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deano_54321

Whats The Truth!?

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Howdy all!

I'm really getting fed up with the dump of a "housing market" we have here in the UK.

I was listening to talkSPORT earlier and the presenters on there were cheering the "fact" that house prices are on the rise again!

I really think we are fighting a losing battle. This is a great community we have here on HPC, but what chance do we REALLY have of having our voice heard? We are fighting against the press, radio stations, government, estate agents...... the list goes on! Its an almost impossible battle!

We can really only do so much sitting on here talking to eachother, but I really dont think enough people know about us to make a difference!

I hate to be blunt. Please dont have a go at me for this post - I really value all of you opinions, thats why I joined in the first place. I am as disappointed as anyone with house prices the last few years & would love to see a crash.

At the end of the day, I'm not going to buy, because its almost impossible. But when you have stats being produced on all the national news that the market is booming, how can you fight back?

Lately all of the pointers on the Homepage on HPC are heading in the wrong direction, after a good run of figures this time last year things seem to have really took a downturn for us.

Maybe I'm completely wrong!?!? Has there been a slight "pick up" before the previous crashes?

Thanks guys, Like I say please dont bite my head off, I'm just saying something I think needs saying!

Deano

Edited by deano_54321

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At the end of the day, I'm not going to buy, because its almost impossible. But when you have stats being produced on all the national news that the market is booming, how can you fight back?

Ultimately, this website is a drop in the ocean. People will get their opinions from the media unless there is something concrete in their own lives which overrides it. But, remember:

- there is a limit to which you can spin the figures.

- there is a limit to which the bullish media can stop sentiment evaporating.

- bullish spin cannot give FTBs a higher income, or force banks to relax lending criteria, or stop them tightening credit

All HPC.co.uk can really do is get you thinking hard about the facts and finding out from other posters some angles you hadn't thought of. Work hard, save hard, be patient, become knowledgeable, be alert. You can't go wrong with that strategy. Don't stop thinking!

frugalista

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I know how you feel, but there is one very important factor - first time buyers are rarer than gold. If there are no first time buyers the market will stall. Prices will have to fall to ensure sales. First time buyers might be panicked by all the headlines but the bottom line is if you don't earn enough you can't get the mortgage.

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Ultimately, this website is a drop in the ocean. People will get their opinions from the media unless there is something concrete in their own lives which overrides it. But, remember:

- there is a limit to which you can spin the figures.

- there is a limit to which the bullish media can stop sentiment evaporating.

- bullish spin cannot give FTBs a higher income, or force banks to relax lending criteria, or stop them tightening credit

All HPC.co.uk can really do is get you thinking hard about the facts and finding out from other posters some angles you hadn't thought of. Work hard, save hard, be patient, become knowledgeable, be alert. You can't go wrong with that strategy. Don't stop thinking!

frugalista

Good reply - Thanks.

I think this is what people need to hear sometimes - especially browsers who are wondering what we're all about. Its so easy for the media to "look" like they are in the right.

Cheers - This is the kind of thinking which encouraged me to join HPC in the first place. Maybe my initial expectations of HPC were different to what they are now.

Slight deviation here - has anybody been out spreading the word, eg leaflets, car stickers etc?

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I know how you feel, but there is one very important factor - first time buyers are rarer than gold. If there are no first time buyers the market will stall. Prices will have to fall to ensure sales. First time buyers might be panicked by all the headlines but the bottom line is if you don't earn enough you can't get the mortgage.

Yes but there are a lot of potential buyers still - people with property who only need to put down 15% for another property. Those not in BTL are probably bailing out their children by remortgaging and loaning them a deposit. As long as rates are low and they will be kept low for some time yet then this whole cycle will continue and continue ....

PS - I am a bear!!

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I know how you feel, but there is one very important factor - first time buyers are rarer than gold. If there are no first time buyers the market will stall. Prices will have to fall to ensure sales. First time buyers might be panicked by all the headlines but the bottom line is if you don't earn enough you can't get the mortgage.

