Jump to content
House Price Crash Forum

House Prices To Rocket


Recommended Posts

  • Replies 119
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Posted Images

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

Judging by the logical construct and the strength of the argument I would estimate that the poster is around 13 years of age, and would be better served concentrating on his homework and leaving the discussion of such weighty issues to the grown ups.

:D

Limpet

Link to post
Share on other sites

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

Ok so your argument goes something like this:

1) If new build BTL's are unsellable because they are oversupplied then property prices will be boosted in other sectors.

2) If there are more vacant BTl properties due to oversupply then rents will rise.

Err?

Link to post
Share on other sites

Judging by the logical construct and the strength of the argument I would estimate that the poster is around 13 years of age

No I would suggest he is an University student reading Property Finance and Investment, who is being serious not realising himself he is a windup.

DMU

BS ?

Edit: Are you looking to buy in the big M.

Edited by fedupwaiting
Link to post
Share on other sites

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

Many of the vested interests are changing sides. Not only this, but they are acting to deflate the bubble.

The government liked HPI because of the great feelgood factor and the MEW boost to the economy. But now they are facing criticism over priced-out young people and key workers, let alone personal debt levels. They want to get the correction over with before the run up to the next general election. Why do you think they withdrew the SIPPS policy and are planning to help supply millions of new homes?

The estate agents loved HPI because properties sold quickly and the size of ther commissions just kept rising. But now transaction volumes have fallen, they have started to switch over to convincing vendors to accept lower offers. If the vendors don't accept, the estate agent risks getting no commission at all, or spending months conducting costly viewings for each property. Every lower offer accepted sets a precedent for the next sale. Read some posts by EAs on this site, they confirm the above.

Large scale landlords were VIs but some anecdotes suggest that now they are taking profits and entire portfolios are being sold. This has the effect of driving down prices, and making them vested interests in the crash.

Finally, the biggest VI of all, the mortgage lenders. If they rashly lend huge income multiples to FTBs or huge sums to overvalued BTLs they themselves are taking on a default risk. To offset this risk they are beginning to tighten lending criteria. A recent example is Portman who have stopped all lending on newbuild BTLs. The tightening of lending criteria is self-reinforcing. For example, some borrowers may come out of very low interest 2-year fixed deals arranged in 2003. They will look to remortgage to avoid going on the standard variable rate. But they then find that the conditions have tightened and no-one will lend to them on the same terms as 2 years ago. If they have MEWed, they might even end up stuck on the SVR, not an enviable position.

The only VI left aboard the sinking ship is the stubborn "investor" who clings on to the fading bubble-hype, hoping against the odds, like Mr Micawber, that their retirement will somehow work out fine.

frugalista

Link to post
Share on other sites

Welcome BillyShears. I am on your side, but I hasten to say that your argument needs to develop a little more before you will gain any credibility here.

I agree with you TTRTR :ph34r:

Personally I welcome any bull who can argue their cause with reason, explaination and facts... something which BillyShears, as you say, needs to do before they will gain any credibility here.

btw TTRTR, I like the new avatar.

Noticed it and didn't release is was TTRTR's :o ... as a bear I think it is quite bearish... and cool :D

Edited by beerhunter
Link to post
Share on other sites

I agree with you TTRTR :ph34r:

Personally I welcome any bull who can argue their cause with reason, explaintion and facts... something which BillyShears, as you say, needs to do before they will gain any credibility here.

Although going easy on the opponent is not my strong point I think its best not to be too hard on Billy and anyone else who comes here with this level of argument and this position. To learn to argue there needs to be a forum to practice and that forum needs to offer enough counter argument, skill and compassion to allow the novice develop without sending him running scared and battered in the other direction. Since a long time ago I was there myself, I know this too well. I welcome the intercession from TTRTR (even if you are WRONG, WRONG, WRONG mate :lol: )

We'll make a bear of you yet Billy :D

Link to post
Share on other sites

Billy - DO NOT BUY THE BEAR CLAPTRAP!

Most professional forcasters can see that Brown will inject money into the housing market via keyworker schemes etc... Housing now represents 50% of all the real wealth of the UK from under 18% not so long ago.

The forecasts are by RICS etc.. of 4%-6% HPI in 2006. This is underpinned by massive immigration levels, full employment, and low interest rates.

However, I do believe the real economy will continue to collapse as real incentives disappear.

If houseprices rose by 10% as you say, thats another few years wages that a worker will have to find from somewhere in rent or mortgage payments, reducing consumption and saving.

I myself have quit the process of self employment burn-out. The self employed could see from 1997 what a disaster Brown was. I honestly thought that Brown would be turfed out by 2003, but apparently not because people view endless HPI as a good thing.

Houseprices will not crash, as they have a 'Brown put' via all sorts of schemes.

However, this will destroy the real economy as people quit the treadmill of hard work, disilluisioned. Productivity will start to dive.

My guess is that a lot of people will be thinking the same as taxes rise - screw this crap what am I killing myself for! Lets hope they realise this before the population register and ID cards engulf them in 2008.

REAL INCENTIVE has gone.

