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London Falling

End of the property boom?

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3 hours ago, London Falling said:

Surely once sentiment turns, prices don't just 'flatline', hoping for some serious drops to come...

You often see these "flatline" predictions, but HPI is hugely sentiment driven in both directions and is almost always either going up or down - usually fairly rapidly. Someone correct me if I am wrong but I don't think there is any recent historical precedent for "flat" house prices - certainly not in real terms, at least.

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4 minutes ago, London Falling said:

Fair point hotairmail. It's been a frustrating wait to say the least.

+100000000000000

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1 hour ago, Diver Dan said:

Since so much of the financial system depends on forever hpi, any slowdown in the rate of inflation let alone a flat-line could spell disaster

Agreed that our entire economic system is based on it.

But disaster?

If people were encouraged to live within their means without pledging their lives away and allowing banks to create funny money that's a bad thing how?

If people understood 'economic growth' was an accounting trick and looked for more worthy pursuits rather than physics grads going into banking, that would be bad?

if we stopped pillaging the planet and worked out we have an abundance of tat already, and a massive distribution problem the world would be worse?

At some point humanity will have to take some pain because of the grotty system whatever. 

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19 minutes ago, Frugal Git said:

Agreed that our entire economic system is based on it.

But disaster?

If people were encouraged to live within their means without pledging their lives away and allowing banks to create funny money that's a bad thing how?

If people understood 'economic growth' was an accounting trick and looked for more worthy pursuits rather than physics grads going into banking, that would be bad?

if we stopped pillaging the planet and worked out we have an abundance of tat already, and a massive distribution problem the world would be worse?

At some point humanity will have to take some pain because of the grotty system whatever. 

Ok. Maybe not a disaster for me personally, but a lot of the people who've treated anyone putting forward any sort of hpc opinions like they're a Casandra are probably going to be rinsed.

Edited by Diver Dan

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The article still pumps up expectations and peddles the "it's not the price that's the problem, it's 'the' deposit" attitude :(

Quote

Cook said he expected first-time buyers to face “significant ongoing challenges in raising a deposit without financial assistance”, and that schemes such as the help-to-buy equity loan “look like they will need to become long-term features of government efforts to sustain housebuilding and home ownership”.

HTB "will need to", will it? F**k off no it won't "need" to. Grrr

 

 

 

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11 hours ago, London Falling said:

https://www.theguardian.com/money/2016/nov/04/end-property-boom-uk-house-prices-flatline-savills-forecast

Looks like sentiment is finally turning in the mainstream media. Surely once sentiment turns, prices don't just 'flatline', hoping for some serious drops to come...

..the London market is corrupted buy overseas money laundering ...only a fool would place their money there...more so with Government intentions to quell the illegal practices ....is it worth watching until they take action ..?...over to you Government ...or?.....are you, the Government, part of the problem due to inaction......?.....:rolleyes:

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14 hours ago, Diver Dan said:

Ok. Maybe not a disaster for me personally, but a lot of the people who've treated anyone putting forward any sort of hpc opinions like they're a Casandra are probably going to be rinsed.

Cassandras are correct,  by definition.

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remember that "IO mortgage timebomb"

Moneybox (R4 BBC) today were going on about it.  Two cases where people were misled by the wording INTEREST ONLY MORTGAGE complaining banks want their money back at term.

Ombudsman had 450 odd complaints, upheld only 70 or so...

Of course, the poor woman didnt understand because she was old when she took out the mortgage in 1991, retired now.

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29 minutes ago, Bloo Loo said:

remember that "IO mortgage timebomb"

Moneybox (R4 BBC) today were going on about it.  Two cases where people were misled by the wording INTEREST ONLY MORTGAGE complaining banks want their money back at term.

Ombudsman had 450 odd complaints, upheld only 70 or so...

Of course, the poor woman didnt understand because she was old when she took out the mortgage in 1991, retired now.

Ignorance is not a defence in a court of law.......

