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Guest Daddy Bear

A Selction Of News Articles From Last Time With Analysis

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Guest Daddy Bear

People,

It seems some people think that the crash may happen say in March 2006 and then they will be able to buy in September 2006! - This bear market will take years to play out.

How about calling the website Houseprice 10yearstagnation.com

This will not be like a stockmarket crash taking place over 1 year. Housing is an illiquid market.

In the late 80's they had a bubblepricker in 15% interest rates, and it took 6 years from peak to trough (Oct 95?)

Every so often i think it is good to remind people what the VI's Haliwide etc said last time. It's gonna take time ....

Below is a summarised list of the most relevant property price news articles taken from this website.

The Times

SAT 05 MAR 1988 (Mar 2004)

House prices increased by 16.9 per cent in the year to the end of February, compared with 16.3 per cent to the end of January, the Halifax Building Society announced yesterday. It said this increase, which shows the property market generally has not ...

The Times

TUE 24 MAY 1988

Prices boom as property 'cauldron' bubbles; House price rises

House prices increased by up to 50per cent in the Hereford area in the past 12 months and are rising by 40per cent a year in East Anglia, estate agents report in a survey published today by the Royal Institution of Chartered Surveyors. They are examp...

The Times

WED 22 MAR 1989 (Mar 2005)Marking time;House prices in Britain

House prices in Britain are likely to stagnate this year, the Halifax Building Society said yesterday. It expects high demand in the Midlands and North but a slowing down in the South.

The Sunday Times

SUN 16 APR 1989

House prices still rise in the north;Personal Finance

HOUSE PRICES in London and southeast England have fallen during the last quarter, according to figures published by both the Halifax and the Nationwide building societies. But the fall has been tiny. Nationwide's figures show a 0.2% decrease for old...

The Times

FRI 04 AUG 1989

All house prices `may fall'

House prices throughout the country could fall next year, the Halifax Building Society says in its latest survey. It is the first Halifax price index to forecast a fall in prices. Until now, it has said prices next year would be

flat. Prices are fla...

The Sunday Times

SUN 05 NOV 1989 OCT 2005

House prices may rise next spring

BRITAIN'S depressed housing market could pick up much sooner than expected, according to a forecast to be published this week. The Morgan Grenfell bank believes the housing market has reached a point where recovery is in sight. It says rising income...

The Times

THU 09 NOV 1989 THIS IS NOW DEC 2005/ JAN 2006 !!!! THERES A LONG WAY TO GO !! READ ON!!

House prices 'to rise'

Property prices in London, the south-east and East Anglia will recover next year and begin to increase by about 10 per cent a year, according to Morgan Grenfell, the merchant bankers, in a report on the housing market published yesterday. The recover...

The Times

WED 04 APR 1990 APRIL 2006 the crash finally gets going properly !!!!

10% fall forecast for house prices

HOUSE prices will fall by between eight and 10 per cent this year, according to two surveys published yesterday. In London, however, the prospect was more optimistic as prices only fell by 2.6 per cent in the first quarter. The most depressing foreca...

The Times

WED 11 APR 1990

House prices are still falling, Halifax says

HOUSE prices are either static or still falling slightly, the Halifax Building Society reported yesterday. The annual rate of house price inflation, which was more than 34 per cent a year ago, fell to zero by the end of last month, with prices unchan...

The Times

WED 06 JUN 1990

Halifax predicts prices will keep falling;Houses

THE fall in house prices is accelerating nationally and is expected to continue for the rest of this year, Britain's biggest building society reported yesterday. But a firm recovery is forecast for next year. The Halifax monthly

survey showed that p...

The Sunday Times

SUN 14 OCT 1990 END OF 2006 HAHA HAHAHAHAHA !!!!

House prices bottom out

THE long slide in house prices could be nearing its end. The Halifax's latest quarterly survey of the property market shows that prices in general rose by 0.5% in September, and the indications are of a definite bottoming-out. Last week's cut in the...

The Sunday Times

SUN 18 NOV 1990

House prices set to take off in spring

THE worst slump in Britain's housing market for more than a decade will end next spring, an authoritative report will forecast this week. Prices will rise by an average of 20% within two years, Lower interest rates and higher wages will combine to s...

