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I am calling the top - its turned


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Either August or September will be the top of the property bubble. August was bonkers round here...a perfect place to escape London, but not too far away. Most houses were selling in days, then around the first week in September it changed. A few houses still selling, but most hanging round for weeks now, and today I am seeing a sudden flurry of reductions...not something I have seen since July.

I think it is finally dawning on people that things are going to be really really bad, and those who want to or need to sell, are waking up to the fact things have changed and are cutting prices. I live in Sussex, be interesting to know if others are seeing the same. I predict that October will see a small decline, then November onwards will see some tasty numbers.

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Either August or September will be the top of the property bubble. August was bonkers round here...a perfect place to escape London, but not too far away. Most houses were selling in days, then around the first week in September it changed. A few houses still selling, but most hanging round for weeks now, and today I am seeing a sudden flurry of reductions...not something I have seen since July.

I think it is finally dawning on people that things are going to be really really bad, and those who want to or need to sell, are waking up to the fact things have changed and are cutting prices. I live in Sussex, be interesting to know if others are seeing the same. I predict that October will see a small decline, then November onwards will see some tasty numbers.

Ukpropertylion saw 4 or 5 areas turn -ve last month and most of the rest had stalled, would be a brave man that bets against house prices starting to fall  now. 

 

Always worth noting the london current asking prices were down 6% already this year and looking on rightmove that trend is speeding up. 

 

Ill post October's property lion index around 8th oct

 

P. S. In the last week 2 journalists have followed uk pl. 

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I'd love to think the prices are dropping, but house prices don't do what we want or expect them to do. I know everything is going to shit, but you just cannot underestimate the stupidity of the public. People got back into the market in July knowing that they were on borrowed time and could lose their jobs, now furlough is running out but we have some 2nd attempt to keep things a float. People were stupid enough to bid houses up 20k to save 5k in stamp duty, go figure! What about the stock market, it's going extremely strong at the minute but is expected to soon crash as all companies are trading under very difficult conditions (except Amazon and a few others). When investors in stock get spooked they could well en masse shift to hard assets such as property, think about the effect of all that money suddenly propping up the property market. 

I remember watching the market in 2005 and saying this is the top, this madness can't continue. What happened, where I'm from (Belfast, Northern Ireland) the market rose 50% in the next 2 years! Remember the public are numb nuts!

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I remember watching the market in 2005 and saying this is the top, this madness can't continue. What happened, where I'm from (Belfast, Northern Ireland) the market rose 50% in the next 2 years! Remember the public are numb nuts!

The last 3 months certainly shows that 

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I'd love to think the prices are dropping, but house prices don't do what we want or expect them to do. I know everything is going to shit, but you just cannot underestimate the stupidity of the public. People got back into the market in July knowing that they were on borrowed time and could lose their jobs, now furlough is running out but we have some 2nd attempt to keep things a float. People were stupid enough to bid houses up 20k to save 5k in stamp duty, go figure! What about the stock market, it's going extremely strong at the minute but is expected to soon crash as all companies are trading under very difficult conditions (except Amazon and a few others). When investors in stock get spooked they could well en masse shift to hard assets such as property, think about the effect of all that money suddenly propping up the property market. 

I remember watching the market in 2005 and saying this is the top, this madness can't continue. What happened, where I'm from (Belfast, Northern Ireland) the market rose 50% in the next 2 years! Remember the public are numb nuts!

All this is desperate behaviour. People are scrambling for the lifeboats. Nothing good will come from this. This is not calm and stable. This is now a basket case.  

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What about the stock market, it's going extremely strong at the minute but is expected to soon crash as all companies are trading under very difficult conditions (except Amazon and a few others). When investors in stock get spooked they could well en masse shift to hard assets such as property, think about the effect of all that money suddenly propping up the property.

I doubt that many UK investors have large portfolios of US or German stocks that are indeed going very strong. UK stock market was very weak for a while, most people are sitting on large paper losses and will unlikely realize these losses to shift their money to property.

