House price crash expected - The Times

[Princekie]

53 minutes ago, macca13 said:

My reason to believe in a house price crash is this: What happens when generation rent retire? Who pays the rents? Who pays the retirement home cost when they have no money/assets to sell? 

I think there has to be some point of collapse simply because the government can't pay for everyone.. so it's mass poverty or collapse or both.. I don't see cupcakes and rainbows with these rent prices.. 

Thank you.

Let's bring a bit of fiscal reality to the table, because believe me the only people that benefit in ignorance and gullibility are Estate Agents, Banks and Vendors.

We've had a nice boom over a 15-20 yr period. Boomers and early Gen X'ers got houses for little money and sold 'em on for "mad gainz". Or alternatively rented property out (for mad gainz).

However even after 20 years, most housing is still in the hands of boomers. A good proportion of those boomers (roughly 4 million) live alone, with no company and only a TV for entertainment. A good proportion of Xers are skint. And the Millenials are stuck with high student debt, high rents and rubbish jobs. So we could safely say that the "good life" is still firmly in the hands of the older generation, who can milk the equity from the homes and live the high life.

Thing is, in general housing is overpriced at this time, and the ability to meet vendors demands have been met by banks who'll happily lend at ridiculous rates in order to keep the bubble going. When more of these boomers start dying off, and more and more large homes start coming onto the market, how viable will these high prices be? Who will buy the plethora of deteriorating cottages in the back end of nowhere, the rotting bungalows, the 70s pebbledashed pigstys?? 

Net migration is low. The economy is in the doldrums. The Chinese don't want their money leaving the country. UK birth rate is low, with many Brits leaving parenthood until their late thirties (when conception/fertility rates are at their lowest). The gap between rich and poor has never been wider. Boomers are due to leave this mortal coil soon. All bets on crazy multiples are off. Demographics is destiny.

Edited September 18, 2017 by Princekie

[Bruce Banner]

20 minutes ago, Princekie said:

............Boomers are due to leave this mortal coil soon.

Aye, we are, but not yet........ not yet...... 

 

[Rave]

11 hours ago, Tapori said:

 

[Richmond]

8 hours ago, Thorn said:

I share this...but on the other hand, I think the main angle keeps coming back to this question-  should I buy a family home now, or can I still have a life and get it with Less Debt in the future. 

To chip away at this question, this forum has been a great Resource.

None of us know- but my gut instinct is watch and wait and get informed right now and try and keep the show on the road in the meantime- and aim for the Less Debt option.

I think it's going to get interesting. 

True. Note I wasn't suggesting anyone should be rushing out to buy at these prices. I was commenting on whether someone who already owns a family home with enough equity to make STR worthwhile would be 'gambling'. If you need or have large amounts of debt then I would argue no, take the punt. But lets say you bought in the 90s and only owe say £20k on a property now worth £800k. Should you STR? 

7 hours ago, Beary McBearface said:

Arthur Dent's Social History of the Bubble Monkeys

The monkeys loved the bubble. You could tell that they loved the bubble because some of them took a phrase that warned them against leveraged investment on assets with frothy prices and used it to suggest that rushing into crappy houses at top prices was a matter of considerable urgency. Looking back on things it's pretty clear that the arrival of the Vogons was a blessing in disguise. They took thoughts about solvency and rationality and freshened them up in the pitiless vacuum of space.

Not what I was suggesting. I would say taking a 700k mortgage on an 800k property is equally gambling and likely to leave you insolvent. It was directed more at high equity low loan STR.

[Patient London FTB]

9 hours ago, Princekie said:

Thank you.

Let's bring a bit of fiscal reality to the table, because believe me the only people that benefit in ignorance and gullibility are Estate Agents, Banks and Vendors.

We've had a nice boom over a 15-20 yr period. Boomers and early Gen X'ers got houses for little money and sold 'em on for "mad gainz". Or alternatively rented property out (for mad gainz).

However even after 20 years, most housing is still in the hands of boomers. A good proportion of those boomers (roughly 4 million) live alone, with no company and only a TV for entertainment. A good proportion of Xers are skint. And the Millenials are stuck with high student debt, high rents and rubbish jobs. So we could safely say that the "good life" is still firmly in the hands of the older generation, who can milk the equity from the homes and live the high life.

Thing is, in general housing is overpriced at this time, and the ability to meet vendors demands have been met by banks who'll happily lend at ridiculous rates in order to keep the bubble going. When more of these boomers start dying off, and more and more large homes start coming onto the market, how viable will these high prices be? Who will buy the plethora of deteriorating cottages in the back end of nowhere, the rotting bungalows, the 70s pebbledashed pigstys?? 

Net migration is low. The economy is in the doldrums. The Chinese don't want their money leaving the country. UK birth rate is low, with many Brits leaving parenthood until their late thirties (when conception/fertility rates are at their lowest). The gap between rich and poor has never been wider. Boomers are due to leave this mortal coil soon. All bets on crazy multiples are off. Demographics is destiny.

Good post. Needs a nice chart to echo the point in bold. 

 

[Mapatasy]

9 hours ago, Princekie said:

When more of these boomers start dying off,

...at a rate of 3% a year I read somewhere recently!

[Venger]

Just read the ST article, and got to it from a link in this article... 

Interesting.

Quote

 

Interest rates and London house prices begin return to reality
By Paul Hodges on 2 October, 2017 in Financial Events

 But fears over a hard Brexit have already led many banks, insurance companies and lawyers to start moving highly-paid people out of London, as the City risks losing its “passport” to service EU27 clients.  Over 50% of surveyors report that London house prices are now falling, just as a glut of new homes comes to market.  In the past month, asking prices have fallen by £300k in Kensington/Chelsea, and by £75k in Camden, as buyers disappear.