The Times

THU 06 DEC 1990

House price inflation up

THE annual rate of house price inflation rose in November. The 0.2 per cent year-on-year increase in prices was the first recorded since February by the Halifax Building Society. In October, prices had fallen 0.4 per cent compared with a year earli...

The Times

SAT 29 DEC 1990

Two-point cut in bank rate 'could revive house prices'

A CUT in interest rates by 2 points in the next few months could signal a recovery in the housing market and an increase in house prices of 5 per cent by the end of 1991, the Halifax Building Society predicts today in its annual review of the housing...

The Times

THU 08 AUG 1991 ANOTHER YEAR 2007 and they keep bigging it up !!! HAHAHAH

Halifax building society revises its forecast on house prices

The Halifax building society yesterday revised its forecast of a 5 per cent increase in house prices this year. Britain's biggest building society said it now expected prices to rise by less than 3 per cent this year due to the recession and soaring...

The Times

THU 10 OCT 1991

Fall in house prices dashes market hopes

HOUSE prices fell by 0.8 per cent last month and by 1.1 per cent in the quarter to the end of September, dashing hopes that the market might show signs of recovery by the end of the year, according to figures from the Halifax Building Society yesterd...

The Times

THU 05 DEC 1991

Market weak

House prices fell by almost 1 per cent last month, confirming that the market remains "very weak", the Halifax Building Society said yesterday, publishing its latest figures. For the year ending in November prices declined by 2.4 per cent and are l...

The Times

MON 30 DEC 1991

House prices stuck 'till 1993' 2009 REALITY STARTS TO DAWN 3 YEARS AFTER IT STARTED HAHAHA!!!

THE housing market should begin to recover in the spring, but house prices are unlikely to show real gains until 1993, the Halifax Building Society says in its annual review published today. The review, prepared before the announcement of a rescue pa...

The Times

THU 06 FEB 1992

Prices of houses fall 3.6% in year

HOUSE prices fell by 1.2 per cent last month, the latest Halifax building society house price index shows. It comes after a fall of 1.3 per cent in December and means that house prices are now 3.6 per cent lower than a year ago. Although there are signs of a recovery on the way…

The Times

THU 07 MAY 1992

Lenders split on housing trends

HOUSE prices fell by 0.4 per cent in April, according to the latest Halifax house price index. The average price of a house is Pounds 60,534, 5.5 per cent lower than it was a year ago. The Halifax's figure contrasts with a 0.7 rise in prices recorde...

The Times

FRI 10 JUL 1992

House prices edge up

House prices rose 0.7 per cent last month, the Halifax building society said. The rise, it added, could be a sign that prices were stabilising. "Further recovery remains dependent on improvement in the economy and in employment prospects," a spoke...

The Sunday Times

SUN 09 AUG 1992

House-price market spirals downward towards crisis

FAR from showing even the first flickering signs of recovery, the housing market is plunging deeper into recession, with the situation, according to some experts, now rapidly moving towards crisis. Prices have already fallen longer and further in Lo...

The Times

SAT 05 SEP 1992

House prices down

House prices fell by 0.7 per cent in August, following a 0.4 per cent fall in July, according to the Halifax, the country's largest building society. Prices are 5.4 per cent lower than they were a year ago and the society predicted no upturn in the market for the foreseeable future…

The Times

FRI 09 OCT 1992

Record fall in house prices

HOUSE prices fell by at least 2.8 per cent in September, the biggest-ever monthly fall and equivalent to a one-third cut over a year. The precise figure will be issued today in the respected Halifax price index. It is understood to be at least double...

The Times

SAT 10 OCT 1992

House prices

House prices have now fallen an average 7.5 per cent over the past year, according to the Halifax price index issued yesterday. House prices fell by 3.1 per cent in September, although the seasonally adjusted index figure showed a 2.7 per cent fall....

The Times

WED 06 OCT 1993

Annual rise in house prices

HOUSE prices are now higher than they were a year ago, according to figures for September from the Halifax building society which record a 1 per cent increase on the same month last year the first annual increase in nearly three years. Prices rose 0....

The Times

THU 16 DEC 1993

House price boom predicted for 1994

HOUSE prices will rise by 19 per cent across the country next year, and by 25 per cent in the prime areas of London, according to the research department of Savills estate agent. Savills accurately predicted a fall of 8 per cent for prime central Lo...

