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Don’t Fear A Housing Crash

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Guest magnoliawalls

Prices appear to have managed a ‘soft landing’, with predictions of gentle growth in 2006. By Clare Francis

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Drew Wotherspoon at Charcol said: “Interest rates are by far the most important influence on house prices, and we expect rates to fall further in 2006. We think there will be at least two, but probably three, quarter-point cuts, which would take base rate to 3.75% by the end of the year. This should stimulate a gentle upward movement in prices as confidence and affordability improves further.”

Regurgitated VI spin - I hope the Times did not pay much for this cut and paste piece.

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What people seem to forget is that interest rates are at their highest in history relative to earnings.

The decisive factor in affordability is the size of the loan not the rate at which it is repaid. A house purchased at 150k at 8% interest is going to be cheaper than an inflated price of 350k at 5%.

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Don't fear a housing crash

Wouldn't it be great if a reporter could write a story about how if prices did crash, we would all be able to afford far better properties, without mortgaging ourselves to the hilt.

How good it would be that a nurse would be able to buy a house near his/her place of work, and even possibly have a family, in a house designed for a family.

How about a fireman who could afford to live in the area where he worked, so that he could best serve the community and spend his spare time with his family instead of commuting to work?

We have little reason to fear a housing crash, except that it will bring a recession.

Those people who have been sensible, spent less each month than they earn, save 10% of their income for retirement, don't get into excessive debt on frivolous consumer purchases, have an enormous amount to benefit from a housing crash. The recession will be less unforgiving to them.

Even those who own property will be able to upgrade their standard of living, something that all of my friends aspire to do.

They don't aspire to live in a one bedroom council flat that costs £500k. They'd rather live in a 3 bed house that costs £250k.

But no, we have more rubbish like this printed in the meedjaaa.

Edited by BandWagon

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"Don't Fear a Housing Crash"

should be read while listening to Blue Oyster Cult's "Don't Fear the Reaper"...........embrace your financial death, it's not the end just a new beginning in the financial afterlife we call bankruptcy.

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Interest rate of 4.5% is high relative to earnings? What do you mean? IRs are not related to earnings, only inflation.

IR rates are high relative to house prices. 4.5% on the average house price of 200k is much more expensive relatively speaking than borrowing at 9% on the same house post (or pre) HPC at 100k (which assumes a 50% correction relative to peak prices as suggested by the graph on this website's home page).

My complaint is that the VIs constantly state that IR are at historic lows which they may well be, however people are in debt at historic high levels because they have bought more with the low rates.

For some Christmas cheer and some real belters see:

http://www.devilducky.com/media/26599

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Prices appear to have managed a ‘soft landing’, with predictions of gentle growth in 2006. By Clare Francis

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Regurgitated VI spin - I hope the Times did not pay much for this cut and paste piece.

absolute VI B0LL0CKS!!!

HOW IS IT THAT A MORTGAGE BROKER CAN CONFIDENTLY TELL THE PUBLIC THAT THEY CAN GET 3 IR CUTS NEXT YEAR WHEN A FORMER POLICY MAKER ON THE MPC(CARRIES A BIT MORE CREDENCE),CAN CONFIDENTLY PREDICT NO SIGNIFICANT CHANGE.

who would YOU trust???

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THis term "soft landing" is being bandied around in the great bubble market of California also. It is a mythical economic scenario that tries to depict an object which has been flying too high coming to rest gently and without damage. The term is the opposite to the word high flying objects fear the most: crash.

Those who are now so desparately trying to talk the market up in the face of economic reality know that the power of the pen is mightier than the sword. We are now in a "phoney war" which is the period when the crash is already underway but denial remains strong.

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absolute VI B0LL0CKS!!!

HOW IS IT THAT A MORTGAGE BROKER CAN CONFIDENTLY TELL THE PUBLIC THAT THEY CAN GET 3 IR CUTS NEXT YEAR WHEN A FORMER POLICY MAKER ON THE MPC(CARRIES A BIT MORE CREDENCE),CAN CONFIDENTLY PREDICT NO SIGNIFICANT CHANGE.

who would YOU trust???

COMICAL ALI

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LOL.

we should make comical ali the patron saint of HPC....

despite him being on the other side he seemed a real nice bloke in a weird way.

like a lonley, bumbling bus conductor who tells tall stories to trapped passengers.

he could be used in marketing by nationwide to counter the popular halifax's howard.

Edited by right_freds_dead

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Guest magnoliawalls

HOW IS IT THAT A MORTGAGE BROKER CAN CONFIDENTLY TELL THE PUBLIC THAT THEY CAN GET 3 IR CUTS NEXT YEAR WHEN A FORMER POLICY MAKER ON THE MPC(CARRIES A BIT MORE CREDENCE),CAN CONFIDENTLY PREDICT NO SIGNIFICANT CHANGE.

who would YOU trust???

Neither of them <_<

"Prediction is very difficult, especially if it's about the future."

--Nils Bohr, Nobel laureate in Physics

For more amusing forecasting related quotes go here

It would have been nice to see balanced reporting in the Sunday Times. But, alas...

He who pays the piper calls the tune!

EAs pay for the property ads, readers who are homeowners feel rich and secure because they believe their house is worth more money, editors and senior journo's are pleased that they made those BTL investments, maybe when people feel wealthy and successful they buy more newspapers.

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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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