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I'd love to think the prices are dropping, but house prices don't do what we want or expect them to do. I know everything is going to shit, but you just cannot underestimate the stupidity of the public. People got back into the market in July knowing that they were on borrowed time and could lose their jobs, now furlough is running out but we have some 2nd attempt to keep things a float. People were stupid enough to bid houses up 20k to save 5k in stamp duty, go figure! What about the stock market, it's going extremely strong at the minute but is expected to soon crash as all companies are trading under very difficult conditions (except Amazon and a few others). When investors in stock get spooked they could well en masse shift to hard assets such as property, think about the effect of all that money suddenly propping up the property market. 

I remember watching the market in 2005 and saying this is the top, this madness can't continue. What happened, where I'm from (Belfast, Northern Ireland) the market rose 50% in the next 2 years! Remember the public are numb nuts!

Then it crashed by 50% over the next 5 years....

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We’ve totally given up predicting the housing market. It’s powers of resilience know no bounds. 

We have the added problem of living in Cornwall. Prices have exploded down here since lockdown as people realise that they don’t have to live in overcrowded city conditions. The cat is out of the bag and even If prices drop nationwide, they may well remain buoyant down here. Most house sales seem to be going to “upcountry folk”. Our village has a branch rail line and easy access to Truro and Newquay airport....

We were accidental renters and thought, for once, that Lady Luck would smile on us in terms of property prices. No to be. We’ve bitten the bullet and bought, the only crumb of comfort being that our stamp duty liability is £15K less.

 

 

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People bidding up 20k to save £5k

well that makes sense, the £20k is not real cold hard cash it’s borrowed, and not having to have the £5k in cash deposit helps drive the bidding

It’s an instant boost to borrowing 

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People bidding up 20k to save £5k

well that makes sense, the £20k is not real cold hard cash it’s borrowed, and not having to have the £5k in cash deposit helps drive the bidding

It’s an instant boost to borrowing 

You still need to front £3k of that £20k in terms of deposit. So more accurate to say, saving £2k now but paying £20k extra over time....totally mental.

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You still need to front £3k of that £20k in terms of deposit. So more accurate to say, saving £2k now but paying £20k extra over time....totally mental.

I suppose the logic is that the extra £20k takes care of itself via inflation 

which does seem to be the case with housing 

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These extra 20k will be spread over next, say, 20 years or longer so the first 1k will be paid next year and the last 1k in 20 years from now when, with inflation and low rates expected over this period, this sum of money is gonna be worth 3-4 times less or even better. You don't really pay those today's 20k back, when the payment is spread over long time you pay back maybe half of real value of it of it. That's the beauty of cheap borrowing in long term. That's why people take mortgages out.

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The frenzy was never going to last long, too many people on furlough, tighter lending etc. The fundamentals are weak to say the least. From here onward small year on year falls, 5% here, 3% there, a slow decline in my opinion. Crash? Not going to happen. The rear question is for how long will the country be in decline? I can see Boris going cap in hand to Trump.

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Either August or September will be the top of the property bubble. August was bonkers round here...a perfect place to escape London, but not too far away. Most houses were selling in days, then around the first week in September it changed. A few houses still selling, but most hanging round for weeks now, and today I am seeing a sudden flurry of reductions...not something I have seen since July.

I think it is finally dawning on people that things are going to be really really bad, and those who want to or need to sell, are waking up to the fact things have changed and are cutting prices. I live in Sussex, be interesting to know if others are seeing the same. I predict that October will see a small decline, then November onwards will see some tasty numbers.

The general feeling is the situation is not good, I’m actually surprised people are starting to think the economy is going down like a stone.  Chatting to a taxi driver he was saying he will need to sell the car and buy a cheap banger, chatting to a farmer he was saying the farmers have blown the bouncy cheque loans on new motors and sheds they don’t need and will regret it, these guys are literally looking at what they can get for 50k and blowing the lot.  I was able to do some travel with work and the airports are empty, security staff are happy to have someone to talk to.  Honestly, it’s about to hit the fan.

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Looking to buy, but holding back as reality is starting to dawn for the dumb clucks.

