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House Prices To Rocket


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true,.

but its funny, though as i think we have a shortage of houses. there isnt an under supply.

just a lot of people holding onto 2-3 properties while other dont have any. its a mexican sweat standoff.

they have sunk their pounds into the plan.

we have not sunk our pounds into their plans.

the tv tells us to do it all the time.

but we havent so far because something stinks.

if it didnt, we would have already bought.

as it is, we have the options.

they have none.

A couple of extra million people with only a few hundred thousand extra homes - mass immigration.

Sweeteners given to workers with strong unions - sorry - 'keyworkers'.

Shared ownership schemes, TV programs on buying with a stanger - i.e. the economic forces of SLUMIFICATION presented in another way.

Falling real wages, rising everything else. Houseprices over 50% of net welath. Savings worthless.

The harder you work the higher HPI gets. There is only one answer - UNIONISE.

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Billy - DO NOT BUY THE BEAR CLAPTRAP!

Most professional forcasters can see that Brown will inject money into the housing market ...

Ah, our resident expert of government policy returns to set us straight, and yet only a fortnight ago:

I had little doubt houseprices would have accelerated massively and rapidly upwards with the introduction of SIPPS, concentrated in the hands of the rich and higher rate taxpayers, massively expanding the largest ever divide in post war society between rich and poor which has all occured under Labour.

This is a significant development, and puzzling just a few months before SIPPS are going to be introduced.

It doesn't mean there will be a housepricecrash. I am sure that the raft of tax freindly policies for investors over ordinary buyers will carry on.

But it seems you are not to be perturbed:

Brown will inject money into the housing market via keyworker schemes etc...

Maybe you should tell Ross Clark of the Telegraph that he and RICS - yes, the source you quote for HPI - that he's got his figures wrong in his article Will the market pay for Sipps? :

In October, the Royal Institution of Chartered Surveyors (RICS) predicted that Sipps would increase property sales next year by three to four per cent, an increase of 160,000.

...

Assuming that they pay an average price of around £100,000, this {keyworker / FTB} scheme will inject approximately £400million into the property market next year, accounting for around 0.25 per cent of the total: much less of an effect than Sipps would have had.

Housing now represents 50% of all the real wealth of the UK from under 18% not so long ago.

That's because houses have gone up in price :blink: .

I don't suppose you remember when the ftse100 & S&P500 was chock full of Tech, Media & Telecom shares (TMT) back on 2000? As McKinsey put it:

By 2000, TMT stocks represented 45 percent of the value of the S&P 500

Yet in 1995, the sector represented only, wait for it...... 18% of the S&P 500s value.

So when you say of property now:

Housing now represents 50% of all the real wealth of the UK from under 18% not so long ago

I can say of tech stocks in 2000

Tech shares now represent ~50% of stock market wealth of teh US from under 18% not so long ago

Why is it so difficult for you to see what you are describing is nothing more than an asset bubble? Of course by Dec 2002, the TMT sector collapsed and was once again worth only 20% of the s&p500, returning to its longterm average (see chart "Exhibit 1" in Better betas, McKinsey )

The forecasts are by RICS etc.. of 4%-6% HPI in 2006.

... and yet, according to the Guardian article For sale - at a price that's far too high, December 17, 2005 , members of RICS are seemingly incapable of correctly valuing property now, let alone in the future.

The Council of Mortgage Lenders (CML), which represents the bulk of banks and building societies, says the public is being duped by surveyors who rubber-stamp developers' advertised prices for apartments at far higher levels than the market can sustain....Without a real house to walk around, surveyors must judge its valuation based on other things. Too often, the CML argues, the result is a figure that exactly mirrors the advertised price ... Earlier this month, The Mortgage Works, ...said it would stop lending on new-build properties {as} ... valuation in the sector was "more of an art than a science". .. A behind-the-scenes row is believed to have taken place between the CML and the Rics, the surveyors' professional body .. A spokesman for the Rics denies it is complacent. .... "If there are cases of Rics members falling short of our standards, Rics... will fully investigate any such allegations," says the spokesman

Fills you full of confidence, eh?

This {forecast} 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.

So that's a self defeated argument. Priceless.

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.

