House price crash

[Si1]

8 minutes ago, petetong said:

Evidence the last decade or so: https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp 

You said long term??

8 minutes ago, petetong said:

Ever increasing population for one and the various props by the governments another.

They've never stopped it before

8 minutes ago, petetong said:

I'd love them to crash by a massive amount but just can't see it. Explain to me why it will ?

I'm asking you to justify why you think it will go up forever, and you're implying of it doesn't crash it must go ballistic or something. Not sure what your point is.

[zugzwang]

10 minutes ago, petetong said:

Evidence the last decade or so: https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp

Ever increasing population for one and the various props by the governments another.

I'd love them to crash by a massive amount but just can't see it. Explain to me why it will ?

The national debt, already at a post-war high, is doubling every decade.

Your move.

[Pmax2020]

Won’t the boomers money ultimately line the pockets of the millennials in years to come, further pushing prices up?!?!

My parents are almost 70 and despite modest careers in jobs that weren’t particularly well paid, they are, how can I put this, erm, utterly loaded.

Not all that wealth disappears. I think that’s part of the problem with houses prices. A generation of 30-40 somethings are inheriting the fortunes ‘made’ on HPI on their parents watches. 

[Pop321]

35 minutes ago, Speed1987 said:

They may feel that way, but often people who overpay, will not sell for several years.

The more who overpay within one area, which is particularly desirable, the better for those who already own there.

As those who over pay are reluctant to sell, it reduces the supply, therefore new sellers can command a higher price.

💰 💰 💰

In effect,  the overpayers pull up the price of the current stock.

It can work if they buy a house that is suitable for many years….but even then I know plenty of people who are bewildered how they paid 20% more than their neighbours. Even though the neighbours bought 6 months after them. 

Bewildered and having to work another 10 years….that may work if they are careful and keep their head buried in the sand and avoid comparisons and looking at other people’s circumstances. Which by the way is absolutely fine to do (no judgement from me)…..but I can’t help repeating the point.

Last house I bought was in 2013 for £210k and the neighbour bought at the same house at the same time for £410k. They spent £80k renovating a perfectly good house and we spent £10k. Today they are both worth £425k.

And against the above example i was looking at a flat for a friend yesterday. It is £250k and was bought as a new conversion in 2001 for £245k. That’s in a market where some properties bought at £245k in 2001 are now worth £5/600k.

Buying a house isn’t an investment decision but buying badly in a buoyant market can wipe out pension plans, kids education plans and financially shape someone’s whole life….just through a lazy easy purchase. 

[Pop321]

6 minutes ago, Pmax2020 said:

Won’t the boomers money ultimately line the pockets of the millennials in years to come, further pushing prices up?!?!

My parents are almost 70 and despite modest careers in jobs that weren’t particularly well paid, they are, how can I put this, erm, utterly loaded.

Not all that wealth disappears. I think that’s part of the problem with houses prices. A generation of 30-40 somethings are inheriting the fortunes ‘made’ on HPI on their parents watches. 

I have pondered this for sometime. I think the haves and have nots will continue to widen because if 20% of boomers are millionaires then 20% of millennials may well do fairly well.

It would be an interesting study that really drills down at the impact. For example if all houses were owner occupied and debt free by boomers then they should all pass on. Ie the public pen the houses and pass them down to families of the future. Mortgages would be a thing of the past….but of course that doesn’t quite play out and it’s a picture that with some thought will shape things for some people in the future. 

[70PC]

Affordability goes to infinity at zero interest rates. Mortgage offers are not zero yet but surprisingly close. Buying a house in Winchester for £600k makes complete sense at zero interest, even if you only earn £1 an hour. 

[Kosmin]

1 minute ago, 70PC said:

Affordability goes to infinity at zero interest rates. Mortgage offers are not zero yet but surprisingly close. Buying a house in Winchester for £600k makes complete sense at zero interest, even if you only earn £1 an hour. 

If you are going to buy, zero interest rates mean it makes sense to take out a big mortgage. But this is separate to the question of whether it makes sense to buy.

[petetong]

35 minutes ago, Si1 said:

You said long term??

They've never stopped it before

I'm asking you to justify why you think it will go up forever, and you're implying of it doesn't crash it must go ballistic or something. Not sure what your point is.

I'm not saying it will go up forever, well that wasn't the intention although who knows maybe they'll introduce multigenerational mortgages, just that I can't see it dropping significantly. At best from my point of view it will just stay where it is now, particularly for houses in demand areas although by me they are still increasing in price.

Edited August 15, 2021 by petetong

[70PC]

4 minutes ago, Kosmin said:

If you are going to buy, zero interest rates mean it makes sense to take out a big mortgage. But this is separate to the question of whether it makes sense to buy.

