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Do You Have Tunnel Vision Re: House Prices?

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The bull or bear argument is a little academic. The bulls know that no market goes up forever so house prices will fall at some stage - the bears know that when the fall comes the market will subsequently rise.

A dramatic rise in HPI without a substantial prior fall would simply cement my belief that the crash when it does come will be yet more vicious.

A dramatic fall in prices would lead me to expect subsequent rises.

So using your scenario if LR figures showed a 15% rise in HPI at the end of 2006 would I think that a crash had been avoided? The absolute opposite.

A 15% fall in prices would make me believe the market is returning to a more rational basis but I wouldn't try to second-guess the bottom of the market.

The Fox

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THE PROBLEM is affordability, it it will not go away quickly,

Yes. DrBubb is right, affordability of FTBs is the key. As far as there are enough FTBs entering the market every year, the housing market will be healthy.

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Hmm. You see, for me saying that only something extremely outlandish such as 'aliens landing' etc would make you change your mind is the same as saying nothing (realistically) would ever change your mind which to me suggests some degree to fixed, tunnel-like vision.

There's nothing wrong with 'tunnel-like vision' when you're right. You completely ignored my point that either wages double (or better) or house prices halve (or worse) to return us to historical norms: which do you think is going to occur? Because unless one of those things happen, aliens from outer space (or maybe rich Chinese 'investors' with mroe money than sense) are pretty much the only way that house prices are going up.

What's so hard about telling us why you think wages are going to double in a few years so that prices can return to historical norms without dropping in pound terms? You're the one with 'tunnel-like vision' if you think that prices can rise without people being able to pay more for houses.

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To change my mind I would need to see independent economists making strong arguments as to why the current price levels are sustainable over the next ten years.

As far as I can see most informed independent comentators agree that prices are overvalued by about 30%.

I would also need to see rents increasing sharply to correct the crazy yields that most BTLs are making.

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  • 333 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% +
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      • up 5%

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