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deano_54321

When There Is A Noticable Dip In The Housing Market....

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Hi There,

As we all sit in wait for the crash, I have a question to throw out. If the market begins to dip, so much that even the press cant deny it, will this CAUSE the crash as buyers back off in wait to see what is going to happen. I know there are much deeper discussions than this simple question, but is this the bare truth of what will happen to cause the crash?

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It's done all that already, & is crashing - but ever so slowwwllyyy... but there are still way too many sheeple out there still willing to pay too much for property unfortunately.

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definitely. who wants to jump onto a sinking boat?

Negative reports about HP's would / will be like a snowball rolling downhill.

Only not so much fun for most :blink:

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Hi There,

As we all sit in wait for the crash, I have a question to throw out. If the market begins to dip, so much that even the press cant deny it, will this CAUSE the crash as buyers back off in wait to see what is going to happen. I know there are much deeper discussions than this simple question, but is this the bare truth of what will happen to cause the crash?

Well speaking as a FTB, thats what I'm doing now.

I'm watching house prices slowly slide. There is no point it buying now, unless I can get a pre-bubble price.

I predict by the 3rd quarter this year, the media will be reporting house price drops, that when things really will snowball.

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1. Lack of confidence in the housing market.

2. Lack of demand from BTL because it is a poor investment.

3. Lack of demand from FTB because they can buy cheaper next month.

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Hi There,

As we all sit in wait for the crash, I have a question to throw out. If the market begins to dip, so much that even the press cant deny it, will this CAUSE the crash as buyers back off in wait to see what is going to happen. I know there are much deeper discussions than this simple question, but is this the bare truth of what will happen to cause the crash?

Property is a unique market, and I don't think its as simple as seeing a snowball. What really matters is not what is happenning, but what people THINK WILL HAPPEN. If the majority of FTBers think houses will be cheaper in six months then they will be.

Seeing the reductions I've noticed around me the last few weeks, the "live at home and savings buckets" brigade will hold off. This will hit chains. Two of the houses I was looking at have drastically reduced (one from £155K to £142), as they are with housebuilders who have trade-in houses they need to ditch. Others in the "Haemorrhaging rent" brigade may not have the same view, and the reductions will entice them to the market. Expect to see a lot of "SOLD STC" properties that either stay around because the chain can't complete or are left on by agents trying to dupe the rest of us that the market is active.

There will always be some people ready to buy for non-financial reasons, so you're unlikely to see prices drop overnight. Property is not merely a functional 'good', people like to have their own space to decorate. There is an emotional involvement.

It will be a slow fall. The decline in prices combined with a buoyant stockmarket means fewer people will invest in property in the short term. There will be some though that love property and will invest on the basis that they think the property will still be a good long term investment. BTL investors can't get out of the market that quicky, easily or cheaply. Its not like selling shares, one call to your stockbroker and you have working capital. With debt remaining cheap and rents paying the BTL mortgage there is no need for the BTL investor to sell up to maximise returns, he/she can just sit it out the slump. Its when debt becomes more expensive that it will get really interesting, but nobody THINKS that will happen.

That is probably the bare truth, as opposed to the bear truth!

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1. Lack of confidence in the housing market.

2. Lack of demand from BTL because it is a poor investment.

3. Lack of demand from FTB because they can buy cheaper next month.

But the VIs will do everything in their power to deny that a crash is taking place. We need to look behind the spin from the Halifax, Nationwide et al, and try and pressurise the media into reporting the significant falls now taking place in the midlands and north. Journalists are lazy and won't delve beyond the bland press releases unless we keep at them.

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With debt remaining cheap and rents paying the BTL mortgage there is no need for the BTL investor to sell up to maximise returns, he/she can just sit it out the slump. Its when debt becomes more expensive that it will get really interesting, but nobody THINKS that will happen.

That is probably the bare truth, as opposed to the bear truth!

Unfortunately GDP growth has slumped, the UK now has one of the weakest economies in Europe.

I'm starting to see the effect, I am planning on moving soon, and the I have been told by the rental agent to make cheeky offers!

This is in a prime London area.

Unemployment is the UK is now rising sharply, as it always does at the end of a massive boom.

Next government borrowing goes through the roof as the economy falls, and after that all bets on interest rates /currency rates are off.

We live in interesting times...

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Next government borrowing goes through the roof ....

what! its through the roof already! I heard Gordon Brown has even been on the phone to Ocean Finance!

We live in interesting times...

certainly is. When the banks stop offering 100% mortgages then it will get really interesting.

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But the VIs will do everything in their power to deny that a crash is taking place. We need to look behind the spin from the Halifax, Nationwide et al, and try and pressurise the media into reporting the significant falls now taking place in the midlands and north. Journalists are lazy and won't delve beyond the bland press releases unless we keep at them.

Of course the VIs deny things. Even if house price go into free fall, the VIs will spout all sorts of tosh like "prices are cheaper than at any time in the past 3 years therefore BTL yields are the highest ever in the past 3 years" when in reality any increases in yield are crushed by falling equity. Nobody in the mainstream media ever reports falling house prices although a HPC gets plenty of publicity.

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Timing the market is everything. 1st time buyers have nothing to worry about unless they buy now.

Just like in 1987/8 the house price bubble is full to bursting. As a 23 year old I can remember thinking that I would never be able to afford to buy a place of my own. Then the Chancellor (Ken Clarke?) provided the final price spurt with a stamp duty 'holiday'. With high unemployment and interest rates, house prices were unsustainable and just as night follows day, house prices crashed. (The local press still talked it up every week for the next eight years.)

So for a fall we need a trigger. Could this be the trigger? The homebuyers information pack.

1) Any vendor considering selling over the next couple of years may want to sell before it's introduced in 2007, this could cause over supply.

2)The packs are only good for three months so, after it's introduced, it will be costly to not achieve a quick sale.

If it's not a trigger,as it stands, the homebuyers information pack is going to be a nightmare for vendors.

UP THE BEES

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Is this period of validity of three months correct for the HIPS stuff correct?

If it is sellers on our estate will s**t themselves. It means you cannot sit on an unrealistically priced property indefinately.

If you need to move you will have to be a realist or risk further costs as the property languishes on the market.

Please correct me if I'm wrong.

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I don't think HIPS would be worth the paper its written on for much more than three months. As a buyer I would want to see an up to date report. Circumstances change, thats why morgage offers are only valid for 3 months.

COME ON YOU REDS

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Personally,

I think the main thing that would burst this bubble is ...

A CHANGE in the availability of credit- the ultra-loose lending of the present,

is not conducive to a price slide. So many people out there remain convinced that they

cannot lose buying property, the buying continues.

I was thinking exactly the same thing this morning (whilst watching an endless stream of 'debt consolidation' adverts on the telly). There are always those foolish enough to take on too much debt when it is offered to them so freely.

Personally, I think there is a very delicate balance between the credit bubble and house price bubble at the moment - a shock to either could have major consequences. With HIPS on the horizon and, potentially, some interesting Land Registry figures coming out shortly, it's going to be fascinating watching over the next few months.

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With high unemployment and interest rates, house prices were unsustainable and just as night follows day, house prices crashed. (The local press still talked it up every week for the next eight years.)

I think this is important. People seem to moan about the VI Press but if we use last time as an example, they're only doing what they've always done. Do not expect the mainstream media to say 'it's bad and it'll get worse', even at the height of the pain they'll be running articles like 'Massive falls, but 'experts' predict an upturn next month'.

They're still a bunch of self-serving b@st@rds tho!

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  • 302 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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