Isn't this just the sour-grapes nonsense we at HPC are constantly accused of?

FACT: you are pissed off with Brown cos your self-employment was trashed by his running of the economy.

FACT: you are looking to turn anyone and anything against the government, even if that means dredging up Roman history to scare one and all into thinking we are about to return to a gov sponsored plutocracy, where only landlords will have rights.

The truth however is quite different from how you perceive things.

Note for instance that the current boom has led to a building boom with large numbers of excess flats that just won't sell. So much for your much trumpeted "rentier society" wher landlords will group into some cartel to protect their rental yields. Those flats will either have to sell at bargain prices to FTBs, or be sold to Housing Associations or let at cheap rates.

Note also how SIPPs, your rentier-investors-dream vanished in a puff of smoke, leaving investors with off-plan investment commitments they can no longer afford.

Note also how the landlord's dream of holding property in a SIPP has been replaced with an FTBs dream of a REIT-money-funnel for new developments that will increase the supply of housing, rather than the demand - the exact opposite of SIPPS.

Note also how the government is promising to take the first hit if property falls for those taking up part-ownership schemes for FTBs. That's right: FTBs, NOT rentier-investors.

In short, you imagine gov policy is promoting a rentier society where wealth is concentrated amongst a select group of landlords. In fact gov policy is proving to be quite the opposite, encouraging, via REITs, a large supply of soon to be cheap rental property and a risk averse way of diluting the concentartion of property ownership via shared ownership.

So when are you gonna put this dead-dog rentier argument to bed?

Edited by Sledgehead
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And if more people rely on the state for housing, then the state needs to buy more property. And once again HPI is boosted by more government money flowing into the market.

If more people unonise, then they demand to have better living conditions. Including housing. So, more key worker schemes, more government money into housing.

People have got me quite wrong. I don't believe that HPI is a good thing or want it to happen. It's just that society, business (including finance) and government are now irrevocably committed to ensuring that HPI continues indefinitely.

BS

1. You don't have to spend hours thinking about it. If your real standard of living is falling year on year, then you unionise and protest. So what if inflation rises? Whats low inflation done for you eh? Fancy buying more dvds?

2. If HPI continues by subsidy, then other taxpayers or borrowing will have to be found to prop it up. If people unionise, and start to target strikes and distrupt petrol depots etc... wage settlements will have to rise no matter mass immigration.

The central bank will preempt this by higher interest rates.

BTW: It has clearly stated this in advance as a 'warning' to unions, otherwise it will keep interest rates low and carry on the HPI, which benifits out those strong union members, and public sector workers.

The only chance you have is to unionise.

A manual worker in the 1970s could raise a family on one wage and buy a home. Can you? Or are you going to be the fool beleiveing in this fantisy of a housepricecrash and paying the taxes for the unionised workers homes?

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There is only one answer - UNIONISE.

Here's a little advice brainclamp, and I speak only as a human being: if you are suggesting government is promoting both a plutocracy and socialism (and I mean genuinely promoting, rather than conning like the Nazis), you might wanna re-examine your thinking.

By the way, I don't expect you to reply to me: why break the habit of a lifetime, eh?

Edited by Sledgehead
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Guest Charlie The Tramp

Enough to affect the psychology of home-owners such that they will not sell for a loss.

BS

That is not the answer to my question.

I say again how many years have they ( whoever they may be ) been predicting a houseprice crash ?

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Enough to affect the psychology of home-owners such that they will not sell for a loss.

BS

What you are describing i snot the rosy scenario you envisage. It just means any falls will be more sustained as optimists are slowly converted to pessemists. What you are describing is the lulling of a generation into a false sense of security.

Edited by Sledgehead
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So property prices cant crash?

And even if our government trys to prop up the market, are we immune to global financial effects? Are we an economic island? Are you aware that in economic terms, we're in choppy waters?

Are you saying HPI will now inflate upwards ad infinitum? Do you know how much the average house would cost if it were to inflate at 10% a year, in 10 years? And how much wages would need to inflate to to keep the income multiples? Have you looked at any charts relating to this?

Do you have a vested interest?

...Not to seem mean, but I think you are a wind-up merchant 'BS'. This will be my only reply. I'd get the mortgage in now, before lending criteria tightens...

