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dogbox

Although Im Bearish Lately...

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Interest rates remain low and London IMO has been sluggish for over 2 years. As a result I beleive pent - up demand will burst onto the scene thereby producing 8 - 10% price growth by the Summer.

Happy hunting campers.

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Interest rates remain low and London IMO has been sluggish for over 2 years. As a result I beleive pent - up demand will burst onto the scene thereby producing 8 - 10% price growth by the Summer.

Happy hunting campers.

Contrary to most people's understanding, IR are at historically high levels. What must be looked at is the amount of the repayment not the IR of the loan. Debt levels have already breached breaking point for significant numbers giving rise to accelerating repossession rates, bankruptcy and pressure on banks to reign in further loans. The P/E ratios for houses in the London area are second only to San Diego California where a correction is already underway. The next significant move in prices must be to the downside or the bubble will burst with catastrophic results and possible bank failures.

Edited by Realistbear

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Its not a case of won't buy..

For 99% of FTB's its can't

They are finding ways. Many can afford £26.00 per day, £1.08 per hour interest on £200000 (4.7%).

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They are finding ways. Many can afford £26.00 per day, £1.08 per hour interest on £200000 (4.7%).

Not with a retail collapse going on. Or do you still cling to the idea that retail sales are strong?

On this topic, has anyone noticed the continual sales going on in EVERY shop in London? Since November, there've been sales continuously, and they're still going on.

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Interest rates remain low and London IMO has been sluggish for over 2 years. As a result I beleive pent - up demand will burst onto the scene thereby producing 8 - 10% price growth by the Summer.

Happy hunting campers.

No!

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They are finding ways. Many can afford £26.00 per day, £1.08 per hour interest on £200000 (4.7%).

Some will, but there is an amount that must for the market to be sustained and not enough can or will.

I could, but I am aware that not enough will, the market follows the herd. On the way up and on the way down.

Not enough will.

Takes a while for the market to change when that is the case.. but change it will and that cannot be argued.. it is simple also to monitor with eyes and ears what is happening round you..

and in my area it is clear thinking that shows reduced sales, reduced prices and changing sentiment.

clear thinking not wishfull thinking...

My head is clear. this is just a market like anyother

Edited by apom

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I do think it's perfectly possible for London prices to go up while the rest of the Southeast (possibly including outer London) continues the fall that has started this year. Prices here in a lot of areas stagnated a few years ago while other less desirable areas kept climbing so there is an imbalance at this stage. People have been buying rubbish just to get on the "ladder", so rubbish areas have kept rising almost to the level that the nicer areas stagnated at. Good London areas are thus not costing much more than bad London areas, or than crappy towns outside London, where there used to be a really significant difference. I think London will be a big mixture of micromarkets as the imbalances work their way out. That might result in an slight rise or fall, or more stagnation overall. But overall I think London will either fall less than areas outside, or will rise slightly while other areas fall

I think people here want to deny London can rise because of the mantra that where London leads the rest of the country follows. So London drifting up looks like a bad omen for the crash in general. but I don't think you should take it that way. It's relatively normal for property in London to be well beyond normal income multiples. It's not at all normal for places like Tunbridge Wells, St Albans etc (just a couple of random examples) and those places certainly have to fall, whatever the next move is in London.

Realist, when you say "Contrary to most people's understanding, IR are at historically high levels." don't you really mean that people's repayments and debt commitments are at historically high levels? You're making an important point because that is why there is not much slack left in the system before people start to go under, but saying IRs are at a historic high seems simply wrong.

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Realist, when you say "Contrary to most people's understanding, IR are at historically high levels." don't you really mean that people's repayments and debt commitments are at historically high levels? You're making an important point because that is why there is not much slack left in the system before people start to go under, but saying IRs are at a historic high seems simply wrong.

I thought he was referring to real interest rates (i.e. nominal rate - inflation).

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Realist, when you say "Contrary to most people's understanding, IR are at historically high levels." don't you really mean that people's repayments and debt commitments are at historically high levels? You're making an important point because that is why there is not much slack left in the system before people start to go under, but saying IRs are at a historic high seems simply wrong.