Hi There,

I agree. However my only concern is at the moment "somebody" is keeping the market afloat. Who is it, because it certaily isnt FTB's. Therefore my only explanation is people are Monolopolising - eg buying a third or fouth house as an investment. The government should come down on this (eg increase tax on such transactions) but they know that the crash will go ahead if they do this so theyre running scared. And in the meantime FTB's are suffering.

What are other peoples views on this?

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the data in the mainstream press is actually heading in the RIGHT direction!!!

you guys need to look a little deeper.

...the stronger than expected retail sales and housing market reports are actually setting the market up for a fall!!!!

why???.....because people had been led to believe there would be a series of interest rate cuts coming,just like people were led to believe SIPPS.

there's going to be some mighty disappointed people when the rate cuts don't materialise....and some mighty desperate ones should we get hints of inflation that need a rate hike to curb them.

..and we might just get it,oil has gone back up to $70 from $55ish at christmas.

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there's going to be some mighty disappointed people when the rate cuts don't materialise

Good point - the press are already hinting that there WONT be a cut. At least sometimes we hear SOME truth from the media! :lol:

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Yes but there are a lot of potential buyers still - people with property who only need to put down 15% for another property. Those not in BTL are probably bailing out their children by remortgaging and loaning them a deposit. As long as rates are low and they will be kept low for some time yet then this whole cycle will continue and continue ....

PS - I am a bear!!

Agreed. With low interest rates I don't see a crash on the horizon. Prices will stagnate for a bit longer IMO.

In this neck of the woods you can buy a 3 bed terrace for £140k. i.e. £800pm repayment mortgage.

Only a bit more than the cost of renting. I'm afraid that this is enough to keep people buying.

Even starting a BTL as a long term investment still adds up here (just!)

If interest rates start going up next year then things might get more interesting...

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I know its just an anecdote but I work in a City finance company... was chatting with one of the directors the other night, who has seen it all before. He voiced the opinion, without any prompting, that the UK housing market is going to go completely tits up within the next 12 months. Which made me smirk....

Nice to hear someone saying something sensible for a change

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I know its just an anecdote but I work in a City finance company... was chatting with one of the directors the other night, who has seen it all before. He voiced the opinion, without any prompting, that the UK housing market is going to go completely tits up within the next 12 months. Which made me smirk....

Nice to hear someone saying something sensible for a change

That sounds pretty cool. Maybe thats where this kind of truth starts to come out - and in plain english which everybody understands too! :lol:

Nice one.

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That sounds pretty cool. Maybe thats where this kind of truth starts to come out - and in plain english which everybody understands too! :lol:

Nice one.

Plain English?

Can somone define 'tits up' in terms of price falls for me then?

0%, -5%, -10% or -20%?

I seem to remember people saying 'going tits up within 12 months' back in 2002...

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Deano if you have a few hours spare read 'WHAT THE PAPERS SAID' before, during and after the last crash.

http://www.housepricecrash.co.uk/frequentl...d-questions.php

Then read what Nationwide said AFTER they have gone up 1.4%

***STRICTLY EMBARGOED UNTIL 7.00AM Tuesday 31st January 2006***

Housing Market gets off to a strong start in 2006

• House prices increased by 1.4% in January, bringing the annual growth rate to 4.4%

• Three quarters of the annual increase in prices came in the last 4 months

• However, the fundamentals of the market remain fairly fragile and will prevent strong price

rises in 2006

Headlines January 2006 December 2005

Monthly index * Q1 '93 = 100 321.5 317.0

Monthly change* 1.4% 0.5%

Annual change 4.4% 3.0%

Average price £158,478 £157,250

* seasonally adjusted

Commenting on the figures Fionnuala Earley, Nationwide's Group Economist, said:

“The housing market got off to a strong start in 2006 with prices increasing by 1.4% in January. This

is the strongest monthly rate of growth since July 2004 when it was 1.9% and the annual rate of house

price inflation was more than 20%. The annual rate of house price inflation in January 2006 is a more

modest 4.4%. Even so, this is a significant increase in price and confirms the strengthening trend we

have seen since October. The average house price in the UK is now £158,478, compared to £151,757

at this time last year.**1

The housing market has strengthened in recent months…

“Following neutral price movements between April and September when the house price index was

largely static, recent months have seen much stronger increases. In fact three quarters of the 4.4%

increase in house prices over the last year happened in the last four months.

