Nationwide, house prices surge 2.1% in August

[crashmonitor]

Too many people chasing too few listed properties just now and you only need a few transactions to set an entire Market. Virtually nothing to rent or buy, save for newbuilds if you are prepared to wait 6 to 9 months on an uncertain completion whilst builders battle the biggest shortage of building materials and labour post war. Printing a trillion pounds hasn't helped, locking the country up for one year hasn't either. Pouring more petrol onto the flames is immigration and millions of boomer's children now entering the Market.

Seems like you can set your watch by Harrison's 18 year cycle . 2003/ 2021 peak of the booms. Q3 2025 probably when we will begin the bust.

 

Edited September 2, 2021 by crashmonitor

[sammersmith]

30 minutes ago, TheCountOfNowhere said:

That wretched holiday did well for the tories.  Everything is booming now and sentiment is on the up.

f**king disaster for anyone without a house or a willingness to go into a lifetime of debt.

I still think this stamp duty holiday was too successful for their liking, and they actually hoped for a sustaining of demand rather than sticking a rocket under the market. All this has done is compress sales into a short window. 

Sentiment can turn very quickly. I can't see where the demand or stimulus can come from next. Ideally we'll be back to May/April 2020 where everyone held off and prices were stagnant. 

[satsuma]

4 hours ago, sammersmith said:

I still think this stamp duty holiday was too successful for their liking, and they actually hoped for a sustaining of demand rather than sticking a rocket under the market. All this has done is compress sales into a short window. 

Sentiment can turn very quickly. I can't see where the demand or stimulus can come from next. Ideally we'll be back to May/April 2020 where everyone held off and prices were stagnant. 

Pull the other one, its got bell on, they knew full well what they were up to, sneaky beggers.  Bunch of bankers mates in power had an opportunity of alife time to get dumb ******s to borrow worthless fiat that they had printed.  Banks are laughing and Im surprised the tories can keep a straight face.  

[Pmax2020]

5 hours ago, crashmonitor said:

Too many people chasing too few listed properties just now and you only need a few transactions to set an entire Market.

 

I agree. 

The handful of people I know that moved openly admitted to paying more than they felt the place was worth because if they didn’t, they feared it would be weeks before another came up. 

Such increases where supply is limited can only be magnified when dealing with property because timing is crucial and you can’t simply list and sell without feeling pressured into buying quickly. Especially if you have a family to house. 

I think one either of two things will happen…

1) Rates will go up and prices will fall.

2) Rates with will go down and prices will rise.

Either way I think housing is going to be  expensive for generations to come…

[msi]

51 minutes ago, Pmax2020 said:

I agree. 

The handful of people I know that moved openly admitted to paying more than they felt the place was worth because if they didn’t, they feared it would be weeks before another came up. 

Such increases where supply is limited can only be magnified when dealing with property because timing is crucial and you can’t simply list and sell without feeling pressured into buying quickly. Especially if you have a family to house. 

I think one either of two things will happen…

1) Rates will go up and prices will fall.

2) Rates with will go down and prices will rise.

Either way I think housing is going to be  expensive for generations to come…

Rates can't go down further without breaking the Financial system.  Smaller economies are already increasing rates so stabilise and generate demand - what happens when they appreciate and Global capital starts to follow them.

The West is toast, everything will be expensive for generations to come.

[Kosmin]

8 hours ago, Speed1987 said:

Serious question, if you were an MP with several BTLs, would you let the housing market crash?

Do MPs care more about power or money? MPs are quite well paid. For some of them being an MP is their best chance to earn a high income and build wealth. Other took massive pay cuts, or had to cut back on other sources of income. So I think it's reasonable to conclude that for the most part they would rather be in power than get rich. So I think most would probably want to let the market crash if it would improve their political prospects.

If you were a Labour MP and a crash led to a decrease in your property wealth and resulted in a Labour government, wouldn't that outweigh the decrease in property wealth for you?

If you were a Conservative and a crash increased Conservative popularity (seemingly unlikely, as apparently the electorate like high prices, but perhaps if the Conservatives relentlessly made the novel argument that lower prices are good for FTBs, upsizers, and everyone with children/grandchildren looking to buy - i.e. the vast majority of people), wouldn't that outweigh the decrease in property wealth for you?

[Speed1987]

1 hour ago, Kosmin said:

Do MPs care more about power or money? MPs are quite well paid. For some of them being an MP is their best chance to earn a high income and build wealth. Other took massive pay cuts, or had to cut back on other sources of income. So I think it's reasonable to conclude that for the most part they would rather be in power than get rich. So I think most would probably want to let the market crash if it would improve their political prospects.