I think its the same thing. What is crucial is the amount of debt compared with earnings. Low IR and high levels of debt are no different to High IR and low levels of debt as the repayment is the same. What I see happening is the delusional attraction people have to going into debt thinking that IR are at historic lows. I should perhaps have said the effects of IR are at historic highs relative to income.

Edited by Realistbear

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I think its the same thing. What is crucial is the amount of debt compared with earnings. Low IR and high levels of debt are no different to High IR and low levels of debt as the repayment is the same. What I see happening is the delusional attraction people have to going into debt thinking that IR are at historic lows. I should perhaps have said the effects of IR are at historic highs relative to income.

i think it isn't the same thing

low interest rates and high levels of debt are a lot worse than high interest rates and low levels of debt its just that the general public haven't realised it yet.

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...I should perhaps have said the effects of IR are at historic highs relative to income.

I think that's better because it's more accurate. I completely agree with your point though. Low interest rate are feted as the reason prices won't fall, but people are very close to the edge because their repayments and debt levels are at unsustainable levels.

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Interest rates remain low and London IMO has been sluggish for over 2 years. As a result I beleive pent - up demand will burst onto the scene thereby producing 8 - 10% price growth by the Summer.

Happy hunting campers.

We all have a right to oppinion. Any reason for your quirky mad cap prediction - if people can't afford to buy houses then what will make this happen.

Buzz word affordability a.k.a overpricing and it has to change.

Interest rates remain low and London IMO has been sluggish for over 2 years. As a result I beleive pent - up demand will burst onto the scene thereby producing 8 - 10% price growth by the Summer.

Happy hunting campers.

You are not bearish you fibster.

You are bullish.

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Not with a retail collapse going on. Or do you still cling to the idea that retail sales are strong?

On this topic, has anyone noticed the continual sales going on in EVERY shop in London? Since November, there've been sales continuously, and they're still going on.

There has not been a retail collapse.

There are sales because it's January. January sales. They usually happen this time of year.

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They are finding ways. Many can afford £26.00 per day, £1.08 per hour interest on £200000 (4.7%).

IMHO Er...NO! They're not affording it at all, they're just kidding themselves(and the banks). I can rent for less than this and be saving money and not have the risk of losing a large sum of money. Why would you just want to cover the interest payments on an overpriced property? I know people who have bought and are pleased that they have managed to knock off 30K on 2 beds etc, the penny hasn't dropped that they themselves might lose the same amount again in the next 6months to a year. A baptism of fire into the housing market!

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Dogbox, have a look at the graph.

This retail slump is just the start of something very nasty...

(open the graph, and click it again to enlarge)

Recessions_and_the_housing_cycle.GIF

post-1529-1138466568.gif

Edited by BandWagon

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Guest Bart of Darkness

There has not been a retail collapse.

There are sales because it's January. January sales. They usually happen this time of year.

There were sales in November too, which continued unabated into December, which have continued unabated into January and look set to continue unabated into February too. I know the January sales start earlier every year but...

Try telling MFI that there hasn't been a retail collapse. :P

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Interest rates remain low and London IMO has been sluggish for over 2 years. As a result I beleive pent - up demand will burst onto the scene thereby producing 8 - 10% price growth by the Summer.

Happy hunting campers.

:lol: Sniper post!

Actually it is possible (although i think unlikely) that you'll be right, if we have a complete collapse in volume and only the Uber high 1 Million + sell then yea it will skew/mislead the figures. Thats the only way i can see anything like 8%-10% HPI for london by summer but its possible.

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They are finding ways. Many can afford £26.00 per day, £1.08 per hour interest on £200000 (4.7%).

How much is that per nanosecond?

Most find it difficult to work out finances in such large time units like hours!!

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Guest Cletus VanDamme

Interest rates remain low and London IMO has been sluggish for over 2 years. As a result I beleive pent - up demand will burst onto the scene thereby producing 8 - 10% price growth by the Summer.

Happy hunting campers.

I've been watching the prices of flats in the Barbican for a few years now. In mid-2003 it was possible to get a 1-bed split level flat there for just below £250K. I almost bought one, and have slightly regretted it since. Why? Now you are looking at over £300K. No signs of slowdown there.

