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Estimate The Size And Scope Of The Hpc

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Impossible to know what state intervention will happen should it start to fall rapidly.

I remember that wretched scouse woman MP with her files photographed about stopping the HPC when going into no.11 Downing Street sometime around 08/09.

And you have to hand it to Brown on that one he did a good job of stopping the crash the one eyed freak. Probably get the same this time.

Anyway to play along i put 30% as there are lots of boomers with money and huge pensions that can jump in when prices start to look cheap.

Edited by Rigged

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Impossible to know what state intervention will happen should it start to fall rapidly.

I remember that wretched scouse woman MP with her files photographed about stopping the HPC when going into no.11 Downing Street sometime around 08/09.

And you have to hand it to Brown on that one he did a good job of stopping the crash the one eyed freak. Probably get the same this time.

Anyway to play along i put 30% as there are lots of boomers with money and huge pensions that can jump in when prices start to look cheap.

To do what with them though? Just rent it in it?

God, I hope they flood the market with rentals, and put downward pressure on rents.

The only way I will ever save up sufficient money to buy a place of my own.

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To do what with them though? Just rent it in it?

God, I hope they flood the market with rentals, and put downward pressure on rents.

The only way I will ever save up sufficient money to buy a place of my own.

It needs to fall 40-60 % in Southern England and decent parts of the North for wages to match prices, but i think interest rates will stay low for a generation or 2, hence why it won't fall this much.

But maybe the powers that be now know unaffordable housing is destroying the economy and more importantly will see them voted out of power.

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It needs to fall 40-60 % in Southern England and decent parts of the North for wages to match prices, but i think interest rates will stay low for a generation or 2, hence why it won't fall this much.

But maybe the powers that be now know unaffordable housing is destroying the economy and more importantly will see them voted out of power.

Low interest rates for one or two generations? Impossible!

The market will never ever tolerate that, it will be like 1992, when the UK dropped out of the ERM loosing a metric shit-tone of money in the process.

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I think that 30% straddles the line between house prices retaining a sense of normality (and then not growing for a while for the rest of the economy to catch up), whilst not causing an end-of-days catastrophe. Once prices drop 20-25% I expect the Government to open the credit taps as widely as they can to get prices back up, but it will take a while for the effects to be noticed.

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Can we have a poll to see what the average user reckons about the size and scope of the HPC, how big will the drops be, and any supporting evidence.

Supporting evidence is all over the forum.

My view 50%-60% - is possible, but not reflected on LR/Halfiax/Nationwide charts.

Individual opportunities for homebuyers.

Edited by Venger

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I think it was 1992 but can't really remember, anyway after more than a year of being messed about by stupid failed tyre kicking buyers I sold for 52K instead of the 90K I was originally hoping for.

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I think it was 1992 but can't really remember, anyway after more than a year of being messed about by stupid failed tyre kicking buyers I sold for 52K instead of the 90K I was originally hoping for.

Eh? What did you buy it for? I guess it was more than you bought it for... but far lower than peak price? You seemed to be grateful for buying previously - maybe just for the rent saved aspect of it, during your ownership, despite selling for lower price?

That was even more noticeable in the 1980s. I remember walking into an EA office in Wokingham and innocently asking if they had anything I could rent. The sharp-suited one actually broke into astonished laughter and looked at me as though I was something on his shoe before explaining patronisingly that they didn't do lettings. I slunk out feeling that I had been put well in my place, although in fact he did me a favour because I did instead buy my first place which HPI'd into orbit.

Needless to say I have ever since avoided any kind of contact with that particular EA (whose name rhymes with Fartin Hole).

I can't get a handle on your hpc position, but very few IO mortgages about (you have to do quite a bit of proving your position for lender - and borrowing money (outbidding someone else for a house) is a commitment to repay debt. It's why I won't borrow more than I'm comfortable with, and sick of hearing excuses for those who do.

You are so right and this argument is spot on. Long term financial commitments are subject to unpredictable economic factors and it's not realistic for promises made now to be kept 25 years in the future. I am going to get a Fuuge IO mortgage on this basis and when time comes to pay it back I shall just tell them sorry but the deal's off.