Edit: Read up on sentiment re. how it can change.

Edited by bob monkhouse
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So property prices cant crash?

And even if our government trys to prop up the market, are we immune to global financial effects? Are we an economic island? Are you aware that in economic terms, we're in choppy waters?

Are you saying HPI will now inflate upwards ad infinitum? Do you know how much the average house would cost if it were to inflate at 10% a year, in 10 years? And how much wages would need to inflate to to keep the income multiples? Have you looked at any charts relating to this?

Property prices won't crash. High property prices keep the economy afloat, and hence a strong economy and high house prices support each other. When property prices keep growing then income multiples will have to rise along with them. Anyone with their eyes open will see that this is already happening.

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.

So lets get this straight! I buy a betamax video becuase Im told its the much better format than VHS. This may be true. So when no one wants to buy my betamax, I dont drop price to reflect this and DEMAND that someone pays what I WANT not what they want to pay?

With this methodology I think the high straight has made a BIG mistake offering 20/30/40/50/60/70% off items. They should say 'OI! -- SHOPPERS!!!!! NOOOOO!! (Harry Enfield-esqe)

You ******ing pay the price, I aint gonna drop my profit margins!

Your deluded!

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Guest Charlie The Tramp

Property prices won't crash. High property prices keep the economy afloat, and hence a strong economy and high house prices support each other. When property prices keep growing then income multiples will have to rise along with them. Anyone with their eyes open will see that this is already happening.BS

Wow, we are all going to get 10% plus pay rises annually. Right Billy got it now.

Hang on, what about inflationary pressures, won`t that cause interest rates to rise?

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When property prices keep growing then income multiples will have to rise along with them.

Hahahaha. I think your argument is now flawed, but it did give me a laugh. I think rising salaries lead to house price inflation, not the other way around.

How on Earth can incomes keep rising in the global economy? It just makes UK less competetive against it's trading partners. Rising salaries are also a major source of inflation.

Sorry to patronise you, but as Anne Robinson would say, "Goodbye, you are the weakest link."

Hahahhahaaha.

Edited by karhu
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Who has been CONSISTANTLY RIGHT on this discussion group for years? Me or You?

Lets trash your usual dregded up bear 'arguments':

(1) SIPPS would have seen billions injected into housing, if even 100,000 SIPPS investors bought 100,000 £200k flats then HPI would have seen 10bn added on.

(2) Assuming that they pay an average price of around £100,000, this {keyworker / FTB} scheme will inject approximately £400million into the property market next year

This doesn't even stand up - Thats just 40,000 dwellings. 30m workers, 1/5 in the public sector, 6m people - there wil be a lot more uptake then 40k to any scheme than that!. Even basic calcs show you how silly the predictions are.

(3) SP500/TMT stuff?. Well I have new for you - houses aren't shares that turn to toilet paper. They represent £1.2 Trilion of debt, by design. This is one asset bubble whatever you call it that cannot get cheaper without HIGHER INTEREST RATES and therefore INFLATION.

(4) The REIT system will not result in higher capacity in a meaningful way. However the tax breaks will still be there. The demolishion of 400,000 perfectly good homes in the north at the same time - by the way - explain that.

I can see how well the government looks after the ordinary person. The reduction and then removal of MIRAS, while giving massive tax incentives to investors. Mass immigration kept hidden from the electorate as long as possible. Mass visa schemes to lower real wages, massive pumping of credit into the property market.

Lets face it - if you missed the houseprice crony/gravy train you are in the gutter!

With all these schemes at least you have to admit HPI is going up further! And as much as you think its all great now, it doesn't alter the facts - for the next 7 years you will not see any significant change except even higher prices.

A rentier system is baked into the cake. Landlord equity has made saving wage equity worthless already, last I heard, the BOE where printing 12% more money this year.

How do all these schemes get over this if wages cannot grow by this much, as forces are keeping them low?

Unionisation is the only answer IMO.

Ah, our resident expert of government policy returns to set us straight, and yet only a fortnight ago:

But it seems you are not to be perturbed:

Maybe you should tell Ross Clark of the Telegraph that he and RICS - yes, the source you quote for HPI - that he's got his figures wrong in his article Will the market pay for Sipps? :

In October, the Royal Institution of Chartered Surveyors (RICS) predicted that Sipps would increase property sales next year by three to four per cent, an increase of 160,000.

