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TheCountOfNowhere

It Struck Me Today...it's Going To Take A Massive Event To Bring Reality To The Market

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I've been looking at most of the listings for Northampton of the last 3 months.

The initial asking prices are insane, 2007 + 30%.

I cannot see people willingly now lowering their expectations + the people who bought in the last 12 months wont be wanting to "give it away" when they need to move in 12 months time.

I have come to the conclusion, that the nicely collapsing housing market that was gradually falling as people woke up to reality ( after 3 years + of not being able to sell their house) is now in no mans land.

The asking prices are insane, peoples ability and willingness to buy must now have reach the end of the line.

We are now seeing banks ( funded by the peoples money ) lower rates so they can lend cheaper now to the people who are funding their cheap money.

It will now take a major event to readjust peoples expectations and stop the mad banking system we now have.

I had hoped the London bubble popping would be enough to readjust peoples thinking, but now, I'm not so sure.

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Which I agree is sh*t because I am forced to sell and therefore buy in the next 6 months.

What are you agreeing is sh*t ?

Why are you being forced to sell ?

Have they brought in a law forcing sellers to buy ? Terrible, they will stop at nothing. It seems you have to buy before your children go to school.

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Agreed, they just arent going to let property become affordable under any circumstances.

I'm not saying that.

It is unavoidable that prices will collapse at some point, they were going down nicely before Osborne went all in.

What I am saying is right now it is going to take one massive shock for that collapse to happen soon.

Maybe the london collapse is the key but I think the people pretending their houses are worth X with just retract back into not selling mode and it'll be more stagnation.

We will have more stagnation and fewer and fewer people buying into the pyramid.

Sure, if they only sell 1000 houses a year at some insane price the index will all say...HOUSE MARKET TO NEW HIGHS...while the rest of us just sit watching shaking our heads.

The London bubble is bursting but the UK as a whole needs a massive event to hammer home the ridiculousness of the housing pyramid.

It's maybe time to give in....and leave the country.

Edited by TheCountOfNowhere

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I've been looking at most of the listings for Northampton of the last 3 months.

The initial asking prices are insane, 2007 + 30%.

I cannot see people willingly now lowering their expectations + the people who bought in the last 12 months wont be wanting to "give it away" when they need to move in 12 months time.

I have come to the conclusion, that the nicely collapsing housing market that was gradually falling as people woke up to reality ( after 3 years + of not being able to sell their house) is now in no mans land.

The asking prices are insane, peoples ability and willingness to buy must now have reach the end of the line.

We are now seeing banks ( funded by the peoples money ) lower rates so they can lend cheaper now to the people who are funding their cheap money.

It will now take a major event to readjust peoples expectations and stop the mad banking system we now have.

I had hoped the London bubble popping would be enough to readjust peoples thinking, but now, I'm not so sure.

It has to come from the buyer side - a drop in willingness to meet anywhere near current asking prices in low-mid-high prime areas.

You're not going to readjust owners expectations with any sort of clear evidence. In the main they are not on your side, or any side of fairness; only on the side of what it is worth.

They want their £300,000-£500,000+ for bang average houses in declining areas, bought cheap years ago, often which need lot of money to modernise. And the 'victims' who've bought into forever HPI outbidding others by £100Ks, not on your side either; "renting is dead money" is all you will get from them.

An existing paradigm is seldom dispelled by evidence alone. As Keith Thomas has written, "Such systems of belief possess a resilience which makes them virtually immune to external argument." A people whose culture grossly misinterprets certain facts will not necessarily reason their way to a more encompassing worldview until forced to do so by the brunt of economic necessity or military defeat. Reason does not alter values.

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I think reality is not far off now. Before Obama term is up. The system collapses within the next few years. USA losses reserve currency status, that for me is the trigger. UK Banking system is getting ready for some thing. The greatest depression has not started yet......

Just a guess?

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Agreed, they just arent going to let property become affordable under any circumstances.

It's costing Osborne £120-140bn a year to hold asset prices and current prices out of equilibrium. He cannot continue to borrow and spend at that rate. The only alternative to borrowing is printing, with obvious implications for imported inflation and gilts. Thus, there are no circumstances in which property (and equities) can remain unaffordable.

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The more extreme it gets, the happier I am. What I do not want is things to plateau and settle to a nice steady state. Let these idiots continue to think that they have found a new paradigm...more fool them....if they are that stupid then they all deserve what they get.

I originally want houses to just drop to a fair value.

Now I want carnage.

Who needs savings and production....just double up on debt and consumption and you always win.

Its utter rubbish and we all know it.

It really will take a catastrophe to get them all to realise that you cannot print wealth or prosperity.

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We are now seeing banks ( funded by the peoples money ) lower rates so they can lend cheaper now to the people who are funding their cheap money.

Lowering interest rates will have little effect on mortgages because mortgage applications are stress tested to 7% interest rates.

All that lowering interest rates is going to achieve is people paying back their mortgages earlier and buying shite they don't need like new cars, which I guess indirectly affects house prices, but not to that larger degree.

As the mortgage rates tend towards zero lowering them has negliagble effect and this is exactly the reason that the FED are bringing QE to and end. the days of easy money are coming to an end and what you see not is one last huruh until people can see over the top of that steep hill they've been walking for the last 25 years.

Wars will be started, stats will be fudged, people will be lied to.

The people who pull the strings do not make anything out of low/zero volatility to there is no change of property prices reaching a permantly high plateau. why would they let that happen when they make no money from it. No commission, no mortgage fees, no solicitors fees etc. the market needs turnover for the big boys to bank a profit.

Making 1% on a mortgage is not going to pay those plush London offices and the big bonuses.