If you were a Labour MP and a crash led to a decrease in your property wealth and resulted in a Labour government, wouldn't that outweigh the decrease in property wealth for you?

If you were a Conservative and a crash increased Conservative popularity (seemingly unlikely, as apparently the electorate like high prices, but perhaps if the Conservatives relentlessly made the novel argument that lower prices are good for FTBs, upsizers, and everyone with children/grandchildren looking to buy - i.e. the vast majority of people), wouldn't that outweigh the decrease in property wealth for you?

Your response frames MPs as somewhat altruistic. To some the pay they get is just "Chicken feed"...

The majority of MPs are LLs, the majority are getting paid by the house builders. That means the house builders & LLs are effectively their bosses... or donors as they like to phrase it 🤣.

Behind every MP in power, there is generally some entity or power, who thrust them into that position, through their campaign. Through social media marketing etc etc

Mps are there to vote in Parliament, to have that position of power. I'm sure very few MPs sit there at night and think, oh wouldn't it be great, if I could decrease my own wealth and everyone else's. My children can stop attending private school and be educated with the rest. So those who won't make the necessary sacrifices can buy a house.

Anybody can enter the housing market, you won't get a spot next to the Queen in London, but you can enter lower down the chain. So from that perspective, it appears the problem is not access to housing but mainly jealousy or ignorance or simply being lazy...

Also to add and I'm being brutally honest, I've worked all my life damn hard... why should someone with half the effort obtain what I have so easily. Why should I share? Would you share with others, who cba to put in the work?

Edited September 2, 2021 by Speed1987

[Kosmin]

1 hour ago, Speed1987 said:

Your response frames MPs as somewhat altruistic.

I didn't make any reference to altruism in my post! I said I think most MPs care more about getting elected than their personal wealth. 

1 hour ago, Speed1987 said:

To some the pay they get is just "Chicken feed"...

Exactly! Johnson gave up £250k, or whatever he was paid by The Telegraph, to get more power. Maybe he didn't just value the power of being MP intrinsically; maybe he also hopes being a PM will increase his long time wealth/income by more than he gave up. 

I'm suggesting that most MPs would be prepared to do the same with regard to their property wealth. If Starmer or any of the shadow cabinet have BTLs, they would be prepared to lose paper wealth because one or both of the following is the case:

(1) Power is more important to them than wealth

(2) They expect the wealth that results from power to exceed this decrease in wealth

[Wayward]

On 01/09/2021 at 17:23, VancouverGuy said:

Meanwhile, anyone with a properly balanced and globally-diversified portfolio of tax-efficient stocks, bonds, REITs and Preferred shares will have seen growth of nearly 30% over the past 12 months, far outpacing that of a 2-bed terrace in Basingstoke.

Yes but unlikely to be leveraged 1:20 like the Basingstoke terrace.

[petetong]

On 01/09/2021 at 17:23, VancouverGuy said:

Meanwhile, anyone with a properly balanced and globally-diversified portfolio of tax-efficient stocks, bonds, REITs and Preferred shares will have seen growth of nearly 30% over the past 12 months, far outpacing that of a 2-bed terrace in Basingstoke.

How many people know how to do that, and do that well ? I for one don't ...

[fuzzy_bear]

10 hours ago, petetong said:

How many people know how to do that, and do that well ? I for one don't ...

Check out MSE forums - lots of very good guidance there

Overall, very straightforward & accessible to virtually anyone with an internet connection

Really hope it's what most of the crashists on here are doing - trying to time any market is too high risk for me personally, trying to time the housing market with everything you've got is insane 

[Clarky Cat]

10 hours ago, petetong said:

How many people know how to do that, and do that well ? I for one don't ...

it's really easy. Whenever people complain that you don't get any money on cash ISA savings I tell them that you can easily get 5% tax free on dividends alone. There's usually grumblings of "it's just gambling", or "it's too complicated". It took me a few hours research to open an account online and get started. 

[bartelbe]

To understand what is going on, look at the tech sector in America. They are creating millionaires by the 1000's, so is this an example of brilliant wealth creation? Nope, the majority of tech companies are loss making, even big names like Tesla have never made a profit in their existence.

Most tech companies exist to create shares, which can be flogged to the market and then the owners cash out as quickly as possible. It is a bubble, really a scam, fueled by cheap money.

The same thing is happening with the UK housing market. Prices are reaching insane levels because of insanely low interest rates. Lots of cheap money looking for a return and you get an inevitable asset bubble.