The Times

THU 06 JAN 1994 2010 !! Don't buy yet !!!! notice Nationwide still ramping HAHAHAHA

House prices fall, says Halifax

HOUSE prices fell by 0.5 per cent last month, according to the Halifax Building Society's house price index. This contrasts with the Nationwide's experience of an 0.8 per cent rise. The Halifax says that prices rose by just 1.2 per cent for the yea...

The Times

THU 03 FEB 1994

House prices discord

House prices fell by 0.4 per cent last month, according to the Halifax Building Society. The figures conflict with those published earlier this week by the Nationwide, which said that prices rose by 0.4 per cent in January. The Halifax said yesterda...

The Times

THU 14 APR 1994

House prices show first annual rise in all areas A DEAD CAT BOUNCE !!! 2010

HOUSE prices have risen in every region during the past year, for the first time in nearly five years, the Halifax building society said yesterday. Prices in Northern Ireland are on average 9.1 per cent higher than they were a year ago, average price...

The Times

FRI 03 JUN 1994

Fears for housing recovery as prices fall

HOUSE prices fell unexpectedly by 1.6 per cent in May, fuelling fears that the shaky recovery in the housing market is faltering. The Halifax Building Society, which published its monthly house price index yesterday, said that there were "no signs of a recovery …..

The Times

TUE 04 OCT 1994

House prices fall 2.9%

House prices fell last month by 2.9 per cent, their biggest drop since October 1990, the Nationwide Building Society said yesterday. The average price of a house in September was Pounds 53,918, which was Pounds 1,617 lower than in August. But prices...

The Times

THU 02 FEB 1995

House prices

House prices in the United Kingdom fell by 0.8 per cent in January, according to the latest monthly index published yesterday by the Nationwide. The Halifax index, due out tomorrow, is expected to paint a similar picture of a flat housing market. Na...

The Sunday Times

SUN 12 FEB 1995 This is probably the trough fear has turned to resignation the VI's are at most gloomiest Now's the time to buy 2011 !!!!!

House prices set for a `five-year freeze'

HOUSE PRICES are set for a five-year freeze, according to a new City forecast to be published tomorrow. The report, from the investment bank Kleinwort Benson, predicts that prices in real terms will be no higher in 1999 than they were last year. Rea...

The Times

WED 05 APR 1995

House prices fall 1.5% as Halifax piles on gloom

HALIFAX, Britain's largest mortgage lender, will today add further to the misery of 10 million people with home loans when it announces that house prices fell 1.5 per cent in the 12 months to March. As well as house price gloom, the new tax year star...

The Times

WED 03 MAY 1995

Halifax reports further decline in house prices

HOMEOWNERS today receive more depressing news, with the Halifax Building Society reporting that house prices fell slightly in April for the second month in a row. This, together with figures showing weak bank mortgage lending, confirms that there is...

The Times

SAT 03 JUN 1995

Fall in house prices is accelerating says Halifax

FURTHER evidence of the ailing state of the housing market was revealed yesterday amid speculation that the Government is proposing measures to help homebuyers in negative equity. The Halifax Building Society house price index for May showed a third ...

The Times

WED 02 AUG 1995

More gloom for housing as prices keep falling

HOUSE prices fell again in July for the fifth consecutive month and are now 3.1 per cent lower than a year ago, according to the latest Halifax index published today. On the evidence to date, it appears unlikely that prices will recover at all this y...

IN HINDSIGHT THIS WAS THE TIME TO BUY AND LOOK AT THE FORECAST HALIFAX GIVES !!!!

The Times

WED 11 OCT 1995

House prices falling

THE latest survey of house prices published today will paint a gloomy picture of the housing market. Prices across all regions are now 2.6 per cent lower than they were in the third quarter of last year, according to the Halifax. The latest quarterl...

The Times

WED 27 DEC 1995

Halifax forecasts 2% recovery in house prices next year

THE housing market will receive a much-needed boost today from a forecast by Britain's largest mortgage lender of a 2 per cent recovery in house prices during 1996. The Halifax Building Society, in its annual housing market paper, predicts that next ...

The Times

WED 03 JAN 1996

House prices remain lower than a year ago

HOUSE prices are still much lower than they were a year ago in spite of five consecutive monthly increases, according to Britain's largest mortgage lender. The Halifax, which has more than two million borrowers, will announce today that, on an annual...

