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Frizzers

Henry Pryor - UK property to fall 50%?

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I have a couple of viewings arranged with an agent this week, i was asking when he was free, he was saying he could do, any day, anytime, what would day would i like. He obviously not busy at all.

Agree with him on the tightening of credit, i think we are seeing it now.

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16 minutes ago, Frizzers said:

24 minute podcast interview with Henry Pryor discussing UK property. Might be of some interest here.

He bets that UK property will fall 50% over the next 10 years

http://aca.st/223502

 

 

So by 2026 it might be the price it was in 2012 (for London at least)?

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25 minutes ago, fru-gal said:

So by 2026 it might be the price it was in 2012 (for London at least)?

What figures are you using?

 Land Reg has London at about £490k today. If you halve that it takes you back to 2006 in nominal. You're also talking twenty years of wage inflation.

Even at 2% per annum twenty years of wage inflation makes a considerable dent in terms of considering a real price.

For the purpose of illustration, if a house worth £245k in 2006 just kept pace with wages it would cost £364k in 2026. The other way to look at it is that if the purchaser was financed 85% LTV in 2006 and earning £40k they'd be at an LTI of about 5.2x. With 2% wage inflation the same individual would be on £59.5k. The same financing in 2026 would make them 3.5x LTI.

Edited by Bland Unsight

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2 minutes ago, Bland Unsight said:

Post of the Decade.

oh really, i think unlikely.? So for which sector was he forecasting? I cant listen on my phone?

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2 minutes ago, Bland Unsight said:

What figures are you using?

 Land Reg has London at about £490k today. If you halve that it takes you back to 2006 in nominal. You're also talking twenty years of wage inflation.

Even at 2% per annum twenty years of wage inflation makes a considerable dent in terms of considering a real price.

For the purpose of illustration, if a house worth £245k in 2006 just kept pace with wages it would cost £364k in 2026. The other way to look at it is that if the purchaser was financed 85% LTV in 2006 and earning £40k they'd be at an LTI of about 5.2x. With 2% wage inflation the same individual would be on £59.5k. The same financing in 2026 would make them 3.5x LTI.

I hope you are right Bland because not only am I sick of all this shit but I am losing the will to care. It's like living through a very slow moving, extremely boring Orwellian nightmare.  A very unremarkable property that I used to rent that was approx 50 sq meters was sold in 2012 for £240k, recently sold at the beginning of the year for £430k, so almost 50% increase. 

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9 minutes ago, Wayward said:

commercial property or resi...? Sorry haven't listened to podcast...but shouldn't conflate the two sectors.

Housing, he has been told by a few property developers that the market is only driven by credit. Three hundred and fifty year lowest cost of credit about to reverse.

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4 minutes ago, Blod said:

Housing, he has been told by a few property developers that the market is only driven by credit. Three hundred and fifty year lowest cost of credit about to reverse.

thanks, well lets hope so...believe it when I see it...

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A long, long, long slide down.
Some will suffer slowly & will drain their will to live, but many will not even notice and many will not care even though they notice. Many who want quick justice may never see it.

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3 minutes ago, fru-gal said:

I hope you are right Bland because not only am I sick of all this shit but I am losing the will to care. It's like living through a very slow moving, extremely boring Orwellian nightmare.  A very unremarkable property that I used to rent that was approx 50 sq meters was sold in 2012 for £240k, recently sold at the beginning of the year for £430k, so almost 50% increase. 

I hope you can forgive me for this, but strictly speaking, on this one, I can guarantee I am right. If you take a base prices of £100 and it then increases by 50% it moves to £150. If prices then halve (reduce by 50%) you go to £75.

Going up by 50% then down by 50% is the same as just going down by 25%. (x + 0.5x)/2= 0.75x

The property you're describing increased by almost 80%. London has done just over 60% up since the 2008 peak.

The argument about nominal prices is separate and just added to highlight that over twenty years in the presence of non-zero wage inflation a 25% fall in nominal  prices is considerably more in real terms.

As to it all being an Orwellian nightmare, I couldn't agree more. 

 

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18 minutes ago, Wayward said:

oh really, i think unlikely.? So for which sector was he forecasting? I cant listen on my phone?

What kind of self-respecting HPCer doesn't know who Henry Pryor is? Next you'll be telling me that you don't know who Fred Harrison is. :rolleyes:

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19 minutes ago, Wayward said:

oh really, i think unlikely.? So for which sector was he forecasting? I cant listen on my phone?

