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BillyShears

House Prices To Rocket

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I'm new to this forum. The predictions of a house price crash are crazy. People who predict a crash forget that many houses are bought as investments, and these homeowners are just not going to sell at a loss. Buyers can boycott the market for a while, but they must eventually return. And when they do sellers will have them at their mercy, and will insist on prices that give them a good return on their investment. I predict a 10% rise in house prices next year, and higher rises in subsequent years as buyers are forced to return to the market at the mercy of sellers.

BS

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There are too many vested interests who rely on the housing market continuing to grow. People and organisations have learnt their errors from the previous house crash, and will make sure that the same does not happen again. Banks and building societies have already shown that any amount of house price inflation can be supported by simply increasing the multiples of income allowed for mortgages. There is no reason why this policy cannot be extended indefinitely to support continuing house price inflation in real terms.

BS

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This is the madest arguement to say prices will continue to rise. I suppose my dot.com shares have increase in value at 10% per year because I refuse to sell them for a loss.

Normal, ordinary people who buy homes to live in for 20 years won't sell at a loss. Normal inflation will take care of that. Speculators who bought with the bank's money and have to pay interest may have to sell when they can't afford the repayments. When sellers have to sell, they are at the mercy of the buyers.

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There are too many vested interests who rely on the housing market continuing to grow. People and organisations have learnt their errors from the previous house crash, and will make sure that the same does not happen again. Banks and building societies have already shown that any amount of house price inflation can be supported by simply increasing the multiples of income allowed for mortgages. There is no reason why this policy cannot be extended indefinitely to support continuing house price inflation in real terms.

BS

Ah, so "they" won't let it happen again and it's "different this time" anyway. lol.

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I'm new to this forum. The predictions of a house price crash are crazy. People who predict a crash forget that many houses are bought as investments, and these homeowners are just not going to sell at a loss. Buyers can boycott the market for a while, but they must eventually return. And when they do sellers will have them at their mercy, and will insist on prices that give them a good return on their investment. I predict a 10% rise in house prices next year, and higher rises in subsequent years as buyers are forced to return to the market at the mercy of sellers.

BS

Good on you billy. You can't fight maths.

Yep I reckon your right. I earn about 1800 a month. That means that I have 1800 a month to spend on my morgage. I will walk the 7 miles to work everyday, I will not eat, I will not dress, I will not use electricity, gas or water. I will fall down with fatigue, hunger and cold after a week, but at least I will have an 8 x incomes multiple mortgage to service the roof over my head. The light has gone on. Its all coming together for me. I am seeing it now. I will probably lose the roof over my head eventually due ot an extended period in the hospital...

Edited by Elizabeth

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I'm new to this forum. The predictions of a house price crash are crazy. People who predict a crash forget that many houses are bought as investments, and these homeowners are just not going to sell at a loss. Buyers can boycott the market for a while, but they must eventually return. And when they do sellers will have them at their mercy, and will insist on prices that give them a good return on their investment. I predict a 10% rise in house prices next year, and higher rises in subsequent years as buyers are forced to return to the market at the mercy of sellers.

BS

:rolleyes::lol::lol::lol:

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This is the madest arguement to say prices will continue to rise. I suppose my dot.com shares have increase in value at 10% per year because I refuse to sell them for a loss.

People have an alternative to buying dot.com shares. Alternative investments such as gold, property, shares in other types of companies, collectibles, and the like. People have to live in houses. They cannot avoid the profit motive of buy-to-let landlords as BTL landlords unable to sell their houses at a profit will recoup any temporary loss by raising rents so that their sum income shows a good return on their investments. So potential buyers are at the mercy of owners in either case.

BS

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I'm new to this forum. The predictions of a house price crash are crazy. People who predict a crash forget that many houses are bought as investments, and these homeowners are just not going to sell at a loss. Buyers can boycott the market for a while, but they must eventually return. And when they do sellers will have them at their mercy, and will insist on prices that give them a good return on their investment. I predict a 10% rise in house prices next year, and higher rises in subsequent years as buyers are forced to return to the market at the mercy of sellers.

BS

Welcome to HPC.co.uk, the one and only BillyShears.

This site is not really about boycotting the market in order to force sellers to drop prices. Perhaps it has convinced a few to STR or delay buying but the site does not really have a lot of influence, so I think you are missing the point.

People have stopped buying and the crash is happening *naturally* because FTBs are priced out and speculative sentiment is evaporating. Whether or not a couple of thousand FTBs who read this site buy or not is a drop in the ocean.