Edited by Venger

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It won't happen until you think it can't happen.

When it happens it'll go lower than you thought possible.

Edit to add: and you won't be able to get a mortgage either, so if you're planning on buying it'll be cash only so get saving :)

Edited by SpectrumFX

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I like to please :D

Cheers, I voted for HPI forever.

This is on the premise the banksters can control interest rates forever, when they can no longer, i would say 50-60%.

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I've gone for 70% - a real terms crash based on relative to median incomes in time - with a massive dollop of south east bias. Might be that incomes rise, might be that nominal prices crash. One way or another.

Don't care when it happens - could be a century away for all I care (but I'd say more like 20 years - enough time to see some serious shifts in economy, working conditions etc) but happen it will. IMHO. I'm past caring about my own lifetime.

Noninally at the moment anything less than 40% is just taking off the froth round here. For instance if something that's currently 400k drops to 240k, that still seems expensive to me for what the place is. Takes it back down to 2012 prices. 70% takes the place down to 120k. Now that would be cheap - my 'fair value' for such a place is 180k based on a reasonable value for land and build cost. But once property becomes a dirty word it might happen.

All finger in the air stuff, but my gut feel is based on having saved money vs borrowing it and where my income has gone over my working life.

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This thing took three decades to build and will take decades of recession or near-recession to unwind. If we're lucky. The alternative is re-run of the 1930s.

CklDUxKXIAEdEUR.png

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Oh

Eh? What did you buy it for? I guess it was more than you bought it for... but far lower than peak price? You seemed to be grateful for buying previously - maybe just for the rent saved aspect of it, during your ownership, despite selling for lower

I can't get a handle on your hpc position,

Oh yes even though I wanted 90K and "only" got 52K it was still more than I paid for it which I think was 37K. Also I was selling so that my pregnant girlfriend and I could buy a house together so I didn't really mind the price of houses falling in general.

My comment about the fuuge IO mortgage was meant to be sarcastic in the context of replying to someone who said they felt pensions were unsustainable and it was OK for pension funds to renege on promised benefits. Not the first time my sense of "humour" has caused me trouble on this site!

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It needs to fall 40-60 % in Southern England and decent parts of the North for wages to match prices, but i think interest rates will stay low for a generation or 2, hence why it won't fall this much.

But maybe the powers that be now know unaffordable housing is destroying the economy and more importantly will see them voted out of power.

Allow me to dream: In absolute terms, I believe a £250,000 property should be priced at £75,000-£85,000 (tops) if the UK wants a true economic recovery. A terraced property in Northampton can set you back £175,000 easily and they should be no more than £40,000 max given the age and amount of money to maintain them. A 3 bed semi (£200,000 in Northampton) - max £60,000.

Of course, we'll never ever get back to those prices. I voted a 20% "crash" (LO-fu2kin'-L) which is a joke token gesture at finding market value before the government throw a hundred gimmicks to reflate prices.

Edited by canbuywontbuy

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Prices can fall further and faster than people realise. I was trying to sell in late 2008 and it was not a good time tbh. People who wanted to sell were all undercutting each other and starting to panic. The EA said there was no point in "chasing the market down". You had to make a bold cut to get a sale or be prepared to accept a low offer (which I did in the end). Housing is very illiquid so unless you have a desirable property in vgc it's quite hard to sell at the best of times. What no-one thought would happen is that the gvt would step in and provide props. Mortgages were harder to come by at the time and cutting off the credit was what was causing the price falls.

Most people sat tight and in retrospect they were right to do so because the gvt didn't want big falls happening as it would have meant more banks going bust so they stepped in. I didn't expect that to happen. Goodness knows what they will do this time. Hopefully Venger is right and the banks will be in a better position so we'll get a much needed correction in property prices. I voted 50% but the SE needs more than that.

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As I have posted on here in 2011 I stretched to buy a house for 300k but failed (owner took off market rather than sell under 330k) that was a 4 bed now there is a nice 3 bed for sale in the same area... 450-465k SSTC

http://www.rightmove.co.uk/property-for-sale/property-59770337.html

So assuming this completes a 4 bed is worth approx 500,000£ a 40% crash will just take us back in my area to 2011 and to be honest they felt expensive then!

