the bottom of the Ponzi pyramid collapses; which might only happen when the government stops coming up with "schemes" to "help" them onto the Ponzi ladder.

They're not supposed to.

The way it works is that existing asset holders use the value of their rising assets to buy more assets to rent to those not fortunate enough to have been born when it was possible to buy those assets using the proceeds of earned income. They then charge more in rent than the unfortunate wage earners can afford to cover the mortgages on the assets, and the government makes up the difference through housing benefit to stop the financial system from collapsing under the weight of its own dysfunction.

This should all be obvious by now.

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£30% ... that don't impress me much.

Eastern promise pays off: House prices rocket by up to 480 per cent as east Manchester competes with the leafy suburbs as city's 'great place to live'

East Manchester is officially booming - with average house prices TREBLING since the year 2000.

If you had bought a house in M11, which covers Beswick, Clayton and Newton Heath, in 2000, you would have paid just £17,706 on average.

But so far this year, homes have been selling for nearly £100,000 - a staggering 480 per cent increase, compared to the national average of 139.2 per cent .

http://www.manchestereveningnews.co.uk/news/greater-manchester-news/eastern-promise-pays-off-house-7906237

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