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gruffydd

Housing Market Is Wobbling

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Getting the distinct impression the UK housing market is getting rather nervy, again... imagined the opposite would happen, post-election, yet it seems not...

The in/out of EU issue won't be helping - could be a heavy drag for quite a while, with sentiment worsening due to lack of any re-negotiation prior to referendum.

Then there's Greece and the Middle East... a toxic cocktail!

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Getting the distinct impression the UK housing market is getting rather nervy, again... imagined the opposite would happen, post-election, yet it seems not...

The in/out of EU issue won't be helping - could be a heavy drag for quite a while, with sentiment worsening due to lack of any re-negotiation prior to referendum.

Then there's Greece and the Middle East... a toxic cocktail!

And the crash in government bonds...

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It is localised.

I'd love it were the case around me but in Cambridge (city itself) houses are selling in days for 15-20% more than they were 2 years ago.

As a direct example in the last 2 weeks I've been working away, on my return 2 neighbouring houses have sold for roughly £300k. A year ago they'd have got £240k.

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It is localised.

I'd love it were the case around me but in Cambridge (city itself) houses are selling in days for 15-20% more than they were 2 years ago.

As a direct example in the last 2 weeks I've been working away, on my return 2 neighbouring houses have sold for roughly £300k. A year ago they'd have got £240k.

Stc or definitely sold?

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The UK economy is a corpse reanimated by emergency base rate level for 75 months and counting, excess borrowing, mass immigration and propaganda. Dreamers/denialists only get real when you ask them "how about raise the base rate by 0.25% to a rate that would still be 1.25% below the all-time low base rate between 1694 and February 2009"? Suddenly the excuses come out. It's never time. It never will be time. We live in a fantasy economy. Vested interests make the denial very strong.

We pretend we're in a "robust and sustained" recovery while even middle-range supermarkets suffer and rock-bottom discount chains - which have been around since the early 90s - have become very popular over the last 5 years or so - prosperity?

Meanwhile desperate government gimmicks try to prop up a housing market that is a shadow of its former self, despite cheapest ever credit and H2B.

Seriously, the case for HPI forever has never sounded more hollow and pathetic than today. There is no case. It's dead, dead, dead.

Another £500Bn down the drain in the next 5 years just to pay for meagre GDP gains...

FFS, imagine if somehow a company stock was kept artificially high despite losses, scandals and redundancies....do you simply think "stock keeps rising" or do you consider the reality?

Edited by canbuywontbuy

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Getting the distinct impression the UK housing market is getting rather nervy, again... imagined the opposite would happen, post-election, yet it seems not...

The in/out of EU issue won't be helping - could be a heavy drag for quite a while, with sentiment worsening due to lack of any re-negotiation prior to referendum.

Then there's Greece and the Middle East... a toxic cocktail!

No ###$ sherlock.

Look at the asking prices. Look at people's wages. Look at the cost of living.

The pre election boom was a charade, I personally want to see Osborne and Cameron tried for fraud. They spent billions of our money buying the election, IMHO.

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Look at the asking prices. Look at people's wages. Look at the cost of living.

Also, look at the new would-be prospects to the housing market - young indigenous population (poor) and immigrants (poor). I know - let's make house prices 4 times what they were worth in 1996 because that will help the wider economy. Ask Tesco.

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My neighbours house, well documented here, is still not sold after a year plus. Despite being 50 k less, better positioned than one that sold last year.

Now we have about ten big houses trying to sell up for silly prices.

The game is up.

Cambridge reductions being reported about 30% reductions for right move.

One man's anecdote does not a housing market make.

Edited by TheCountOfNowhere

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The UK economy is a corpse reanimated by emergency base rate level for 75 months and counting, excess borrowing, mass immigration and propaganda. Dreamers/denialists only get real when you ask them "how about raise the base rate by 0.25% to a rate that would still be 1.25% below the all-time low base rate between 1694 and February 2009"? Suddenly the excuses come out. It's never time. It never will be time. We live in a fantasy economy. Vested interests make the denial very strong.

We pretend we're in a "robust and sustained" recovery while even middle-range supermarkets suffer and rock-bottom discount chains - which have been around since the early 90s - have become very popular over the last 5 years or so - prosperity?

Meanwhile desperate government gimmicks try to prop up a housing market that is a shadow of its former self, despite cheapest ever credit and H2B.