As someone else on this thread said, you will always have micromarkets in London. Prime areas in London will not crash (Hampstead, Highgate, Kensington etc), and may continue to rise when all else around is falling.

Cletus

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I've been watching the prices of flats in the Barbican for a few years now. In mid-2003 it was possible to get a 1-bed split level flat there for just below £250K. I almost bought one, and have slightly regretted it since. Why? Now you are looking at over £300K. No signs of slowdown there.

As someone else on this thread said, you will always have micromarkets in London. Prime areas in London will not crash (Hampstead, Highgate, Kensington etc), and may continue to rise when all else around is falling.

Cletus

Totally agree.

I have feared (as a City-based STR) for some time that prices could rise in 2006 anywhere City-dependent (Islington, Clerkenwell, City, Docklands, Wandsworth, Kensington, Holland Park, Notting Hill, Richmond etc).

It's not about bonuses so much as overall employment levels and wages, which have been recovering for a while in the City now. In 2003 you were lucky to keep your job, something like 40,000 people were fired, and many saw total pay cuts for a number of years (if you include bonuses in total pay). Pay only started going up once again last year and the job market is now quite tight once again.

Mid-2003 was very weak for housing in City-dependent areas, even if the rest of the country was going absolutely ballistic due to interest rates at 3.5%.

In summer 2005 there was still plenty of supply in Central London but when people finally realised the markets were doing well, so commissions were nicely up, so bonuses could be up, plus there was a interest rate cut, much of that supply got mopped up and prices have definitely risen since then.

The firming of the market has been real in these areas, although it does look more like spin outside. The problem is that the headline Rightmove figures that get reported are meaningless, because some areas in London are now very strong (after a weak 3 years) but the market seems to be on the edge of a crash outside London.

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Interest rates remain low and London IMO has been sluggish for over 2 years. As a result I beleive pent - up demand will burst onto the scene thereby producing 8 - 10% price growth by the Summer.

Happy hunting campers.

Pent up demand just can't afford it round my bit of London (NW3). I am looking at properties sticking unsold at unchanged prices for up to 2 years now and very few sales. 8-10% growth in London sounds barking to me Mr Dogbox. :lol:

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lets do the maths on that 26 pound a day

most people only work 40 hour weeks

so (26 x 7)/40

so now the figure is £4.55 per hour for every hour worked

and this is just to pay the intrest on an average home for the average pay.

add in council tax at say average 1600 per year = (1600/52) = 30.79 per week / 40 hours worked = 0.80 pe4nce per working hour

So now were at £4.55+ 0.80 = £5.35 per hour

there is no way you can heat yourself for less than £20 week me thinks on average so thats (20/40) = m£0.50

were up to £5.85 now for the average guy in his average home for each hour he works on a intrest only mortgage

Add in some food and a car or rail fares, a dash of whisky on a friday and the repairs to the house and the odd trip to b&q

And were most definetly up to about £8 per hour worked just to have the bare basics of life on purchasing the average house.i aint added in telephone/internet/insurance,tv licence and all they other little convieniences that we all have no matter what some will deny as luxuries.

so stick your £1 an hour to own a average house up yer ass.

edit

i would like to add this is of course after paying tax and national insurance

now can the bulls not see clearly how this cannot continue

Edited by homeless

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low interest rates and high levels of debt are a lot worse than high interest rates and low levels of debt its just that the general public haven't realised it yet.

Debt, is debt is debt.

Whatever the interest rate, it still needs to be repaid. The rates are comparatively low today, maybe this is a good opportunity to repay as much as possible. Rates only need to increase slightly and some people will have a huge shock coming to them.

We will then see if house prices will be increasing 8% to 10%.

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Thanks for the replies.

London and surrounding, I am almost certain will enjoy 8 - 10% price growth.

I cant help noticing that some of you are already citing reasons for anysuch growth that seek to shore - up your bearish views that growth can only be extremely localised or scewed by v expensive property in London.

You might just have to accept that price growth will be accross the board in London and surrounding.

Notions of 3 x salary as a 'fundamental' are strictly for the history bin.

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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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