The next question is how low could prices go if they return to the mean?  If London price/earning ratios fell back from today’s 12x ratio to the post-2000 average of 8.2x level, average prices would fall by nearly a third to £332k.  If ratios returned to the pre-2000 level of 4.8x earnings, then prices would fall by 60% to £195k.

 Most Britons now expect a price crash within 5 years, and a quarter expect it by 2019.  Brexit uncertainty, record high prices and vast over-supply of new properties could be a toxic combination, perhaps even taking ratios below their average for a while – as happened in the early 1990s slump.  As then, a crash might also take years to unwind, making life very difficult even for those who did not purchase when prices were at their peak.

http://www.icis.com/blogs/chemicals-and-the-economy/2017/10/interest-rates-and-london-house-prices/

 

 

 

On 18/09/2017 at 7:35 AM, Richmond said:

True. Note I wasn't suggesting anyone should be rushing out to buy at these prices. I was commenting on whether someone who already owns a family home with enough equity to make STR worthwhile would be 'gambling'. If you need or have large amounts of debt then I would argue no, take the punt. But lets say you bought in the 90s and only owe say £20k on a property now worth £800k. Should you STR? 

Not what I was suggesting. I would say taking a 700k mortgage on an 800k property is equally gambling and likely to leave you insolvent. It was directed more at high equity low loan STR.

Entirely their choice, providing they don't moan and whine about any falls/deep falls in value of their 'asset' should the market turn hard down on them, with it later worth far less than £800,000.   No one prevented them from selling, or looking to sell, and accepting a price many many many more times that what they paid for it.

Money they could have downsized with, and live a very good lifestyle with the remainder.

You can't have it both ways, and no need for the control-squad-superiors to claim them as victims either, all because they chose not to sell.... held of for ever higher prices when market began to turn down, and their neighbours/houses nearby accept much lower prices, bringing the value of their £800,000 down by market reality (what other houses sell for).

That's how all price went up, including your example where bought in the 90s and worth £800,000 today.  Other people bought houses at ever higher prices, pushing up the value of the 90s house, for that owner, without them having to do much at all.  (Maybe some money spent on improvements, modernisation/extensions, having some affect, but only a little)

And prices can go down in the same way, but other owners/sellers accepting less.

h/t @Mapatasy

 

Quote

 

http://uk.reuters.com/article/uk-britain-eu-housing/londons-housing-market-stalls-time-to-buckle-up-idUKKBN1CB0PS

Valentino said he bought his house in the early 1990s for £175,000

Valentino, a 59-year-old businessman, lowered the price of his four-bedroom house by £75,000 pounds [from £935,000] to £860,000 but still found no takers.

For now, Valentino is sticking with his plan to sell but he balked at his estate agent’s advice to drop the price a second time.

“Too low,” he said. “We will probably wait and hope things get better.”

“Too low,” he said. “We will probably wait and hope things get better.”

“Too low,” he said. “We will probably wait and hope things get better.”

 

 

[Venger]

Re ST long article.

She (they) is clearly seeking as much publicity as possible so surely no harm quoting this part, although redacting mobile tel number and email, from search-bots, as a courtesy to the individual, to prevent any possibility of them getting junk emails/calls etc from those who trawl data of webcrawler thingies.

Will just give the facebook link.

Quote

 

For Celia Walker, the situation is quite the reverse. A former oil broker in her early fifties, she is quite simply stuck. She has already bought her dream home, a Georgian renovation project in the Cotswold village of Filkins, but despite having put her Oxford house on the market a year ago, and her willingness to slash the price by millions, she remains without a buyer.

She was advised by an estate agent a year ago to market her sprawling seven-bedroom Victorian-style property near the Dragon prep school, with elaborate plasterwork, underfloor heating, temperature-controlled wine storage and half an acre of walled gardens, for £9m, as they had valued it at £8.4m. Walker deemed that greedy and put it on for £7.95m after researching what comparable homes in the area had recently sold for. She has had 20 viewings since then, but, although she has reduced the price twice — to £6.95m in March, then to £5.95m in June — she has had only a few “serious but low” offers.

“I have just completely missed the market,” says Walker, who is now trying to sell the home herself (07811 ******, celia.w*****r15@gmail.com). “Viewers have said they love it, but are concerned about prices plummeting and the uncertain economic conditions.”

 

Dream home 1 and previous Dream Home trying to sell with passion, still on the market.

Everyone's got a dream...  England Football Manager position?  I should have it for it's 'my dream'.  Ahh it's their dream bless, good on um.

On Facebook it suggests it's a newbuild.  Not sure what year it was built.

She/they are promoting it on Facebook.

https://www.facebook.com/CeliaWalkerEstates/

In other circumstances could think it's quite amusing they've chosen to try and sell high-priced property in this way.  Question their reasons for doing so.  To save paying out EA commission?   Depends on what they can sell it for. 

They've had it listed with Savills at some point.

15 Northmoor Road Oxford OX2 6UW

It is truly beautiful.
We have viewings being scheduled for this week.

Oh it is still on with Savills.  

Hmm.

http://www.rightmove.co.uk/property-for-sale/property-58080400.html

I don't have any price-tracker plugin on my browsers for the moment.

So she/they going for additional word-of-mouth awareness via Facebook?

The Recruit:  Nothing is what it seems.  (?)

[Venger]

From this source it appears no house has ever sold on the road for above £3.8 million.

And most homes selling for much lower prices in previous years, as HPI++++ continued and continued.

http://www.rightmove.co.uk/house-prices/OX2/Northmoor-Road.html

Sale Date: 02 Jul 2014
Price Paid: £3,800,000

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=51397339&sale=63867789&country=england