We think that at least part of the pick up in the market since October reflects a release of some pent-up demand following the cut in interest rates in August and the increased confidence on the part of buyers

and sellers as they became more comfortable that the market was heading for a soft landing. The continued pickup in mortgage approvals suggests that the market will strengthen further over the next few months.

“115,000 mortgages were approved for house purchase in November and this number has risen throughout 2005 from a low of just 75,000 this time last year. Such a high level of market activity was, in 2002, associated with house price inflation well into double-digits. Due to the inherent lags in the response of the

housing market, a rise in mortgage approvals tends to be reflected in higher house price inflation

around 7 months later. If the relationship continues to hold over time, looking at the current situation

as shown in the chart above, the gap between the two lines suggests that house price inflation should

accelerate in the first half of 2006.

...but is unlikely to take off.

“The key question for the market is whether the strong pickup over the last 4 months will persist. In

our view, this is unlikely for a number of reasons. First, while the UK economy seems to have made a

turn and be on a path of recovery, 2006 is still likely to see below-trend growth. Further rises in

unemployment are possible and most of the risks seem to be on the downside.

“Secondly, affordability remains stretched and it is unlikely that the market could absorb another

strong rally of house price inflation. In addition, there are already indications that consumers’ appetite

for further unsecured debt may be diminishing and that the amount of extra borrowing against

property has slowed. Growing uncertainty over pensions has made saving more important. While this

could generate renewed demand for housing as a form of pension saving in the longer term, consumers

may focus on more traditional forms of savings and debt repayment in the shorter term, especially as

the stock market recovers.

Implications for Interest Rates

“The most recent set of economic data suggest that the economy may be turning the corner as

consumers made a well-publicised return to the high street pushing retail sales up in the Christmas

period. Whether this means that the MPC will hold rates at 4.5% for the foreseeable future depends on

how lasting consumers’ appetite for spending will be in the post-Christmas period. Growth of

borrowing has slowed according to the latest Bank of England data and consumer confidence indices

continue to be subdued. Recent labour market data is also on the weak side which suggest that a cut

could still be on the cards.

“However, the pickup in house price inflation and the possibility of further rises in the short term

could strengthen consumer confidence and encourage further spending. This would undoubtedly be

good news for the UK economy and would facilitate its path back towards trend. But if house prices

rise too far, alarm bells will ring among those MPC members concerned about asset price inflation and

will make rate cuts less likely in 2006.”

Fionnuala Earley Steve Cowdry

Indices and average prices are produced using Nationwide's updated mix adjusted House Price

Methodology which was introduced with effect from the first quarter of 1995. Price indices are

seasonally adjusted using the US Bureau of the Census X11 method. Currently the calculations are

based on a monthly data starting from January 1991. Figures are recalculated at six month intervals, in

June and December.

The Nationwide Monthly House Price Index is prepared from information which we believe is collated

with care, but no representation is made as to its accuracy or completeness. We reserve the right to

vary our methodology and to edit or discontinue the whole or any part of the Index at any time, for

regulatory or other reasons. Persons seeking to place reliance on the Index for their own or third party

commercial purposes do so entirely at their own risk. All changes are nominal and do not allow for

inflation.