That is definitely the question. With a 25 year mortgage fixed at 2%, the sky's the limit. Even if house prices fall, this is a cheap way of putting a roof over your head. 

[Kosmin]

4 minutes ago, 70PC said:

That is definitely the question.

You have to consider other factors. Rent. Alternative uses of your money if you don't own. Other costs of ownership. That's why zero interest rates alone do not necessarily mean buying is a good idea.

6 minutes ago, 70PC said:

That is definitely the question. With a 25 year mortgage fixed at 2%, the sky's the limit. Even if house prices fall, this is a cheap way of putting a roof over your head. 

Can you get a 25 year fix? I thought the longest fix available was 10 years.

[Si1]

1 hour ago, Pop321 said:

I have pondered this for sometime. I think the haves and have nots will continue to widen because if 20% of boomers are millionaires then 20% of millennials may well do fairly well.

It would be an interesting study that really drills down at the impact. For example if all houses were owner occupied and debt free by boomers then they should all pass on. Ie the public pen the houses and pass them down to families of the future. Mortgages would be a thing of the past….but of course that doesn’t quite play out and it’s a picture that with some thought will shape things for some people in the future. 

That might last a generation or so, but my guess says most people are very poor personal wealth managers for themselves.

[Si1]

2 hours ago, petetong said:

I'm not saying it will go up forever, well that wasn't the intention although who knows maybe they'll introduce multigenerational mortgages, just that I can't see it dropping significantly. At best from my point of view it will just stay where it is now, particularly for houses in demand areas although by me they are still increasing in price.

Yeah dude. It's hard to understand and it's hard to tolerate and it's hard to accept.

If Fred Harrison is right then we're in about year 10 here:

 

Edited August 15, 2021 by Si1

[Speed1987]

It will be interesting over the next few months, we know hospital admissions are creeping upwards.

Now, throughout last summer we still had some restrictions in place. This helped keep case numbers low, if coronavirus is seasonal... we are currently celebrating a win, which doesn't exist.

The government will say the vaccine has been a success but a new variant has rendered it ineffective, so a booster is needed. Which they already mentioned. Until the majority are vaccinated again we will have to lock down? Furlough extension, more free money etc... negative interest rates.

Sage have put out the idea, that a possible variant could emerge, with a 25% mortality rate.

Right now, nobody can predict the future or house prices, but I'm sure of one thing. The conservatives will use an further crisises to continue pumping the market. 

 

[LetsBuild]

1 hour ago, Si1 said:

Yeah dude. It's hard to understand and it's hard to tolerate and it's hard to accept.

If Fred Harrison is right then we're in about year 10 here:

 

Wait last recession was 2007/2008 - we are in year 13/14 surely?

[Si1]

5 minutes ago, LetsBuild said:

Wait last recession was 2007/2008 - we are in year 13/14 surely?

The peak of the chart for the previous cycle will have been 2007 hitting a bottom (year 18) in about 2011 and the recovery phase from year zero started from about then. So 2021 is 10 years in from that bottom.

On that cycle, the top of the bull market will be in (2007+18) 2025. We had the mid cycle dip in 2019 which was actually a little late in the cycle.

Edited August 15, 2021 by Si1

[Pmax2020]

2 hours ago, Speed1987 said:

It will be interesting over the next few months, we know hospital admissions are creeping upwards.

Now, throughout last summer we still had some restrictions in place. This helped keep case numbers low, if coronavirus is seasonal... we are currently celebrating a win, which doesn't exist.

The government will say the vaccine has been a success but a new variant has rendered it ineffective, so a booster is needed. Which they already mentioned. Until the majority are vaccinated again we will have to lock down? Furlough extension, more free money etc... negative interest rates.

Sage have put out the idea, that a possible variant could emerge, with a 25% mortality rate.

Right now, nobody can predict the future or house prices, but I'm sure of one thing. The conservatives will use an further crisises to continue pumping the market. 

 

I only really scrutinise the Scottish dashboard, but to be fair the stats couldn’t really look any more positive in terms of moving forward. Only 40 people in the whole of Scotland in ICU with covid. Naturally, you’d ask what is the broader state of their health.

Deaths of those younger than 60 in Scotland attributed to covid… (since the start of the pandemic so irrespective of vaccination)… it’s barely 1 or 2 deaths per week. That’s under 60s and let me tell you many of my fellow countryman do not look after themselves very well! We all know these numbers have been massaged - if in doubt, blame covid. 

So I really don’t see any evidence of the Indian variant causing concern and the probability of another lockdown is nil. 

