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devslim

Anecdotal - Down The Pub With A Mortgage Advisor

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A close friend of mine sells mortgages for a living. Four months ago, when I was mulling over buying a property I mentioned my concerns to him about market stagnation and whether or not it was a good time to buy. He was incredibly bullish about the market and said that I shouldn't waste any time in buying somewhere. According to him mortgage applications were flying in and there was only one way that prices were going to go, and that was up.

When we discussed the market tonight however it was a completely different story. He talked about how it was now a buyers market and that people who were looking to buy were putting in offers of 10-15% below asking price and having them accepted. The only houses selling for asking price are those that are in A1 condition.

Interestingly, he also related a story to me of a couple who had bought a 2 bed flat on the docks in central Bristol 2 years ago. They payed 220K for it off plan. They are now splitting up and have put the flat back on the market. The new valuation - 180K. A 40K loss!

And all this from one of the most stupidly positive and enthusiastic blokes I know. I am now utterly convinced the price correction has begun.

:D

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Interestingly, he also related a story to me of a couple who had bought a 2 bed flat on the docks in central Bristol 2 years ago. They payed 220K for it off plan. They are now splitting up and have put the flat back on the market. The new valuation - 180K. A 40K loss!

Do we have an address for this so we can check the final sale price?

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Months ago I told the forum that if the predicted Nov, then Feb rate cuts don't materialise, things will start to stagnate again. The Aug rate cut brought forward pent up demand by showing people that rates has peaked. Each next group needs further confirmation of rate cuts to act, not just the possibility of rate cuts.

So let us know how your pals spirits improve when the next rate cut arrives. His mood to me is more of a guide to the future than forum posters telling us because of recent strong activity (encouraged by the last cut), rates would rise. If things are already stagnating now, there's no chance for the moment.

Edited by Time to raise the rents.

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Months ago I told the forum that if the predicted Nov, then Feb rate cuts don't materialise, things will start to stagnate again. The Aug rate cut brought forward pent up demand by showing people that rates has peaked. Each next group needs further confirmation of rate cuts to act, not just the possibility of rate cuts.

So let us know how your pals spirits improve when the next rate cut arrives. His mood to me is more of a guide to the future than forum posters telling us because of recent strong activity (encouraged by the last cut), rates would rise. If things are already stagnating now, there's no chance for the moment.

And I remember asking you what happends if the only method of bringing in new punters is by notching rates ever lower, do we sink all the way down to 0% and ignore the affects on sterling.

Is it a case of saving the housing market by all costs regardless of the consequences in the longterm or short? Whenever the FTSE or any other asset tanked and people got burnt I don't remember the BoE coming along to kiss it better.

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And I remember asking you what happends if the only method of bringing in new punters is by notching rates ever lower, do we sink all the way down to 0% and ignore the affects on sterling.

Is it a case of saving the housing market by all costs regardless of the consequences in the longterm or short? Whenever the FTSE or any other asset tanked and people got burnt I don't remember the BoE coming along to kiss it better.

Sterling isn't the only consideration. Probably the most important thing the BOE do is to support banking stability in the UK. A recession would undermine that stability, so they'll do all sorts to support it.

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Months ago I told the forum that if the predicted Nov, then Feb rate cuts don't materialise, things will start to stagnate again. The Aug rate cut brought forward pent up demand by showing people that rates has peaked. Each next group needs further confirmation of rate cuts to act, not just the possibility of rate cuts.

So let us know how your pals spirits improve when the next rate cut arrives. His mood to me is more of a guide to the future than forum posters telling us because of recent strong activity (encouraged by the last cut), rates would rise. If things are already stagnating now, there's no chance for the moment.

Yep,

yep, i'd agree that Rate cuts are a dead-cert, aren't they ttrtr? :D

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Months ago I told the forum that if the predicted Nov, then Feb rate cuts don't materialise, things will start to stagnate again.

translated as :

months ago, I posted every press link I could find that forecasted lower rates in Nov & Feb because I am in a desperate situation and I need the BOE to bail me out.

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Sterling isn't the only consideration. Probably the most important thing the BOE do is to support banking stability in the UK. A recession would undermine that stability, so they'll do all sorts to support it.

True, and as all recessions in history have followed at least one of the following tow things we have to pay attention.

House Price inflation, smaller recession.

House price inflation follwed by wage push inflation = much larger recession.

The government and the MPC have stated as fact that if salaries increase by over 2.5% on average there will be an IR rise.

Wage Push inflation would trigger recession and the only way to prevent that is to reduce the need for greater salaries on mass.

so that would be..

goods are cheaper.. so thats not a problem.

They could drop taxes.. Like thats going to happen.

They could decrease the amount of debt people are entering into.. That would be the promise of IR Hikes then.

Its not the debt people are in that will cripple us. Its if too many enter into too much more debt.

Truse me I know a lot of people and not many holds debt.

Cheaper housing.. would fix the economy faster and safer then anything else..

The conservaives did it and it worked.

Less impact this time as only a few hold massive debt and the IR rises would need to be a fraction of last time

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Cheaper housing.. would fix the economy faster and safer then anything else..

The conservaives did it and it worked.

You're correct. The economy was in recovery in 1996 and was on the up. Then labour took over in 1997 and took all the credit for it (the liars). Now they have pushed the economy onto its knees.

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You're correct. The economy was in recovery in 1996 and was on the up. Then labour took over in 1997 and took all the credit for it (the liars). Now they have pushed the economy onto its knees.

I think people don't realise the importance of house prices.

Perhaps a weak economy has been hidden by people moving investment to houses many times over the years, so perhaps its signs of the economic cycle.

But every recession we have seen has followed a period of house price inflation.

Has this been a cycle that has been among us for generations with none learning from those before them?

Has the hardest lesson been that of last time when inflation (wages) were kept down?

The first time that individuals watched that investment drop in value? seen negative equity and the cost of maintaining their debt become harder?

Is housing the only investment that is wide spread enough to hide its failure amongst the economic chaos it causes..?

Unless wages stay put, and housing becomes cheaper.. like all other investments.

Have house prices led the way to every economic downturn we have seen?

Have house prices caused every economic downturn?

The tragic innevitable cycle just keeps happening.. and each time it seems that to the majority it is a big surprise.

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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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