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Duelle73

Time To Give Up

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Hi All

I've been a lurker on HPC for nearly a decade and have been content with that status but have heard something today that has fried my brain and I just had to post.

This week I've been staying with my 5 year old sons Mum in Cippenham (a suburb of Slough) while I await the start of a new job (references pending).

Anyway, with this fantastic housing market in the UK, the ex and my son live with her Mum who an hour ago got back from seeing a friend who's house I can see from the kitchen table as I write.

Apparently that friend and her hubby with designs on moving to Devon put the house on the market last week for £345k with an open house on Saturday. It sold on Monday for £406k.

I am gob smacked by the price and speed it has sold for. This is an ugly looking I would guess 3 bedroom house. I just can't believe what kind of jobs a couple of say 30 with little BOMAD and hoping to have kids over the next few years would need to buy this house.

Admittedly still blinded by the pre new Labour 1990's, I would be aggrieved at paying £150k for it and would probably need to be drunk when signing the papers on seeing Slough in the address (apologies to anyone from here!).

If someone told me in my teenage years that I would live in that house (now I would need a lottery win), I would think that I'm going to fall on very hard times and be housed by the council in one of their rougher houses.

I'm trying to console myself with the thought that my son only needs to bump off his Mum and his Nan and he can emigrate somewhere less obsessed by bricks and mortar with the proceeds from his Nan's presumably similarly priced house!

I'll go and post in the new members thread now but just had to get that off my chest.

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Apparently that friend and her hubby with designs on moving to Devon put the house on the market last week for £345k with an open house on Saturday. It sold on Monday for £406k.

I am now seeing visible signs of house price inflation in Somerset as old stock has sold over the last 2/3 years and now there is little left on the market. In many cases the lack of stock is attracting multiple bids from people able to obtain massive mortgages as super low interest rates.

It's not a good situation and I guess it won't change until prices fall forcing property hoarders to release stock onto the market. The problem is catch 22 as whilst prices are rising people are clinging on to their old properties letting them out to those who would be buying them.

^^ This is what drives boom and bust in the housing market.

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I thinkk Crossrail is having a significant impact on prices in the Slough / Maidenhead / Reading corridor

True but in generally anywhere you can hop on a train to London to is being hammered by London workers either cashing out on London property or moving as FTB out of London.The locals in those towns if they don't already own are screwed ..i know I am one of them :rolleyes:

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The insanity of current house prices is indeed hard to take for anyone earning less than 100K a year (which, let's face it, outside of London, is the vast majority of employees).

Right now, it's extremely difficult to foresee an end to the seemingly relentless price increases.

But actually, if you dig a little deeper, you'll start to see cracks/dents/dimples appearing in the housing bubble. And actually, this ridiculous situation (for FTBs especially) is now having such a devastating impact on society as a whole, that something somewhere has got to give. One thing I can say for certain is that it won't be a big increase in wages across the country to address the astonishing house price to earnings ratio. I think the last 5 years has proven that particular theory well and truly dead in the water.

I've discussed other reasons for hopes of a market correction elsewhere on this forum, so I won't repeat myself here. But let me leave you with this little nibble of food for thought: In terms of the number of market participants, real estate (property) is the largest asset class in the world economy - bar none.

What does this mean? It's more a cautionary note than anything else. Basically, it means that the long-awaited correction in house prices will happen, but it will not be a short, sharp crash. Rather, it will be a slow drawn-out affair spanning more than a decade. Why? Because there are so many market participants in real estate as an asset class, it's going to take a long time for all that inflated "value" to return (deleverage) to normal levels (e.g. relative to average incomes).

So, IMHO we all need to be prepared to think and plan long-term if we are to survive this ridiculous period of inflated house prices and best position ourselves to take advantage of the forthcoming cyclical downturn in the housing market. One day house prices will be sensible again. I know it's really difficult to see this right now, but history often requires a lot of patience!

I think this is a powerful message because it provides hope with a healthy dose of reality at the same time. I think it's important to set expectations, because only then can we psychologically prepare ourselves for the forthcoming "Big Wait™" for prices to fall back to sensible levels again.

Remember: History tells us that nothing goes up in price forever, not even UK property.

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