The Times

TUE 02 APR 1996

House prices rise

BRITAIN'S biggest mortgage lender will today report a March increase of 1.2 per cent in the Halifax house price index. On an annually adjusted basis, the rate of house price inflation in the UK remains positive, at 1.7 per cent, compared with just 0...

The Sunday Times

SUN 05 MAY 1996

House prices continue to rise

RISING confidence in the housing market in April helped to lift property prices for the ninth consecutive month, pushing them back to the level of two years ago. But cheaper mortgages mean homes are more affordable. According to the Halifax's monthly...

And indeed somewhere around 1995 was the bottom of the last housing crash. Points to note it took about 7 years to fully manifest itself and at the beginning denial was very high and the bear market continued until the last bull (The halifax) became a bear! Only then did this - the next bull market start.

DB

Perfect_storm_number_1_article.doc

Perfect_storm_number_1_article.doc

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This time there is a significant difference: inflation is much lower.

How will this affect the correction/crash?

Do you HPCs believe that lower inflation means higher price volatility (in the sense that all the adjustements will have to be carried through higher nominal price drops)? = FASTER CRASH of nominal prices

Or does this mean that interest rates will remain low and therefore the correction will take even longer (i.e. no forced sellers)? = LONGER ADJUSTEMENT PERIOD.

I am still trying to figure this out...

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Guest Daddy Bear

Another great piece on this site that some may have missed:

So is the recent property boom consistent with an asset price bubble, and most importantly will it burst, and how big a bust is likely to occur?

The characteristics of asset price bubbles throughout history and in the modern era have always followed the same pattern. Their graphical projections are always very similar as momentum builds, and also as they go bust and head downwards.

Sound fundamental reasons for an increase in values are eventually overtaken by a speculative frenzy, caused by herding behaviour driving prices to unsustainable levels. During the boom phase no one wants to miss out on the gains, and even professionals who understand the phenomenon ride the wave towards ever higher valuations, justifying their valuations because ‘things are different this time’ that the ‘new era’ means that prices can only ever go up. These phrases have been around since markets began, and both are simply a denial of reality.

Only the object of obsession changes in each new asset price bubble. The participants from generation to generation don’t change their behaviour, they do not learn from the mistakes of their ancestors (although they may be aware of them). In every bubble, ordinary people appear to make fortunes through little or no effort, but these fortunes are an illusion. They will lose them on the way down, because they refuse to suspend their belief in the boom until it is too late.

In every case the media is also complicit in the frenzy, they follow and reflect the social mood back to the public, and magnify the boom through the spread of rumour, hope and reported success, and they are always focusing on the next big thing within the boom. As the bubble reaches it’s climax, their coverage is always at maximum tilt; they are in fact one of the best contrarian indicators. As the bubble begins to deflate, they will consistently call for a ‘soft landing’ declaring the fundamentals to be sound, and say that the return of the good times is just around the corner.

In almost every respect the recent property boom is entirely consistent with an asset price bubble, but only with hindsight will most people believe that it was such. Although the tide of opinion seems to be turning, there are still far too many vested interests still talking up prices, calling for that soft landing, or declaring a new upward trend. There are also far too many individuals, who would not only lose face, but also fortune having literally ‘bet the house’ on the boom.

But property is different isn’t it? It’s a real asset, solid as ‘bricks and mortar’, a safe haven, and of course it always goes up in value. These are the beliefs that have fuelled this boom; people are fooled by the ‘myth of ownership’. Just as they bought dotcom shares on margin, so they borrow to buy their investment property, convinced of it’s ever upward rise in price. They ignore the falls of the early 90’s, and didn’t notice those in the 70’s (disguised by high inflation), they don’t remember the 30’s and have never heard of the Florida real estate bubble - those buying in Dubai today should take note.

The property boom has been bubble like in almost every characteristic, including it’s graphical shape. Sound fundamental reasons for growth have been overtaken by speculation. This growth has been fuelled by a vast expansion of credit; and the media and culture as a whole has been frenzied in its enthusiasm for property. Cautious commentary has been dismissed as the talk of doomsayers, and professionals have justified ever higher valuations, by declaring that the old rules (such as income multiples) are no longer relevant. The boom has fed off itself; the income multiples growing precisely because of the expansion of credit. In an apparently virtuous circle the consumer boom and financial services being driven by re-mortgaging and equity release. As the bubble has developed, investors have sought other markets and sectors both here and abroad, and products both legitimate and fraudulent have emerged to capitalise on the enthusiasm for property, allowing everyone to have their piece of the action. In common with other property bubbles, just as things turn a massive building boom is underway. Ambitious projects are attempting to build the biggest and most expensive, the tallest building in London, and the tallest in the world in Dubai.