You say buyers "must eventually return" i.e. buy. But you're wrong, there is no such thing as a forced buyer. Someone with a housing need can always rent. Furthermore, many renters are paying near or below the cost of servicing a mortgage in some housing sectors, so with prices at best stagnating they are in no hurry.

However, there are and will continue to be many forced or highly motivated sellers: deaths, divorces, reposessions, job relocations, retirees and emigrations to name but a few.

I hope you stick around and continue to debate! We have had too many one-post bull newbies lately.

frugalista

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I'm new to this forum. The predictions of a house price crash are crazy. People who predict a crash forget that many houses are bought as investments, and these homeowners are just not going to sell at a loss. Buyers can boycott the market for a while, but they must eventually return. And when they do sellers will have them at their mercy, and will insist on prices that give them a good return on their investment. I predict a 10% rise in house prices next year, and higher rises in subsequent years as buyers are forced to return to the market at the mercy of sellers.

BS

How exactly are people "forced" to buy?

I know plenty of reasons why people are forced to sell, death, divorce, job loss, personal insolvency (a good one for next year)

I don't see any reason why buyers "must" return. There are currently thousands of properties standing empty around this country. I have yet to hear of anyone who has been forced to buy.

Do some reading on what happens when property bubbles burst, Japan didn't want to end up in their economic mess, but it happened anyway.

Australia didn't want a housing crash, but they're getting one right now.

The crash around the UK is now moving into full swing. Quite frankly your comments come across as enormously uninformed.

Stick around and learn something.

Edited by BandWagon

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Welcome to HPC.co.uk, the one and only BillyShears.

You say buyers "must eventually return" i.e. buy. But you're wrong, there is no such thing as a forced buyer. Someone with a housing need can always rent. Furthermore, many renters are paying near or below the cost of servicing a mortgage in some housing sectors, so with prices at best stagnating they are in no hurry.

However, there are and will continue to be many forced or highly motivated sellers: deaths, divorces, reposessions, job relocations, retirees and emigrations to name but a few.

I hope you stick around and continue to debate! We have had too many one-post bull newbies lately.

frugalista

"You know I have been for so many years".

See my previous reply about renting which crossed yours in the virtual post.

BS

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People have an alternative to buying dot.com shares. Alternative investments such as gold, property, shares in other types of companies, collectibles, and the like. People have to live in houses. They cannot avoid the profit motive of buy-to-let landlords as BTL landlords unable to sell their houses at a profit will recoup any temporary loss by raising rents so that their sum income shows a good return on their investments. So potential buyers are at the mercy of owners in either case.

BS

In many cases BTL "landlords" will not be able to increase rents due to the huge amount of competition around. Look at many new build flats and there are numerous To-Let boards up. If rents can't go up then a landlord is stuffed and many will be renting out at a loss.

I assume you know the Portman will no longer lend to BTL new builds because they feel the market is unstable?

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I'm new to this forum. The predictions of a house price crash are crazy. People who predict a crash forget that many houses are bought as investments, and these homeowners are just not going to sell at a loss. Buyers can boycott the market for a while, but they must eventually return. And when they do sellers will have them at their mercy, and will insist on prices that give them a good return on their investment. I predict a 10% rise in house prices next year, and higher rises in subsequent years as buyers are forced to return to the market at the mercy of sellers.

BS

High house prices are killing the British Economy, it really is that simple!! You believe that house prices shall continue to rise whilst the British Economy goes down the pan!! Like Mervyn King said 'House prices are a matter of opinion but the levels of debt in this country are very real' :lol::lol::lol:

I bet you probably don't even know who Mervyn King is.

Edited by neilrich

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People have an alternative to buying dot.com shares. Alternative investments such as gold, property, shares in other types of companies, collectibles, and the like. People have to live in houses. They cannot avoid the profit motive of buy-to-let landlords as BTL landlords unable to sell their houses at a profit will recoup any temporary loss by raising rents so that their sum income shows a good return on their investments. So potential buyers are at the mercy of owners in either case.

BS

You should do some reading about how inflation is measured, it forms part of the "basket" of goods measured by the MPC.

A rise in rents is one of the factors that contributes towards higher rates.

Besides this minor point, one of the effects of extremely high house prices has been a flood of new properties, simply because there is so much profit to be made by the developers.

And if you had a look at some basic economics, you would know that price is determined by supply and demand.

Right now there is far too much supply, and with the economy looking like it's heading into recession, demand is likely to fall.

Newbie BTL idiots are in for some real trouble. The smart money was out of property last year.