**1

Then compare it to there OWN data

House Price (See Note A) 'Real' House Price (See Note B)Trend in 'Real' House Prices (See Note C)

2005 Q1 £154,107 £156,463 £110,544

2005 Q2 £158,853 £159,433 £111,199

2005 Q3 £158,987 £158,987 £111,857

2005 Q4 £158,745 £157,657 £112,519

Notes

A Nominal House Price is from UK All Properties series - not seasonally adjusted

B House Prices adjusted for retail prices. This uses the Office for National Statistics Retail Price Index (RPI) to convert nominal prices to current prices

For example, a typical property in 2002 Q1 would, on average, have cost £95,356 at the time. The buy this amount of 'retail goods' today would require nearly £103,000

C A smooth trend has been fitted to the real house price series. This trend has been fitted from 1975 Q1 to the latest quarter.

House prices in January 2005 were £156,463 the new price for 2006 is £158,478. Thats actually an increase of £2,015 or 1.28% YoY - Less than Inflation!!!

They are even getting their own figures wrong.

Whats more revealing is they are JUSTIFYING their 1.4% increase. They dont believe it themselves! They are on their back foot. They then go on to say the opposite of what they have been saying all along.

It wont crash because Interest Rates are historically low. Unemployment is historically low. The Economy is strong.

They are saying the opposite to that now - IE The truth!!! The economy is phucked and we CANNOT sustain House Prices as they are... in other words THEY HAVE GIVE IN!!!!

THE CRASH IS HAPPENING NOW!!!! THEY WILL BE REPORTING 1% DROPS WITHIN 3 MONTHS i.m.h.o.

If the Interest Rate goes up??? Well sit back and enjoy!!!

Its all working out nicely - You CANT change HISTORY!!! What goes UP - MUST come down!!

:lol:

Edited by teddyboy

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It's over guys IMO.

The VI's will never conceed and we will only ever get Bullish news.

FTB's are being pressured into the market by the constant "prices rising again" news. They will borrow 6 times salary if it is lent to them.

One year ago many people here were speculating 50% drops in prices. Now even the most optimistic reckons a 20% drop is the most we could hope for. What next 10%??

STR's, sorry guys you gambled and got it wrong better luck next time.

BTL er's Shafted but still standing.

Realistically where can we go next?

I have agreed with a lot of HPC but unfortunately the odds are against us. We have about as much chance of angels flying out of our backsides as we do seeing IR's rise. The BoE is only a puppet of the chancelor.

Edited by Spring Bounce?????

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VI spin is ultimately self defeating - by constantly painting a picture of an economy in robust health & a rising housing market, the interest rate cuts they crave will never be realised because there is no apparent need for them.

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I STRed into gold and can afford a much more expensive property from the proceeds if I wanted one.

I still reckon houses are twice overvalued in real terms, and might well be twice undervalued at the bottom. I know I keep posting it, but Bandwagon's graph says it all to me:

DURCH

IM WITH YOU MATE!!!

If there was ever 1 piece of information that tells me the inevitable, this is it.

NO MATTER HOW HARD THEY TRY. We are looking at a HPC and a recession VERY SOON!!

If ANYONE can explain WHY time wont follow this pattern then please - FIRE AWAY!

TB

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VI spin is ultimately self defeating - by constantly painting a picture of an economy in robust health & a rising housing market, the interest rate cuts they crave will never be realised because there is no apparent need for them.

Similar things with interest rates.

Rates have stayed low because the inputs into the many index used to determine inflation have not told an accurate story.

We all know from our own lives that it has cost a lot more to do most things in the last few years, barring some food and electrical goods, but including Council Tax, Gas, Electric, Fuel, Travel etc. and that the constant reports of inflation at only aprox. 2% per annum are a big load of Bull (Literally!).

Our wages are not growing massively to cover the difference and many people have had to borrow to cover their lifestyles.

After all how the UK total net worth be growing by 6.9% (in 2004) but GDP growth be down to only 2%...

except if we're paying more for everything we already have and things we do - but are not creatng any more new business/output.

End of Economics 101 folks...