My armchair analysis of covid was that it ripped through care homes and the elderly, representing a horrendous flu season. We overreacted which I can understand, but now governments are realising this wasn’t as deadly as they feared. If you look after yourself and take some basic precautions you’ve nothing to worry about. 

Edited August 15, 2021 by Pmax2020

[bearishonhouses]

5 hours ago, Pop321 said:

I have pondered this for sometime. I think the haves and have nots will continue to widen because if 20% of boomers are millionaires then 20% of millennials may well do fairly well.

It would be an interesting study that really drills down at the impact. For example if all houses were owner occupied and debt free by boomers then they should all pass on. Ie the public pen the houses and pass them down to families of the future. Mortgages would be a thing of the past….but of course that doesn’t quite play out and it’s a picture that with some thought will shape things for some people in the future. 

Agreed - but presumably estates will be split between children. If boomer couples have more than two children, on average, there will be dilution of wealth in houses that is passed on. 

[FallingAwake]

2 hours ago, bearishonhouses said:

Agreed - but presumably estates will be split between children. If boomer couples have more than two children, on average, there will be dilution of wealth in houses that is passed on. 

Also, the younger person who inherits a chunk of money might simply decide, putting £600k into a house in Winchester is simply... not worth it.

In fact, given the price of properties across the country, I'm surprised they'd think anything was worth it right now. But people need places to live, which is ultimately what sucks many in to the Property Ponzi.

Edited August 16, 2021 by FallingAwake

[Pop321]

5 hours ago, FallingAwake said:

Also, the younger person who inherits a chunk of money might simply decide, putting £600k into a house in Winchester is simply... not worth it.

In fact, given the price of properties across the country, I'm surprised they'd think anything was worth it right now. But people need places to live, which is ultimately what sucks many in to the Property Ponzi.

I think that is a proper challenge you raise.

I would suggest £600k just isn’t worth it and people (bulls and neutrals) get a bit numb to the numbers involved. Borrowed money at low rates is one thing….almost a mathematical game using a comparison against renting. However, being handed £600k inheritance (appreciate this isn’t the norm but it’s the way I want to compare to borrowing) then suddenly someone has lots and lots of life options. Those who are young, have imagination and can see beyond The Matrix I would hope would think such an inheritance not be wasted on an overpriced average 3 bed semi in middle England. 😉

[Si1]

5 minutes ago, Pop321 said:

I think that is a proper challenge you raise.

I would suggest £600k just isn’t worth it and people (bulls and neutrals) get a bit numb to the numbers involved. Borrowed money at low rates is one thing….almost a mathematical game using a comparison against renting. However, being handed £600k inheritance (appreciate this isn’t the norm but it’s the way I want to compare to borrowing) then suddenly someone has lots and lots of life options. Those who are young, have imagination and can see beyond The Matrix I would hope would think such an inheritance not be wasted on an overpriced average 3 bed semi in middle England. 😉

Also, what age are they going to inherit this?

Usually people inherit a smaller sum first from a grandparent at an age when it's actually useful.

[TheCountOfNowhere]

On 14/08/2021 at 20:33, 70PC said:

At 0% mortgage interest, house prices can go to infinity. We are not far from those rates now. People have short memories.

Certainly with I/O they can go to infinity. 

[MancTom]

22 hours ago, spyguy said:

Winchester depends on London flight, looking to exit before Quentin starts school at Mogadishu High.

Majority of people in London over last 20 years have been renting. Theres no equity.

London prices have been falling for at least 5 years.

Covid appears to have caused major ruptures to Londons economy - suddenly mass public transports is looking a negative for the forseeable future.

A household earning 60k-80k would only get a mortgage of 240k. Chuck in some car loans, student fees, other debt and that will fall under 200k.

 

 

We earn around that. But we have one 15 year old car, no fees debt or other debt. Must be many in similar position. The question is what fraction are like us and what fraction are debt junkies?

[spyguy]

3 minutes ago, MancTom said:

We earn around that. But we have one 15 year old car, no fees debt or other debt. Must be many in similar position. The question is what fraction are like us and what fraction are debt junkies?

20% like you.

80% with white range rover on PCP.

 

[Kosmin]

14 hours ago, Speed1987 said:

Right now, nobody can predict the future or house prices, but I'm sure of one thing. The conservatives will use an further crises to continue pumping the market. 

I assume the opposite. They didn't anticipate the race for space, so they implemented policies designed to stop prices falling. Having realised their mistake, they are unlikely to make it again. 

[TheCountOfNowhere]

27 minutes ago, Kosmin said:

I assume the opposite. They didn't anticipate the race for space, so they implemented policies designed to stop prices falling. Having realised their mistake, they are unlikely to make it again. 

Good one,