Before this project I suspected that current property prices were unsustainable; the boom certainly felt like a bubble, but it was difficult to find anyone who would agree that this was the case, and no-one would agree that prices might collapse. After examining past bubbles and previous property bubbles there seems little doubt that the recent boom was a bubble in both scale and character. Indeed the denial of the bubble itself and the denial of the possibility of a bust is entirely consistent with the group psychology generated by other bubbles. There has never been a bubble that didn’t burst, bricks and mortar or not; these things don’t have soft landings, in fact they usually overshoot valuations on the downside too.

There are commentators around predicting price falls of up to 45% over the next few years, but they are still the minority. Given a rise of 200% since 1995, even a fall of 45% doesn’t seem much, but it would be disastrous for the economy given the level of debt, yet it is possible with an overshoot to the downside.

A fall of about 30% over the next five years would return values to the long term average, and restore a more reasonable ratio of house prices to income, given a moderate growth in earnings. So there’s my prediction for the future, the property bubble should deflate until 2009-2011. Investments held today could still be sold at still high prices as the majority don’t yet believe that prices will fall. Come 2010 brave investors will be able to pick and choose at bargain valuations as most will by then not want anything to do with property; such is the group psychology that creates bubbles and busts.

He's a smart boy. i hope you have read all the other articles on this site - great reading well done HPC.

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First, some myths on the last crash.

Many people allude to the previous crash being caused by a interest rates of 14-15%. Interest rates were this high in 1989 but people were generally used to high interest rates throughout the 1980s and property was priced accordingly. Also, any reference to the rate hike which occurred on withdrawing from the ERM is incorrect as this happened in 1992 (after most of the crash had already happened). Also, the start of the last crash preceded the recession, which only really got going in 1991. Also, interest rates were slashed in the early 90s but this did not revive the housing market.

I am starting to think that it might be different this time (can I hear someone sniggering when I just said that?).

Last time round the big falls were apparently in the early part of the downturn, but this time I think there will be small falls / stagnation for 2006/7 then big falls in 2008. Mainly because there are too many naive FTBs out there who believe all the property hype.

Last time round the biggest pain was in London and the South, I think this time round it is going to be nationwide.

Finally, last time round a lot of the falls in real terms were masked by general inflation. This time round could be different, with big nominal falls.

frugalista

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Fantastic post DB, you've really hid the nail on the head.

Most of the fellows on this site focus on the short term, looking for trigger for this that and the other.

There is a lack of a long term analysis, everybody seems to want a correction tommorow, it will happen but over a 4,5,6 year period within the cycle.

The housing market is an Oil Tanker, Not the Titanic !, Icebergs would be global catastrpohies Meteors, WW3 etc but all we need is stormy seas to slow things down a bit, then a few more punters can jump aboard and push for full speed again.

Most of the bears on this site will be Uber Bulls HPI wise come 2010 (the Roaring 20's).

Sell to Rent, live life for 4 or 5 years (A watched pot never boils [Allthough a sneaky look dosn't do any harm]), and jump aboard on good ship 2009.

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First, some myths on the last crash.

Many people allude to the previous crash being caused by a interest rates of 14-15%. Interest rates were this high in 1989 but people were generally used to high interest rates throughout the 1980s and property was priced accordingly. Also, any reference to the rate hike which occurred on withdrawing from the ERM is incorrect as this happened in 1992 (after most of the crash had already happened). Also, the start of the last crash preceded the recession, which only really got going in 1991. Also, interest rates were slashed in the early 90s but this did not revive the housing market.

I am starting to think that it might be different this time (can I hear someone sniggering when I just said that?).

Last time round the big falls were apparently in the early part of the downturn, but this time I think there will be small falls / stagnation for 2006/7 then big falls in 2008. Mainly because there are too many naive FTBs out there who believe all the property hype.

Last time round the biggest pain was in London and the South, I think this time round it is going to be nationwide.