- pye (property specualtion ninja :ph34r: )

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I've found a few interesting passages from an old book 'Downwave' by Robert Beckman:

As residential property continues its long slide, there will be many minor ripples. Prices will certainly not fall in a straight line until we approach the end of the property crash. After a speculative bubble bursts, there are many upward moves to trap the unwary.

Initially, many will see declining property values as a fleeting opportunity to buy at a slightly lower price. Estate agents will seize the opportunity, selling 'last chance' concepts...'get in quick before property prices start soaring again'. Investors in commodities and the stock market often quote the adage, 'A rising market climbs a wall of worry. A falling market flows down a river of hope'. This means that after a market has had a long fall and begins to rise, investors mistrust the rise, remembering the many deceptive rises while the market was falling. After a time, the 'wall of worry' abates, and investors begin to think prices will rise forever. When the market suddenly falls, the psychology is reversed. Hope springs eternal at the early stages of a falling market, and each minor flip-up is considered to promise the next massive rise. Each dip in property prices will be classified as a healthy 'breathing spell' by most. Each rise will be heralded as beginning the next boom. (page 116)

He includes some stuff on the start of the crash in the early 1980's, which I shall summarise:

* Usual VI spring spin at start of 1981 whilst faint reports from statisticians that HP are not keeping pace with inflation

* Reports louder, no spring rush for mortgages, builders reporting static or falling demand increase from 64.3% to 86.5%

* July 1981 further evidence HP falling in real terms

* Sept 1981 HP now falling in absolute terms too. RICS & Halifax/Times report a static market at best: falling prices at worst. Former show no price increases in 75% of deals. Third of agents reported falls.

* Oct 1981 falls accelerating in SOME areas. Annual HPI 2%, lowest for 20 years. Buyers shopping for good value at the bottom of the market: buyers at the top of the market not much affected by recession: big reductions in the middle market. Nationwide survey shows mixed picture of falling, rising & static prices

* Nov 1981 HPI 1%. "There is more money tied up in residential property thanin any other single physical asset. Accordingly, more vested interests dominate the residential property market than any other market. The information you are likely to receive and the views which are widely expressed will almost invariably favour those vested interests, not necessarily yours. The biggest vested interest of all is, of course, government. The 60% [now 70% DG] of the British who now own their own homes are a very powerful political force. Any government ruling over a period when property prices collapse will not stand much chance at any subsequent general election." (pages 113-4)

On the Halifax survey:

"The degree to which this reflects the prices of homes in general is suspect. In the past, there were severe pressures on homes selling at £50,000 and above, while cheaper homes were rising strongly. It is therefore unlikely that the average person is going to have an idea of how the price of his house is performing from the indices that are available. At the earlier stages of the decline, most people will blithely assume this decline does not affect their particular home, and will not be duly alarmed." (pages 115-6)

He goes on to add speculators chasing capital gain will end up renting out instead, increasing the supply of rental property and putting downward pressure on rents, further increasing the margin in favour of renting over buying, and putting yet more downward pressure on the housing market. (page 116)

Although an old book, there is much of interest here and much that is reassuring too. It always helps to know similar things have happened in the past, and what to watch out for in the future.

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A crash is something that happens straight away or very quickly if you like,this house price crash will happen but it will be so slow so as not to seem like a crash if you get my meaning.If you were to monitor sights like this regularly or have been doing so for the past few years you may think a crash is not going to happen,clearly the housing boom has seen its heyday that is crystal clear no one could argue with that,so is it going to just level off then carry on upwards again like in 2002 2003,how can it when people can barely afford these current prices,sitting and waiting for a crash can do no harm at all because prices have gone up as high as they can,at the very worst case they can only stay as they are, more likely though they will come down.I was thinking of buying a house last May,did the maths could not afford it ,the houses I was looking to buy are still there for the same price some have reduced,I have not lost out and I`m still not buying ,I will wait as long as it takes .

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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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