The moment there is the slightest hint of inflation, which will force incompetent central banks to finally increase interest rates. The party is over. Increased rates mean people who bought with insanely large mortgages won't be able to make their payments, they will face repossessions. The market will be flooded with houses and prices will crash.

[Pmax2020]

4 hours ago, bartelbe said:

Prices are reaching insane levels because of insanely low interest rates. Lots of cheap money looking for a return and you get an inevitable asset bubble.

The moment there is the slightest hint of inflation, which will force incompetent central banks to finally increase interest rates. The party is over. Increased rates mean people who bought with insanely large mortgages won't be able to make their payments, they will face repossessions. The market will be flooded with houses and prices will crash.

This is broadly my take on housing too, but the million dollar question is would Boris let that happen?

The ONS are manipulating the CPI. Meanwhile the Bank of England continue with QE when all it does is fuel inflation. We have a government that would rather pay people to sit in the house right now, than backfill hundreds of thousands jobs in manufacturing, food production, logistics etc.

The Tories will not let prices fall. If the market starts to wobble they’ll probably intervene and guarantee low rates or create flexible mortgages. I could honestly see some bizarre 0% mortgage schemes for FTBs or young families. I wouldn’t put it past them.

[Speed1987]

20 hours ago, Kosmin said:

I didn't make any reference to altruism in my post! I said I think most MPs care more about getting elected than their personal wealth. 

Exactly! Johnson gave up £250k, or whatever he was paid by The Telegraph, to get more power. Maybe he didn't just value the power of being MP intrinsically; maybe he also hopes being a PM will increase his long time wealth/income by more than he gave up. 

I'm suggesting that most MPs would be prepared to do the same with regard to their property wealth. If Starmer or any of the shadow cabinet have BTLs, they would be prepared to lose paper wealth because one or both of the following is the case:

(1) Power is more important to them than wealth

(2) They expect the wealth that results from power to exceed this decrease in wealth

Power and wealth generally, go hand in hand. If they sacrificed their voter base, along with their donors, they wouldn't make it in next time.

I cannot see the overall party agreeing to them making such a move. The rich would be going spare... would never happen.

Plus it wouldn't make any sense either. They'll get more power, making others richer, that's generally their job anyway.

Edited September 3, 2021 by Speed1987

[Timm]

On 02/09/2021 at 10:40, crashmonitor said:

(...)

Seems like you can set your watch by Harrison's 18 year cycle . 2003/ 2021 peak of the booms. Q3 2025 probably when we will begin the bust.

Err, was 2003 the top of the last bubble? 

I thought it was 2007.

7 hours ago, bartelbe said:

(...)

The moment there is the slightest hint of inflation, which will force incompetent central banks to finally increase interest rates. The party is over. Increased rates mean people who bought with insanely large mortgages won't be able to make their payments, they will face repossessions. The market will be flooded with houses and prices will crash.

Plans are afoot to make sure this won't happen.

When rates raise and people get repo'd - the banks will just keep their house and rent it out.

[Kosmin]

9 hours ago, bartelbe said:

To understand what is going on, look at the tech sector in America. They are creating millionaires by the 1000's, so is this an example of brilliant wealth creation? Nope, the majority of tech companies are loss making, even big names like Tesla have never made a profit in their existence.

Most tech companies exist to create shares, which can be flogged to the market and then the owners cash out as quickly as possible. It is a bubble, really a scam, fueled by cheap money.

The same thing is happening with the UK housing market.

I think that is an exaggeration of the state of the tech sector. There are probably some traders who buy shares in companies despite thinking they are overvalued, because they expect buyers to exist at an even more overvalued price!

But most tech companies which are highly valued could become very profitable. Some will never justify their current valuations, but others will.

I have tended to think the biggest worry for tech is antitrust (e.g. splitting up amazon, alphabet, apple, etc.). But I think I probably overestimated the probability of this (similar to the probability of sensible housing policy in the UK perhaps!)

[mitre101]

13 hours ago, bartelbe said:

The same thing is happening with the UK housing market. Prices are reaching insane levels because of insanely low interest rates. Lots of cheap money looking for a return and you get an inevitable asset bubble.

The moment there is the slightest hint of inflation, which will force incompetent central banks to finally increase interest rates. The party is over. Increased rates mean people who bought with insanely large mortgages won't be able to make their payments, they will face repossessions. The market will be flooded with houses and prices will crash.

Long time reader of this forum but never posted.