...

Assuming that they pay an average price of around £100,000, this {keyworker / FTB} scheme will inject approximately £400million into the property market next year, accounting for around 0.25 per cent of the total: much less of an effect than Sipps would have had.

That's because houses have gone up in price :blink: .

I don't suppose you remember when the ftse100 & S&P500 was chock full of Tech, Media & Telecom shares (TMT) back on 2000? As McKinsey put it:

By 2000, TMT stocks represented 45 percent of the value of the S&P 500

Yet in 1995, the sector represented only, wait for it...... 18% of the S&P 500s value.

So when you say of property now:

Housing now represents 50% of all the real wealth of the UK from under 18% not so long ago

I can say of tech stocks in 2000

Tech shares now represent ~50% of stock market wealth of teh US from under 18% not so long ago

Why is it so difficult for you to see what you are describing is nothing more than an asset bubble? Of course by Dec 2002, the TMT sector collapsed and was once again worth only 20% of the s&p500, returning to its longterm average (see chart "Exhibit 1" in Better betas, McKinsey )

... and yet, according to the Guardian article For sale - at a price that's far too high, December 17, 2005 , members of RICS are seemingly incapable of correctly valuing property now, let alone in the future.

The Council of Mortgage Lenders (CML), which represents the bulk of banks and building societies, says the public is being duped by surveyors who rubber-stamp developers' advertised prices for apartments at far higher levels than the market can sustain....Without a real house to walk around, surveyors must judge its valuation based on other things. Too often, the CML argues, the result is a figure that exactly mirrors the advertised price ... Earlier this month, The Mortgage Works, ...said it would stop lending on new-build properties {as} ... valuation in the sector was "more of an art than a science". .. A behind-the-scenes row is believed to have taken place between the CML and the Rics, the surveyors' professional body .. A spokesman for the Rics denies it is complacent. .... "If there are cases of Rics members falling short of our standards, Rics... will fully investigate any such allegations," says the spokesman

Fills you full of confidence, eh?

So that's a self defeated argument. Priceless.

Isn't this just the sour-grapes nonsense we at HPC are constantly accused of?

FACT: you are pissed off with Brown cos your self-employment was trashed by his running of the economy.

FACT: you are looking to turn anyone and anything against the government, even if that means dredging up Roman history to scare one and all into thinking we are about to return to a gov sponsored plutocracy, where only landlords will have rights.

The truth however is quite different from how you perceive things.

Note for instance that the current boom has led to a building boom with large numbers of excess flats that just won't sell. So much for your much trumpeted "rentier society" wher landlords will group into some cartel to protect their rental yields. Those flats will either have to sell at bargain prices to FTBs, or be sold to Housing Associations or let at cheap rates.

Note also how SIPPs, your rentier-investors-dream vanished in a puff of smoke, leaving investors with off-plan investment commitments they can no longer afford.

Note also how the landlord's dream of holding property in a SIPP has been replaced with an FTBs dream of a REIT-money-funnel for new developments that will increase the supply of housing, rather than the demand - the exact opposite of SIPPS.

Note also how the government is promising to take the first hit if property falls for those taking up part-ownership schemes for FTBs. That's right: FTBs, NOT rentier-investors.

In short, you imagine gov policy is promoting a rentier society where wealth is concentrated amongst a select group of landlords. In fact gov policy is proving to be quite the opposite, encouraging, via REITs, a large supply of soon to be cheap rental property and a risk averse way of diluting the concentartion of property ownership via shared ownership.

So when are you gonna put this dead-dog rentier argument to bed?

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Hahahaha. I think your argument is now flawed, but it did give me a laugh. I think rising salaries lead to house price inflation, not the other way around.

How on Earth can incomes keep rising in the global economy? It just makes UK less competetive against it's trading partners. Rising salaries are also a major source of inflation.

I didn't say that falling salaries support house price inflation. I said that HPI can be supported by borrowers being prepared to lend greater multiples of income even if salaries are stagnant. This is clearly already happening.

BS

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