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1 hour ago, Diver Dan said:

But never believed and often ridiculed or shunned.

Yes, not because they are believed to be a Cassandra though, which you seemed to suggest. A silly diversion off topic anyway, and you're right lot of them are going to feel silly even if they don't get rinsed. Any hope we won't be up back here in another 20 years? Probably not, eh?

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2 hours ago, satch said:

The property boom should end but at the moment it only takes £10,000 per year to pay the interest on a £1,000,000 mortgage (ie 1%) the capital is somewhat of a different matter but there is still the strong belief that prices always rise and so the £1,000,000 1 bed flat in Battersea will be worth £2,000,000 in a few years ..... fingers crossed and then it can be sold and you take the million profit and sale off into the sunset.

The plates are still spinning despite all logic saying they should come crashing down .................

Freudian?

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18 hours ago, mikthe20 said:

IO mortgages will be the next PPI.

Very few on HPC believe this to be the case because BTL is unregulated. 

I still think it will be as the BTL'ergraph find examples of vulnerable customer on IO (perhaps non BTL) then start to grease a campaign. Then the BBC join a perhaps FOS uphold a few and then the claim firms spring up 'have you got an interest only mortgage' 

Banks have tens of thousands of staff dealing with PPI and set aside billions. Half the claims are from customers who don't have PPI.....but they cost a fortune looking at to reject. Then the DPA requests...can I see all the data please (sent by these claim firms on behalf of clients to 20 banks to search for a PPI). 

I get the genuine PPI claims, I get the banks deserve this....but let's not underestimate these IO borrowers will feel just as entitled as the PPI customers (who don't even have PPI). A bank makes lots of money so everyone feels entitled to some of it.....

Package bank accounts bubbling along.....I take out one for the travel insurance but realise there are other benefits too which I don't need. "I didn't know I had AA insurance with this account I just didn't need it". Does matter that I knew it was £5 a month and that nicely covered my annual travel insurance....I see an opportunity to blame someone and get free money. 

Blame culture all the rage. Fueled by claims firms....joe public can enjoy it and forget who is really paying for it. Ie Other bank customers and share holders.....and maybe the odd Bank Exec who takes £4m home that year instead of £4.2m. 

Interest only will not be as big as another PPI......but I believe there will be some fall out. If it's not regulated then it will be 'an unfair contract' or 'breach of some other consumer regulation'. 

Buyer beware......yeah right. Claim what you can, the banks deserve it will be the cry. Some BTL'ers have been so niave and feel so entitled that their blood will 'literally boil' until they get some pennies from someone. How on earth could this be their fault....they are not the experts, the banks are. 

Outcome will be some nasty shocks as BTL'ers are asked to move from IO (I give it 5 years before this happens). The banks way of 'trying to protect those customers' or put it another way the banks way of saying 'fair enough, f5ck you IO customers'. 

A little bit like those who needed and claimed PPI...try buy it now. Try buying a life policy from a bank. And in 7 years it will be no IO (a good thing) and no fancy bank accounts. Just plain old current account charging £5 a month and 50p a cheque and 25p a standing order....like the old days. If you don't like it then go to the bank down the road charging £4.50. 

I know the comparisons are not the same but my long rant is the general manipulation of consumer protection being over used. But needed to splurge it out because I know the BTL'ers not only caused damage to HPI (which the other examples PPI, packaged, life insurance did not) but those BTL'ers look to feel 1000x more entitled too. 

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And to go back to thread.....levelling out means plummeting. 

The index is based on sales and many will not sell unless they get their daft price (and yes some numpty will pay it) therefore the index 'levels' and number of sales drop  

But for those FTB'ers out there do not mistake that for a solid market....if someone needs to sell, they need to sell. So it won't be the best plot on the street and it won't be that vicarage at the top of the high street everyone loves. But those 40/50% discount bargains will be there. Maybe a little unkempt and unloved....but that's the real market and it's coming to a high street near you. 

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