This is Norwich not London as I type there are 4 jobs advertised over 60,000£ locally (80 under 30k) one of which is a contracts manager (75K) the other is a dentist (70-90k) the other two are day rate posts no full time.

That house above is on a nice road but it's not the best I walked with my daughter for an hour in the sunshine around South Norwich.

Newmarket Road, Mount pleasant, Albemarle Road, Christchurch Road, Eaton Road, Bankhurst Road, limetree road etc etc on top of this you also have Eaton/Cringleford/colney lane/unthank road.

In those roads the houses are bigger and better, hundreds and hundreds of them all presumably worth 500-800,000+ which them seem to be (but top out at 1/1.3 million strangely*).

I earn in the ballpark of a dentist if all goes well...... but in this market I am a utter peasant not even close any more.

So in essence there are 233 3 bed properties over £300,000 in Norwich listed on rightmove and 2 full time advertised jobs over 60k the best paid being the dentist one 4.75 x 90k = 427,000 ........they cannot buy that 3 bed either.

As others have said it must be equity from other places (london) as there are no jobs which will allow you to buy houses at these prices in such volumes. Also as the prices top out* there is no demand from ultra rich folk so it must be london ordinary joes escaping.

To return to normality I would feel these prices need to fall 50-60% as then the highest paid would have a nice house and the average joe on 20-30k would be able to have a decent enough place.

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Prices can fall further and faster than people realise. I was trying to sell in late 2008 and it was not a good time tbh. People who wanted to sell were all undercutting each other and starting to panic. The EA said there was no point in "chasing the market down". You had to make a bold cut to get a sale or be prepared to accept a low offer (which I did in the end). Housing is very illiquid so unless you have a desirable property in vgc it's quite hard to sell at the best of times. What no-one thought would happen is that the gvt would step in and provide props. Mortgages were harder to come by at the time and cutting off the credit was what was causing the price falls.

Most people sat tight and in retrospect they were right to do so because the gvt didn't want big falls happening as it would have meant more banks going bust so they stepped in. I didn't expect that to happen. Goodness knows what they will do this time. Hopefully Venger is right and the banks will be in a better position so we'll get a much needed correction in property prices. I voted 50% but the SE needs more than that.

But in 2008 the game changer of 0.5% interest rates was not in place so people were forced sellers.

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So in essence there are 233 3 bed properties over £300,000 in Norwich listed on rightmove and 2 full time advertised jobs over 60k the best paid being the dentist one 4.75 x 90k = 427,000 ........they cannot buy that 3 bed either.

Fromage - this is an excellent soundbite that really sums up the madness.

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This thing took three decades to build and will take decades of recession or near-recession to unwind. If we're lucky. The alternative is re-run of the 1930s.

CklDUxKXIAEdEUR.png

Again the tipping point appears to be the early 1980s when the secular change in interest rates happened.

Impossible to predict what the % will be but I have made an argument for the extreme position.

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Oh yes even though I wanted 90K and "only" got 52K it was still more than I paid for it which I think was 37K. Also I was selling so that my pregnant girlfriend and I could buy a house together so I didn't really mind the price of houses falling in general.

My comment about the fuuge IO mortgage was meant to be sarcastic in the context of replying to someone who said they felt pensions were unsustainable and it was OK for pension funds to renege on promised benefits. Not the first time my sense of "humour" has caused me trouble on this site!

Thank you for the follow-up.

I hope others take note of how it was for you. Hard HPC. Opportunity to upsize at better value, despite not selling your own flat for top price (market went ballistic towards end of joint MIRAS but no one dragged buyers into it, or stopped sellers trying to sell into it).

Doesn't sound like suffering to me.

Also got you (re pensions).

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It won't happen until you think it can't happen.

When it happens it'll go lower than you thought possible.

Edit to add: and you won't be able to get a mortgage either, so if you're planning on buying it'll be cash only so get saving :)

I`m there learnt that lesson in 2009-10

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