Seriously, the case for HPI forever has never sounded more hollow and pathetic than today. There is no case. It's dead, dead, dead.

Another £500Bn down the drain in the next 5 years just to pay for meagre GDP gains...

FFS, imagine if somehow a company stock was kept artificially high despite losses, scandals and redundancies....do you simply think "stock keeps rising" or do you consider the reality?

+1 It`s a charade kept alive by government subsidies/ smoke and mirrors i`m beginning to think they believe their own lies

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Noticed a few price reductions in Norwich too. No huge drops, the odd few grand off the original asking price here and there. Realisation seems to be striking.

I take it that there's no 'Help to Buy 4' in the pipeline? :unsure: Bloody well hope not.

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Noticed around me many long time sells now trying to rent. The market for detached 4-5 beds must be dead.

These are the same sort of chancers who, after short time on the market, spend thousands on tarting their places up or go the full hog and extend into the loft. Muppets.

This one is now back on the market at silly money, http://www.rightmove.co.uk/property-for-sale/property-34889538.html

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My neighbours house, well documented here, is still not sold after a year plus. Despite being 50 k less, better positioned than one that sold last year.

Now we have about ten big houses trying to sell up for silly prices.

The game is up.

Cambridge reductions being reported about 30% reductions for right move.

One man's anecdote does not a housing market make.

I've looked on Rightmove with Property Tracker installed, include sold subject to contract.

Yes there are some reductions in asking price for some of the more optimistically priced houses but nowhere near 30% in Cambridge itself.

I know of 1 house out of about 20 put up for sale in my suburb that didn't sell within about 2 weeks of going on the market.

It might well be true that some areas of the country have slowed down but when my neighbours houses are selling for £50-70k more than they were a year or two ago then it would be outright untrue to say they are falling here, or the market is slowing.

We get leaflets almost every week saying "Please sell now" from agents. It is like 2007 all over again.

Edited by Timak

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Just let's wait and see if George pulls something out of the bag on the 8th...

What would HtB4/5/6 achieve anyway? More and more debt obligation for the tax payer? How will it end when IRs rise even 0.25%? Oh, right I get it - the plan is to never ever raise IRs - that's right. HPI forever now requires ZIRP forever = low grade economy forever.

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Higher prices have brought forth a lot of supply. Its a good time to sell not buy.

Suspect the ZIRP/QE/H2B induced 'distribution' phase has some while to run yet (still lots of feel good news in the media - never been a better time to buy blah blah).

Those holding onto unrealistic pricing will miss out when the rug gets pulled from under them.

Government will want a housing recovery with the 'floating supply' under new ownership, well under way by 2020. Memories are short.

All guesswork of course. I've no idea really!

I'd be keeping an eye on UKAR/Mortgage Express. I still think landlords are being treated with kid gloves relatively speaking, so as not bring forth too much supply at lower prices and depress house prices.

Edited by RentierParadisio

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Why does the government need to keep house prices high? If it is just for GDP, then couldn't they in theory find something else to pump up (like the stock market) or just switch to something a bit more beneficial to all? They could do a mass infrastructure project like the government did after the war, building loads of houses which would surely stimulate the economy, create millions of jobs and assets? If it is for tax receipts, surely all the other issues that high house prices cause, cancel out tax receipts (i.e. benefits needed to support high prices and rents and all the other effects on the wider economy). I understand people like to think they are rich because the house they bought for £5k is now worth £1 million but if the government can create a bubble in a more benign area not related to a life essential (having a roof over your head), that would be better surely. They built up this bubble over 15-20 years. Surely they could deflate it and move it within 10 years if they really saw that there is no way there can be forever HPI without the following generations being completely impoverished and the UK going down the pan?

Edited by fru-gal

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It is localised.

I'd love it were the case around me but in Cambridge (city itself) houses are selling in days for 15-20% more than they were 2 years ago.

As a direct example in the last 2 weeks I've been working away, on my return 2 neighbouring houses have sold for roughly £300k. A year ago they'd have got £240k.

Don't tell me this. I sold in Cambridge in December. Are you telling me I could have got another 10%?

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Don't tell me this. I sold in Cambridge in December. Are you telling me I could have got another 10%?

Just be happy with what you got + your continued success in surviving the cull in your industry.