 

Just now, Bland Unsight said:

What kind of self-respecting HPCer doesn't know who Henry Pryor is? Next you'll be telling me that you don't know who Fred Harrison is. :rolleyes:

Unless this is all some kind of subtle double-bluff and you are Henry Pryor. [Searches for tin-foil hat]

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4 minutes ago, Bland Unsight said:

I hope you can forgive me for this, but strictly speaking, on this one, I can guarantee I am right. If you take a base prices of £100 and it then increases by 50% it moves to £150. If prices then halve (reduce by 50%) you go to £75.

Going up by 50% then down by 50% is the same as just going down by 25%. (x + 0.5x)/2= 0.75x

The property you're describing increased by almost 80%. London has done just over 60% up since the 2008 peak.

The argument about nominal prices is separate and just added to highlight that over twenty years in the presence of non-zero wage inflation a 25% fall in nominal  prices is considerably more in real terms.

As to it all being an Orwellian nightmare, I couldn't agree more. 

That is truly worrying if prices are ultimately going to be set by what people can actually afford. We might be looking a drops greater than 50%.

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1 minute ago, Bland Unsight said:

 

Unless this is all some kind of subtle double-bluff and you are Henry Pryor. [Searches for tin-foil hat]

no I dont no know who he us, pretty sure I am not alone. We live and learn, I will google him. There is only so much hpc material I can read before I find it too depressing.

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Just now, Wayward said:

no I dont no know who he us, pretty sure I am not alone. We live and learn, I will google him. There is only so much hpc material I can read before I find it too depressing.

A coded message masquerading as a typo. I'm reading you loud and clear Henry. Keep up the good work.

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3 minutes ago, Blod said:

That is truly worrying if prices are ultimately going to be set by what people can actually afford. We might be looking a drops greater than 50%.

Your understanding of the word 'worrying' must be different to mine...

Or this another example of the difficulties of sarcasm on the Internet ;)

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I'm afraid this is probably about right.

Afraid?  We're going to have a slow grind which will beat up property prices up to about 2030.  As has been said, this is no good for people here who want to buy a nice place to settle down and raise the kids -- they'll have left school before the prices have dipped to something reasonable.  IMO we'll have years of people trying to 'time the dip', supporting the slow grind rather than a proper correction back to something sustainable.

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5 minutes ago, Bland Unsight said:

I hope you can forgive me for this, but strictly speaking, on this one, I can guarantee I am right. If you take a base prices of £100 and it then increases by 50% it moves to £150. If prices then halve (reduce by 50%) you go to £75.

Going up by 50% then down by 50% is the same as just going down by 25%. (x + 0.5x)/2= 0.75x

The property you're describing increased by almost 80%. London has done just over 60% up since the 2008 peak.

The argument about nominal prices is separate and just added to highlight that over twenty years in the presence of non-zero wage inflation a 25% fall in nominal  prices is considerably more in real terms.

As to it all being an Orwellian nightmare, I couldn't agree more. 

 

The worst thing is that this obsession with property has made people increasingly dull. So much has been invested (both financially and mentally) in property wealth that it has sucked a lot of humor and fun out of life. I have witnessed the beloved city of my youth turned into something pretty monstrous, all the music venues I used to go to in my teens and twenties have been replaced by chain bars and offices and so many other areas are threatened with the monoculture that this kind of wealth mentality brings (I am not sure if you are familiar with China Town in Soho but the restaurants are slowly being priced out). It's not just the unique places that are disappearing but everyone has become very money grabbing and joyless, that's my depressing experience of London over the past 15-20 years anyway...:(.

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7 minutes ago, Wayward said:

no I dont no know who he us, pretty sure I am not alone. We live and learn, I will google him. There is only so much hpc material I can read before I find it too depressing.

Also for someone with a Goya painting of Saturn devouring his son as an avatar, a personal fave of mine BTW, you sure don't seem to be the kind of Bantersaurus Rex the avatar would suggest.

I was pretty depressed till I started reading this thread. Now I see the depression knocking here around in response to the prognostication of 50% falls I feel better, simply by virtue of having beheld the depths plumbed by others. I think I'll put some laundry on by way of celebration.

Edited by Bland Unsight

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4 minutes ago, dgul said:

I'm afraid this is probably about right.

Afraid?  We're going to have a slow grind which will beat up property prices up to about 2030.  As has been said, this is no good for people here who want to buy a nice place to settle down and raise the kids -- they'll have left school before the prices have dipped to something reasonable.  IMO we'll have years of people trying to 'time the dip', supporting the slow grind rather than a proper correction back to something sustainable.

 

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3 minutes ago, SE10 said:

Your understanding of the word 'worrying' must be different to mine...

Or this another example of the difficulties of sarcasm on the Internet ;)

The worrying element is overdosing on schadenfreude.

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