Finally, last time round a lot of the falls in real terms were masked by general inflation. This time round could be different, with big nominal falls.

frugalista

I am in the North - someone I know bought a house for £60k at the hight of the last housing boom - then she split from from husband and sold the house a few years later for £40K.

The pain was not just in the south.

But I agree that house price inflation has been hihger in the north (compared to the south) this time so I predict more pain in the north this time aorund.

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I am in the North - someone I know bought a house for £60k at the hight of the last housing boom - then she split from from husband and sold the house a few years later for £40K.

The pain was not just in the south.

But I agree that house price inflation has been hihger in the north (compared to the south) this time so I predict more pain in the north this time aorund.

Understood. My comment was just based on the fact that most negative equity last time was in the south, and also that some northern areas did not boom at all last time. But this time some northern areas have boomed ridiculously without any influx of new jobs or anything, so I think there are going to be some pockets of extreme pain up there.

frugalista

PS I was in the south last time round (as a teenager), when I move back to the UK it may well be the north.

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Excellent post Daddy Bear. I hold similar views predicated on a slow erosion of prices over 4-5 years, rather than the short sharp crash in property values which we hope for.

Here's what I posted recently:

Many on this forum, like me, have never predicted a sudden crash. I prefer the term 'price erosion' which will be played out over the next 4-5 years.

I believe HPs will fall at an average of 5% per annum over this period which, by 2010, will have eroded the nominal value of property by 23% (yes, the maths are correct because the erosion is 5% yoy on a declining value). Then factor in the effect of inflation at 2% yoy and the real price of property will be 30% less than now. On that basis property is currently 40% overpriced.

I have been buying and selling property for over 30 years and I have no reason to believe that the fantasy 'new paradigm' has any basis in reality. A 30% drop in the real value of property will restore sanity to an overblown bubble, allow FTBs to buy and existing owners to move up the property ladder; neither of these desirable conditions is currently available because prices are absurdly and unsustainably high.

Edited by Red Baron

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I’ve tried to do some research regarding the last crash. and gave up after concluding

national averages dispersed some of the most dramatic falls.

I was caught up in a significant crash North London N18.

I bought in 1989 for £90k and sold for £56k in 1993. 40% drop in 3 years! (well alright 38%)

Common myths concerning last time.

1. It took 6 years. No, some areas bottomed quicker than others.

2. Property prices fell uniformly. No more expensive property lost their value slower than flats.

3. A ***** was needed to bust the bubble. No the market was heading south already,

the ERM just quickened the pace.

4. Unfavourable Bank lending criteria stopped people from getting mortgages.

No I sold in 1993 within hours of contacting an estate agent, and was approached

by other buyers wanting to guzump my buyer.

I also bought other properties during the 90’s and had no trouble moving up the ladder.

Negative equity caused much more heartache then you will ever read about it on the internet.

It stopped my friends from starting their families, and put them through years of worry and anxiety

forcing them to be unofficial landlords out of necessity to pay bills.

Other factors will speed up this crash, the debt issue will get worse and hit harder next year.

10 year stagnation at peak prices my ar5e.

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fantastic stuff. good work.

i dont know which was my favourite quote they were all so cringe-worthy.

i bet theres a planet same as ours the otherside of the sun where they have just bottomed out.

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Guest Daddy Bear

fantastic stuff. good work.

i dont know which was my favourite quote they were all so cringe-worthy.

i bet theres a planet same as ours the otherside of the sun where they have just bottomed out.

Can i just make clear that all the stuff i posted was taken from THIS WEBSITE. All i've done is put it in a more accessible, summarised form, so please do not credit me.

The last crash was caused by :

1. A bubble had formed

2. Rising interest rates - OK it was alot later when iR hit 13-15% (91/92), etc but the peak was burst by the rising rate cycle

3. Rising unemployment

4. Debt/ lack of consumer spending

If you combine the news headlines with the economic analysis of the other post regarding bubblemania ............ IS THERE ANYONE WHO CAN SAY PROPERTY IS A GOOD BET TO BUY IN THE NEXT TWO YEARS?????? Or is it better to put your money on deposit at 5%???

"CONSUMPTION (e.g. like the last 5 years based on debt) CANNOT GENERATE REAL WEALTH ONLY PRODUCTION CAN. Ask yourself has this economy been based on debt fuelled consumption for the last 5-10 years or manufacturing/oil production wealth??