Very few owners get out at 90% of peak in a market.

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Just be happy with what you got + your continued success in surviving the cull in your industry.

Very few owners get out at 90% of peak in a market.

+1

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Why does the government need to keep house prices high? If it is just for GDP, then couldn't they in theory find something else to pump up (like the stock market) or just switch to something a bit more beneficial to all? They could do a mass infrastructure project like the government did after the war, building loads of houses which would surely stimulate the economy, create millions of jobs and assets? If it is for tax receipts, surely all the other issues that high house prices cause, cancel out tax receipts (i.e. benefits needed to support high prices and rents and all the other effects on the wider economy). I understand people like to think they are rich because the house they bought for £5k is now worth £1 million but if the government can create a bubble in a more benign area not related to a life essential (having a roof over your head), that would be better surely. They built up this bubble over 15-20 years. Surely they could deflate it and move it within 10 years if they really saw that there is no way there can be forever HPI without the following generations being completely impoverished and the UK going down the pan?

On a roughly similar point I posed the question on the 'Priced Out' facebook page why investors don't go in for other investments that are not finite, unlike property. Property is so illiquid as an investment. Takes several months to sell one - even if you find a buyer almost straight away.

What about gilts, for example? The Chinese bought lots of US T-Bills didn't they?

Edited by MattW

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Why does the government need to keep house prices high?

Just my opinion, but I don't think that in general the government needs to keep house prices high.

What governments do like is private sector credit booms, particularly because the resulting economic growth flatters the government's finances by reducing transfer spending (because, for example, unemployment falls) and raising tax receipts (from, for example, corporation tax paid by banks and transaction taxes like SDLT). Rising house prices are just an inevitable consequence of private sector credit booms, (given the UK private banks' long-standing preference for secured lending against residential property, i.e. mortgages).

Of course, you can't have the booms without the busts, but a Chancellor is rarely going to forecast busts and budget in light of that forecast, (Darling did this to some extent and the commentariat tore him a new @rsehole for his trouble, even though what came along was orders worse than his dismal predictions.)

I think it is worth repeating that reading policy from 2008 onwards as an attempt to sustain high house prices, for the sake of high house prices, is at best tendentious, and in my opinion just plain wrong. Policy was to forestall a correction in house prices because the private banks were too weak to handle it and government both then and ever since have had no appetite for nationalising the entire banking sector and presiding over the resulting carnage and musical chairs as weak owner-occupiers and buy-to-let morons change places with stronger hands presently accommodated in the private rental sector. Withdrawal of the government from the financial sector as they sell out of their positions in Lloyds and RBS and as they shut down,as best they can, their UKAR mortgage books suggests we are getting very close to a return to normal service, which is boom and bust.

Edited by bland unsight

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Higher prices have brought forth a lot of supply. Its a good time to sell not buy.

Suspect the ZIRP/QE/H2B induced 'distribution' phase has some while to run yet (still lots of feel good news in the media - never been a better time to buy blah blah).

Those holding onto unrealistic pricing will miss out when the rug gets pulled from under them.

Hi RP :) I agree.

"There is, of course, the old Rothschild maxim: 'Buy on the sound of cannons, sell on the sound of trumpets,' or as [Warren] Buffett puts it: 'Be fearful when others are greedy, and greedy when others are fearful.'

Doc Housing Bubble (USA SoCal / San Fran orientated) seems to think it's all about allowing the banks to shed bad positions. Inflated whilst they dump and clear junk on their balance sheets during the process.

The goal from the Fed’s perspective is to keep prices high because banks are then able to keep more collateral on their balance sheet at inflated levels. In reality, a buyer is better off purchasing say a home at $300,000 with a higher rate than say a $500,000 home at a very low rate. This is essentially what the battle has boiled down to on the housing front.

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Stc or definitely sold?

Christ, you've not been talking to my mum have you?

She's insistent *really insistent* of saying 'blah blah' sold their house'.

Are they in it, I ask?

Yes, she says.

Then its not sold.

Of all the people in my village/we know that she's claimed has 'sold' from the last yera - about 5 (its not a big place). Only one has actually sold.

I have carefully constructed a model of the local housing market liquidity:

Why IFS would a bank lend into a market where they will struggle to reclaim their cash *when* it all goes wrong.

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