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It's costing Osborne US via taxation and inflation £120-140bn a year to hold asset prices and current prices out of equilibrium. He does not care as he has more money than anyone could ever need. cannot continue to borrow and spend at that rate. The only alternative to borrowing is printing, with obvious implications for imported inflation and gilts. Thus, there are no circumstances in which property (and equities) can remain unaffordable.

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It's costing Osborne £120-140bn a year to hold asset prices and current prices out of equilibrium. He cannot continue to borrow and spend at that rate. The only alternative to borrowing is printing, with obvious implications for imported inflation and gilts. Thus, there are no circumstances in which property (and equities) can remain unaffordable.

CPI at a 5 year low at 1.2% too, and that's with loads of QE aswell. I think they may be close to the view that they need to expand the deficit into the general election (they'll call it deficit reduction and refer to the forecast outturns :) ) . The gov' of the BOE talked of raising rates. They seem relaxed to deflation risks.

There are some interesting posts on the surplus countries. Germany needs to spend. ECB seems equally if more relaxed and the Eurozone inflation rate is even closer to zero with some countries experiencing falling prices. Any numbers on what happens to UK debt with deflation? (I saw some on Spain and France)

Edited by Ash4781

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It's costing Osborne £120-140bn a year to hold asset prices and current prices out of equilibrium. He cannot continue to borrow and spend at that rate. The only alternative to borrowing is printing, with obvious implications for imported inflation and gilts. Thus, there are no circumstances in which property (and equities) can remain unaffordable.

Thats something thats out of his control, but they (liblabcons and bankers) will let it go to that extreme.

A few days of the stockmarket falling and they wheeled some fool out to say they were firing up the printing press again.

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It's costing Osborne £120-140bn a year to hold asset prices and current prices out of equilibrium. He cannot continue to borrow and spend at that rate. The only alternative to borrowing is printing, with obvious implications for imported inflation and gilts. Thus, there are no circumstances in which property (and equities) can remain unaffordable.

Boe printed £375 bn. There is virtually no inflation and the lowest gilt yields of a generation. For 5 years.

Got anything else?

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Boe printed £375 bn. There is virtually no inflation and the lowest gilt yields of a generation. For 5 years.

Got anything else?

If you ignore asset price inflation then yes there is virtually no inflation.

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If you ignore asset price inflation then yes there is virtually no inflation.

Well asset price inflation was the stated objective of asset purchases. Why else purchase assets if you don't want the price to go up?

But that doesn't answer the question..........

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Well asset price inflation was the stated objective of asset purchases. Why else purchase assets if you don't want the price to go up?

But that doesn't answer the question..........

It wasnt supposed to create bubbles.

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Boe printed £375 bn. There is virtually no inflation and the lowest gilt yields of a generation. For 5 years.

Got anything else?

At the risk of repeating myself for the nth time...

There's no consumer inflation because there's no consumer demand. There's no consumer demand because there's no recovery. There's no recovery because the economy needs to de-leverage first to effect a recovery.

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I'm not saying that.

It is unavoidable that prices will collapse at some point, they were going down nicely before Osborne went all in.

What I am saying is right now it is going to take one massive shock for that collapse to happen soon.

Maybe the london collapse is the key but I think the people pretending their houses are worth X with just retract back into not selling mode and it'll be more stagnation.

We will have more stagnation and fewer and fewer people buying into the pyramid.

Sure, if they only sell 1000 houses a year at some insane price the index will all say...HOUSE MARKET TO NEW HIGHS...while the rest of us just sit watching shaking our heads.

The London bubble is bursting but the UK as a whole needs a massive event to hammer home the ridiculousness of the housing pyramid.

It's maybe time to give in....and leave the country.

You'd better leave before UKIP/Con isolate the UK and you lose your right to settle somewhere else...

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At the risk of repeating myself for the nth time...

There's no consumer inflation because there's no consumer demand. There's no consumer demand because there's no recovery. There's no recovery because the economy needs to de-leverage first to effect a recovery.

The only alternative to borrowing is printing, with obvious implications for imported inflation and gilts. Thus, there are no circumstances in which property (and equities) can remain unaffordable.

Since your obvious implications for inflation and gilts aren't borne out in practice, remind us again why they can't simply print more? (quite apart from the 'obvious' fact that the stock of gilts purchased remains at £375bn and the real interest rate is still negative).

Repeat that answer for the nth time too would you?

There's no 'obvious' reason why asset prices can't remain 'unaffordable' (imo) absentio printing 1m+ new homes tomorrow (unlikely)

Edited by R K

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Lowering interest rates will have little effect on mortgages because mortgage applications are stress tested to 7% interest rates.

All that lowering interest rates is going to achieve is people paying back their mortgages earlier and buying shite they don't need like new cars, which I guess indirectly affects house prices, but not to that larger degree.

As the mortgage rates tend towards zero lowering them has negliagble effect and this is exactly the reason that the FED are bringing QE to and end. the days of easy money are coming to an end and what you see not is one last huruh until people can see over the top of that steep hill they've been walking for the last 25 years.

Wars will be started, stats will be fudged, people will be lied to.

The people who pull the strings do not make anything out of low/zero volatility to there is no change of property prices reaching a permantly high plateau. why would they let that happen when they make no money from it. No commission, no mortgage fees, no solicitors fees etc. the market needs turnover for the big boys to bank a profit.

Making 1% on a mortgage is not going to pay those plush London offices and the big bonuses.

Is MMR actually being tested at 7%, or just the initial rate + 3%? If it's the latter, dropping rates will make daft sums seem more 'affordable'...

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It wasnt supposed to create bubbles.

We weren't supposed to notice that the 1% were using our money to inflate their assets - I'm pretty sure it was supposed to cause bubbles!

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