Property prices will not fall uniformly and there will always be bargains to be had - however it will be alot easier to pick up a bargain in 5 years time then in 1 year time.

WE are on the edge of an economic precipice........I love it....

I challenge any Bulls....

DB

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Excellent post. We need to keep reminding ourselves of how the VIs ramped the market last time and to actually see quotes that mirror what we read and hear everday, is very helpful.

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Guest Daddy Bear

Great thread, with some great postings...

This bear market will take years to play out.

(I agree!)

How about calling the website Houseprice 10yearstagnation.com

(haha- that WOULD be more accurate)

Burnt Before makes some excellent points regarding the lack of uniformity in the speed of the correction. Some areas (like London) may peak sooner, and bottom sooner. Watch "highend areas" like Kensington, as a potential bellwether

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Can i just make clear that all the stuff i posted was taken from THIS WEBSITE. All i've done is put it in a more accessible, summarised form, so please do not credit me.

The last crash was caused by :

1. A bubble had formed

2. Rising interest rates - OK it was alot later when iR hit 13-15% (91/92), etc but the peak was burst by the rising rate cycle

3. Rising unemployment

4. Debt/ lack of consumer spending

If you combine the news headlines with the economic analysis of the other post regarding bubblemania ............ IS THERE ANYONE WHO CAN SAY PROPERTY IS A GOOD BET TO BUY IN THE NEXT TWO YEARS?????? Or is it better to put your money on deposit at 5%???

"CONSUMPTION (e.g. like the last 5 years based on debt) CANNOT GENERATE REAL WEALTH ONLY PRODUCTION CAN. Ask yourself has this economy been based on debt fuelled consumption for the last 5-10 years or manufacturing/oil production wealth??

Property prices will not fall uniformly and there will always be bargains to be had - however it will be alot easier to pick up a bargain in 5 years time then in 1 year time.

WE are on the edge of an economic precipice........I love it....

I challenge any Bulls....

DB

This time it's VERY different for all those FTB GRADUATES!!

Being in debt for the first 3 + years of their working life, 10's of thousands chasing the few 'well paid' starter jobs left - they won't be buying for years to come.

And being VERY debt aware after that experience I am hope many won't be tempted to buy into a slump/crash -ing market.

Crash after minor Slump?

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I can only agree with the general sentiment expressed in this thread. Many people ask what will be the trigger that causes the house price crash. Firslty, the "crash" will, it appears, be many years of falling property prices which, seen in the round, will constitute a crash - after all, houses are not traded like stocks. Secondly, why should there be a trigger at all? What "triggered" the massive drop in house price inflation this [last] year? Interest rates? Um, no. Unemployment rising? Nope. Pure economics: prices have risen to unsustatainable levels and will correct of their own accord.

Happy new year!!

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I still think that with the internet in existence this time round we could see a speedier downturn in prices due to the ease with which we can access sites like this, nethouseprices etc etc, lets hope so anyway.

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Also, I would say that this time, due to all the property programmes, Many people don't see their house as their home, but as a way to make money. If they can't see that they will make a tax free gain, they simply won't buy.

I do think that the penny is dropping around where I live (East Surrey), and as a rwsult there are very few 'sales' of houses, and those that there are hang around 'SSTC or 'under offer' for so long the signs on Rightmove have cobwebs on them.

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Guest Daddy Bear

Very relevant post regarding student debt. These are the new First time buyers - they drive the market from the bottom.

These FTB's are heavily in debt.

1 in 5 students are £15000 in debt or more!!!

The momentum in this market cannot be sustained

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Very relevant post regarding student debt. These are the new First time buyers - they drive the market from the bottom.

These FTB's are heavily in debt.

1 in 5 students are £15000 in debt or more!!!

The momentum in this market cannot be sustained

Given the high competition for graduate jobs with many more graduates chasing fewer jobs you also have to take into account that even those who could buy probably won't because they will need to be very mobile in the first few years of their careers.

A friend of mine has a son who went into a graduate scheme about 4 years ago with a large company. He bought a house when he got married (about 3 years ago). He now has to move to take up a training/probation type post within the company which will lead to promotion. Unfortunately he can't sell his house and is now on the verge of losing his job altogether.

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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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