Rural South Wales - eventually calming down.  Still frothy, with some “Johnny come latelys” trying to join the bean feast.  2nd wave might prolong the Little Death.

South East commuter belt - starting to realise Post Covid can’t justify Space Cadet prices, and being pole position isn’t what it was.  Sellers discounting.  

I agree, peak was probably August, now over wintering is the fear, with the danger of missing out on Stamp “giveaway.

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1 hour ago, squeezed said:

These extra 20k will be spread over next, say, 20 years or longer so the first 1k will be paid next year and the last 1k in 20 years from now when, with inflation and low rates expected over this period, this sum of money is gonna be worth 3-4 times less or even better. You don't really pay those today's 20k back, when the payment is spread over long time you pay back maybe half of real value of it of it. That's the beauty of cheap borrowing in long term. That's why people take mortgages out.

There is a 1-2-3 principal from memory? 

Pay (borrow) £1k more.. 

Repay (over 25 years) £2k 

Have to have earned £3k to pay that after tax? 

So £20k extra = £60k needing to be earned??

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Probably has been a similarly titled post every year, right?

The problem is there is no real defined definition of a 'crash'.  

If you are waiting for a large downturn of a vested interest, manually adjusted statistic, I do think you'll be disappointed. 

More pertinent will be your areas of interest.

The top has passed a while back in London - probably somewhere between 2016-2017. I reckon the price for an average property is down 10% - some less, some more. Is that a crash? Even if prices went 20-30% off their peak I still think some things would look expensive relative to wages. 

Where I look, I don't believe there will be a crash, but rather a slow devaluation of houses relative to other assets over time.... the top 10-20% the quick froth. Nominal price growth averages 0% (some above, some below), but over a decade that translates to a real fall of 40-60%. 

Joe Bloggs meanwhile will be happy. Their £500k flat can be sold for £525k in 5 years and 'they haven't lost money, therefore you HPC idiots were wrong'.

I really believe that sufficient props (and dampeners) will emerge over the next decade to keep prices in a tight corridor. Politically it is easy to make the case for both. Props are spun as helping people own homes, dampeners are spun as also helping people own homes.

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Probably has been a similarly titled post every year, right?

The problem is there is no real defined definition of a 'crash'.  

If you are waiting for a large downturn of a vested interest, manually adjusted statistic, I do think you'll be disappointed. 

More pertinent will be your areas of interest.

The top has passed a while back in London - probably somewhere between 2016-2017. I reckon the price for an average property is down 10% - some less, some more. Is that a crash? Even if prices went 20-30% off their peak I still think some things would look expensive relative to wages. 

Where I look, I don't believe there will be a crash, but rather a slow devaluation of houses relative to other assets over time.... the top 10-20% the quick froth. Nominal price growth averages 0% (some above, some below), but over a decade that translates to a real fall of 40-60%. 

Joe Bloggs meanwhile will be happy. Their £500k flat can be sold for £525k in 5 years and 'they haven't lost money, therefore you HPC idiots were wrong'.

I really believe that sufficient props (and dampeners) will emerge over the next decade to keep prices in a tight corridor. Politically it is easy to make the case for both. Props are spun as helping people own homes, dampeners are spun as also helping people own homes.

That's a fair post. Joe Bloggs will wonder why HPCers will be able to finally buy one of these houses whilst also having massive other investments at the same time. The concept of real terms losses will go straight over his head.

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There is a 1-2-3 principal from memory? 

Pay (borrow) £1k more.. 

Repay (over 25 years) £2k 

Have to have earned £3k to pay that after tax? 

So £20k extra = £60k needing to be earned??

Nope. For example, at the APR at 2.4%, 10% deposit and 25 years repayment period, the amount paid back to the amount borrowed ratio is 1.33. 

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Probably has been a similarly titled post every year, right?

The problem is there is no real defined definition of a 'crash'.

For me a crash happens when the falls are big and long enough that even biggest HPI VI has to admit prices have fallen and the general narrative on the mainstream media is that prices are going down. Phrases like ‘You can only win on bricks and mortar’ and ‘Renting is dead money’ fall out of common use.

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  • 433 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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