Ordinary hardworking folk are all much poorer, even the ones with a home.

Real output will fall, and houseprices will rise even further upwards. Liabilities will increase and taxes will rise further, enforced with a population register and ID cards, removing real incentive still further in a spiral.

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.

Edited by brainclamp
Link to post
Share on other sites

Personally I welcome any bull who can argue their cause with reason, explaination and facts... something which BillyShears, as you say, needs to do before they will gain any credibility here.

Hear hear.

BillyShears is sticking to economic arguments, and avoiding the bear taunting which has characterised newbie bulls over the last few months ("sad renters", "doom mongers", "missed the boat", "get a life" etc.). Those of you not making him/her welcome should think more carefully about the credibility of the forum as a whole.

frugalista

Link to post
Share on other sites

Judging by the logical construct and the strength of the argument I would estimate that the poster is around 13 years of age, and would be better served concentrating on his homework and leaving the discussion of such weighty issues to the grown ups.

:D

Limpet

Judging by the nearly impeccable English of the poster, well above average on this site, I would say he or she probably doesn't need to do too much homework.

Link to post
Share on other sites

I can't beleive there are 3706 members!

I knew from the first vote off 9 weeks ago that Shane would win the XFactor. He has age, looks and sex appeal on his side, and his vocal range is excellent. Now my last four choice I got that a bit skew whiff, I had it as Shane, Andy, Maria and Brenda but there you go, I never said I was perfect. Nothing against Journey South mind, grand lads but I see them as a good club act, but not volume record sellers.

Edited by Catch22
Link to post
Share on other sites

Judging by the logical construct and the strength of the argument I would estimate that the poster is around 13 years of age, and would be better served concentrating on his homework and leaving the discussion of such weighty issues to the grown ups.

:D

Limpet

Judging by the syntax I would say that he is about 18 - 20. I think you are being a big meany Limpet :( (and wasting the opportunity for a convert :D )

Link to post
Share on other sites

Although going easy on the opponent is not my strong point I think its best not to be too hard on Billy and anyone else who comes here with this level of argument and this position. To learn to argue there needs to be a forum to practice and that forum needs to offer enough counter argument, skill and compassion to allow the novice develop without sending him running scared and battered in the other direction. Since a long time ago I was there myself, I know this too well. I welcome the intercession from TTRTR (even if you are WRONG, WRONG, WRONG mate :lol: )

We'll make a bear of you yet Billy :D

I agree totally with you, and like someone else said (paraphasing them) "we've had too many one post bulls here".

I do welcome bulls who make reasoned arguements (and agree it can take time which to settle in) but similarly I dislike the bears who call aw***ga on every post they disagree with.

When you say the "forum needs to offer enough counter argument, skill and compassion to allow the novice develop without sending him running scared and battered in the other direction".. your spot on.

BTW perhaps webmaster could set up a "bull corner" for the certified bulls, so they get some peace from all us bears sometimes.

Edited by beerhunter
Link to post
Share on other sites

Did it take you a whole 12 hours to think of something this insightful?

Oh, BTW AWOOOOOOOOGA!!!! :D:D

The AWOOGA troll siren is beginning to lose its original meaning. London Landlady even suggested it now stands for "Anyone with opposite opinion go away".

HPC regulars, I suggest we use the troll siren only in the event of taunting trolls, such as Property Guru etc. Otherwise I will be forced to start charging royalties on it.

frugalista

Link to post
Share on other sites

Welcome aboard BillyShears. I hope you'll find this forum as enlightening as I have (even if you - as I - don't agree with everything said).

To challenge one of your points. My parents have rented all of their life and have never found it necessary to "return to the market" (they could never afford to).

I have also always rented since I left school. I'd very much like to buy - but not at current prices. And I'm quite happy to wait a couple of years to see what happens (while saving as much as I can).

If your predictions on HPI turn out to be correct then the missus and I will return to the housing market as you predict (but not in this country I'm afraid). The money we'll have hopefully saved by then will go a lot further in my other half's home country (we could comfortably live off the interest).

Link to post
Share on other sites

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.

Great, so where is the money going to come from exactly? Lots of people out there couldn't afford to buy at the silly prices today let alone at your fantasy of an arbitrary 10 percent.

Every market sings between imbalances on eitherside, in this case as prices rise too much you choke off buyers, see 'demand destruction'.

Link to post
Share on other sites

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?

The relatives and divorcing couples will sell their houses. But they aren't the types of owners who are driving the market. The houses sold by relatives and divorcing couples will probably be sold to property developers who will then make sure that they get their return on investment. As more and more houses are purchased by professional owners with a profit motive, the more solid the foundations of continuing HPI.

As for buying your house... I don't wish to buy random houses for random prices, if I'm going to buy a house I'm going to research it properly and buy at the best price.

BS

buyers at 'the mercy' and 'forced to buy' were not the kind of words i was expecting in a free democracy.

and with this attitude - it just makes you want to avoid paying tax wherever you can. however small the claim.

We do not live in a free democracy. Please tell me which political party the poor and weak in our society can vote for that BOTH has their interests in heart AND has a realistic chance of achieving power.

BS

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.