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People have an alternative to buying dot.com shares. Alternative investments such as gold, property, shares in other types of companies, collectibles, and the like. People have to live in houses. They cannot avoid the profit motive of buy-to-let landlords as BTL landlords unable to sell their houses at a profit will recoup any temporary loss by raising rents so that their sum income shows a good return on their investments. So potential buyers are at the mercy of owners in either case.

BS

You are basically saying that renting is not an alternative because rents will rise in line with house prices. However if you actually look at the evidence, rents have risen only slightly above inflation over the last few years, unlike house prices which have doubled or tripled. For example, I am renting today for the same money I paid in the year 2000. This is IMHO the best evidence that the recent boom was speculative.

Of course there is only a limited pool of prospective tenants and landlords must set the rent according to market conditions or face a loss-making void period. Recent BTLs cannot raise rents to whatever they like. The main reason for this is that they must compete with landlords who acquired property a few years ago, have a lot of equity and are prepared to make a reasonable income based on the money they *originally invested* rather than the current market value of the property.

frugalista

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There are too many vested interests who rely on the housing market continuing to grow.

Who are these "vested interests"?

When no one can afford to buy a property with such high house prices, what happens to all the mortgage brokers/providers, estate agents... they are out of business. So it's not in their interests.

When no one can afford to buy a property with such high house prices, what happens to all the sellers... they can't sell and release equity/move... so they are stuffed for changing jobs/retiring. So it's not in their interests.

People and organisations have learnt their errors from the previous house crash, and will make sure that the same does not happen again.

How?

By the way there wasn't one "previous house crash".. there have been many, so what makes this one different? Let me guess its because you own a property.. and hence have a vested interest? ;)

Banks and building societies have already shown that any amount of house price inflation can be supported by simply increasing the multiples of income allowed for mortgages. There is no reason why this policy cannot be extended indefinitely to support continuing house price inflation in real terms.

Extended indefinitely.. so what happens you need the all worlds gold reserves to buy a studio flat in Penge?

I look forward to some sensible bull arguments please :)

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A few weeks ago I went to view in a affleunt town no less than 4 empty houses.

They are still on the market 4 weeks later.

Unfortunately they weren't any good to me but the squatters might be happy to live without a garden and a kitchen that needs updating. It's very risky having a property stood empty IMO.

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In many cases BTL "landlords" will not be able to increase rents due to the huge amount of competition around. Look at many new build flats and there are numerous To-Let boards up. If rents can't go up then a landlord is stuffed and many will be renting out at a loss.

I assume you know the Portman will no longer lend to BTL new builds because they feel the market is unstable?

The market for "new builds" being "unstable" supports my claims. Because everyone needs housing, you can only have "instability" in localised portions of the market. People can shun "new builds" because there is an alternative, which is to rent or buy existing housing. But if there is a lack of interest in "new builds", then there must be an equal and opposite rise in interest in other types of housing. That will boost the prices of these "other" types of housing, and the "new builds" will become "bargains" by comparison. This will eventually lead to people abandoning the other types of housing, and boost "new builds" so that their prices will catch up. And so the market as a whole keeps going up.

The same applies if there is greater mobility in the rental sector. It is difficult for landlords to raise the rent for sitting tenants as there is psychological resistance to the rent changing by more than trivial amounts without a corresponding (and expensive) rise in the level of service. But with more property on the market, clearly without sitting tenants, this allows the landlord to set a new "clean slate" rent without this limitation, leading to a long term rise in income.

BS

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I'm new to this forum. The predictions of a house price crash are crazy. People who predict a crash forget that many houses are bought as investments, and these homeowners are just not going to sell at a loss. Buyers can boycott the market for a while, but they must eventually return. And when they do sellers will have them at their mercy, and will insist on prices that give them a good return on their investment. I predict a 10% rise in house prices next year, and higher rises in subsequent years as buyers are forced to return to the market at the mercy of sellers.

BS

so Great Auntie Mary, who passed on to that celestial cloud, has 5 beneficiaries under her will. They all say "lets keep the house as an investment, rather than sell it now at a loss." Similarly the divorcing couple will want to keep their jointly owned house as an investment? And the downsizers, who don't want to spend the money on the running costs or the upkeep, where they have a reduced income.

No-one bought houses as an investment before the last crash? Its all different now?

Lets put your money where your mouth is. We'll value my house at current market value, and then we'll enter into an agreement for you to buy it in a year's time for 10% more than this value. Or are you scared?

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I believe BillyShears is a good example of the average person on the street, these people really do believe that houseprices shall simply rise forever!! :lol::lol::lol: They believe all the spin fed to them by those with a vested interest.

Still he has cheered me up no end, as I realise these poor sods with their bull arguments don't have a leg to stand on.

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  • 301 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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