Think you are wrong in your prediction, there are still several mechanisms the Govt could use to further support house prices:

Cutting stamp duty or raising payment thresholds

Underwriting bank's risk on high LTV mortgages

Forward guidance on interest rates (that they will stay lower for longer), therefore supporting greater loan to income multiples

40, 50 or even 100 year inter-generational mortgage products as seen in Japan

Tax deductibility of principal home mortgage interest and/or capital repayment

etc etc

 

[bartelbe]

On 9/3/2021 at 8:05 PM, Kosmin said:

I think that is an exaggeration of the state of the tech sector. There are probably some traders who buy shares in companies despite thinking they are overvalued, because they expect buyers to exist at an even more overvalued price!

But most tech companies which are highly valued could become very profitable. Some will never justify their current valuations, but others will.

I have tended to think the biggest worry for tech is antitrust (e.g. splitting up amazon, alphabet, apple, etc.). But I think I probably overestimated the probability of this (similar to the probability of sensible housing policy in the UK perhaps!)

 

Sorry but that is a myth. Most techs are loss making and most will never make a profit. Investors are chasing unicorns and con artists are taking advantage of the situation.

[Kosmin]

15 minutes ago, bartelbe said:

 

Sorry but that is a myth. Most techs are loss making and most will never make a profit. Investors are chasing unicorns and con artists are taking advantage of the situation.

You assert that you know the future ("most will never make a profit") and you know why people are buying ("Investors are chasing unicorns").

Furthermore, your conclusion doesn't follow. Even if most never make a profit, it doesn't follow that the tech sector is necessarily overvalued. If a few become sufficiently profitable, they will grow enough to outweigh the rest which fail. 

But you aren't even correct about the recent past:

On 03/09/2021 at 10:05, bartelbe said:

even big names like Tesla have never made a profit in their existence.

Tesla reported a profit of $721m for 2020.

[Jolly Roger]

If we pretend that MPs, ONS, BoE etc. really are malicious actors intending to manipulate the market and wider economy for their own interests, the question I have is how long can they do that until they can't? 5 years? 50 years? Millennia?

There seems to be a sense of inevitability to the doom posting here, which is understandable given the government actions over the last 25 years, but it also implies an omnipotence to human affairs that isn't really borne out by any human civilisation in history.  Yeah they can manipulate the market for longer than you can stay solvent, but the laws of thermodynamics hold, there is no perpetual housing energy machine, heat is being lost somewhere in the system.

[Pmax2020]

21 minutes ago, Jolly Roger said:

If we pretend that MPs, ONS, BoE etc. really are malicious actors intending to manipulate the market and wider economy for their own interests, the question I have is how long can they do that until they can't? 5 years? 50 years? Millennia?

There seems to be a sense of inevitability to the doom posting here, which is understandable given the government actions over the last 25 years, but it also implies an omnipotence to human affairs that isn't really borne out by any human civilisation in history.  Yeah they can manipulate the market for longer than you can stay solvent, but the laws of thermodynamics hold, there is no perpetual housing energy machine, heat is being lost somewhere in the system.

It’ll take as long as it takes for young people to really start asking pertinent questions like ‘what is/was triple lock?’ and ‘why on earth is my retirement are 70?’. And ‘Why did the government print a trillion pounds when everyone knows it leads to inflation?

Why did they offer props to the housing market when it only resulted in record breaking rises? 

I don’t see how we look back on this government in years to come and not find it staggering how badly they managed our economy. 

Hopefully it’ll just be a generational thing. A lot of ageing boomers looking out for number 1 as they near retirement. I think there’s too much inequality between young and old people for the next generation of workers, retirees, economists, mps etc to not seriously question the state of our economy and standard of living.

[petetong]

On 03/09/2021 at 09:07, fuzzy_bear said:

Check out MSE forums - lots of very good guidance there

Overall, very straightforward & accessible to virtually anyone with an internet connection

Really hope it's what most of the crashists on here are doing - trying to time any market is too high risk for me personally, trying to time the housing market with everything you've got is insane 

Thanks for the advice.

[petetong]

On 03/09/2021 at 09:25, Clarky Cat said:

it's really easy. Whenever people complain that you don't get any money on cash ISA savings I tell them that you can easily get 5% tax free on dividends alone. There's usually grumblings of "it's just gambling", or "it's too complicated". It took me a few hours research to open an account online and get started. 

Yep I've looked at eToro, seems to be a good platform. I think for many, me included, it requires a change of mindset to get accustomed to the risk.

[funinhounslow]

2 hours ago, petetong said:

Yep I've looked at eToro, seems to be a good platform. I think for many, me included, it requires a change of mindset to get accustomed to the risk.

You could do an awful lot worse than open an ISA with Vanguard and drip feed into a couple of index trackers every month…