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laurejon

Crash.......what Crash Prices Are Rising

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Given the latest reports out from the RICS it is becoming increasingly obvious to all and sundry that there will most certainly not be a crash this year. Interest rates are forecast to come down, and I am sure that should there be a hicup in the market then the independent Bank of England will get a call from Number 10 to drop rates in order that Blair and Brown can save face and continue with the myth of the miracle economy. You know, the one where money supply is endless and the nation no longer has to work for a living in the world markets as the debt is just added to the slate.

I reckon there is some money to be made this year on a couple of well placed property deals. What are the thoughts of those who have held off from buying for the past three years ?. Surely they must be many tens of thousands down on the deal!!!.

Confirmation that the UK housing market has returned to excellent health has come in the form of the latest survey from the Royal Institution of Chartered Surveyors (Rics).

In the three months to January, house prices rose for the third period in succession and this has provided yet more encouragement to those looking to make gains on property investment this year.

After the tricky summer months during which interest in the property market slumped, the pick-up in confidence has been remarkable and investors are now expecting considerable returns on their projects. After the Bank of England cut interest rates in August, the entire property market received a boost - the effects of which seem to be escalating by the month.

The most positive aspect of this is that the number of people buying a home generally rises by around 80 per cent between January and March and so an acceleration in house price rises is expected before the summer.

Another sign of increased market confidence came in the rising number of people making enquiries about property.

This figure has now increased for eight consecutive months, which represents the longest period of sustained increases since Rics began its survey back in 1978.

Crucially, the rising enquiries corresponded with an increase in completed sales in January, which is not always the case. A less pronounced rise in confidence can sometimes only translate into a culture of browsing, but the number of completed transactions in January was 15 per cent higher than it was a year earlier.

In all, the number of surveyors reporting rising house prices was nine per cent higher than the number seeing prices falling in the three months to January. Ian Perry, a spokesperson for Rics, has reflected that conditions are now particularly healthy for sellers.

"After months of struggling, the housing market is picking up," said Mr Perry.

"The current dynamics are favourable to sellers as the amount of property available to buyers remains limited," he added.

"Reasonably priced properties are selling well. December and January are traditionally quiet months so the spring, when more people look to move, appears promising."

The Rics report also found that the number of properties coming onto the market edged up in January while overall consumer confidence was up from the previous month.

The assessment matches that of propertyfinder.com, which announced this week that 1.1 million Britons were looking for a property last month. An increase of 30 per cent since August 2005, it clearly indicates that the market has enjoyed an astonishing turnaround in the last few months, while a continuation of the trend is generally anticipated for the remainder of the year.

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Given the latest reports out from the RICS it is becoming increasingly obvious to all and sundry that there will most certainly not be a crash this year. Interest rates are forecast to come down, and I am sure that should there be a hicup in the market then the independent Bank of England will get a call from Number 10 to drop rates in order that Blair and Brown can save face and continue with the myth of the miracle economy. You know, the one where money supply is endless and the nation no longer has to work for a living in the world markets as the debt is just added to the slate.

I reckon there is some money to be made this year on a couple of well placed property deals. What are the thoughts of those who have held off from buying for the past three years ?. Surely they must be many tens of thousands down on the deal!!!.

Confirmation that the UK housing market has returned to excellent health has come in the form of the latest survey from the Royal Institution of Chartered Surveyors (Rics).

In the three months to January, house prices rose for the third period in succession and this has provided yet more encouragement to those looking to make gains on property investment this year.

After the tricky summer months during which interest in the property market slumped, the pick-up in confidence has been remarkable and investors are now expecting considerable returns on their projects. After the Bank of England cut interest rates in August, the entire property market received a boost - the effects of which seem to be escalating by the month.

The most positive aspect of this is that the number of people buying a home generally rises by around 80 per cent between January and March and so an acceleration in house price rises is expected before the summer.

Another sign of increased market confidence came in the rising number of people making enquiries about property.

This figure has now increased for eight consecutive months, which represents the longest period of sustained increases since Rics began its survey back in 1978.

Crucially, the rising enquiries corresponded with an increase in completed sales in January, which is not always the case. A less pronounced rise in confidence can sometimes only translate into a culture of browsing, but the number of completed transactions in January was 15 per cent higher than it was a year earlier.

In all, the number of surveyors reporting rising house prices was nine per cent higher than the number seeing prices falling in the three months to January. Ian Perry, a spokesperson for Rics, has reflected that conditions are now particularly healthy for sellers.

"After months of struggling, the housing market is picking up," said Mr Perry.

"The current dynamics are favourable to sellers as the amount of property available to buyers remains limited," he added.

"Reasonably priced properties are selling well. December and January are traditionally quiet months so the spring, when more people look to move, appears promising."

The Rics report also found that the number of properties coming onto the market edged up in January while overall consumer confidence was up from the previous month.

The assessment matches that of propertyfinder.com, which announced this week that 1.1 million Britons were looking for a property last month. An increase of 30 per cent since August 2005, it clearly indicates that the market has enjoyed an astonishing turnaround in the last few months, while a continuation of the trend is generally anticipated for the remainder of the year.

Hi Laurejon,

I didn't know you were online, hope you still are.

From your posts I understand that you believe a potential HPC will not arrive until 2007. Could you tell me more about your thinking and what you are doing to prepare (or what should be done)?

Thanks.

Classixuk.

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My thinking goes like this.

In Yr 2000 property had risen some 100% since 1995.

On that basis and given that I am of the old school of thought (no miracle economies for me) there is a seven year economic cycle.

Now had September 11th not happened then I think interest rates would as usual been used to dampen the market. And I am sure that prices would have been far more subdued.

So in 1995 you could buy a two bed terrace for around 50K, in those days I earnt 80 quid a day. Today that same job would earn around 125 quid a day, yet the house would be in the region of 250k.

I reckon we skipped a recession by borrowing, both by the population and by the Government. If the Tories had been in power there is no way they would have allowed the massive trade deficits, and government borrowing we see today!!! and I would say the Tories were the masters of economics.

So 2007 has to be the year of high interest rates, and a crash in the latter part of the year. Rock bottom will be in 2014 rising up again for another seven years.

I dont think I would be brave enough to buy today, but I can see the attraction for those who have nothing to lose. Money is around, and interest rates are dirt cheap. To buy a bread and butter property at auction and turn it over quick smart after a little bit of TLC will for sure return a reasonable profit but you have to be quick and you have to do the work yourself. Building work is currently paying a premium in most areas so getting labour is difficult and costly.

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I dont think I would be brave enough to buy today, but I can see the attraction for those who have nothing to lose. Money is around, and interest rates are dirt cheap. To buy a bread and butter property at auction and turn it over quick smart after a little bit of TLC will for sure return a reasonable profit but you have to be quick and you have to do the work yourself. Building work is currently paying a premium in most areas so getting labour is difficult and costly.

I went to Romans' (local EA) property auction last week - just out of curiousity.

The first thing that astonished me was the number of people in the room - I would say at least 400 (it was held at a local golf club and you had to park half a mile from the room and get a lift on a golf buggy).

The second thing that amazed me was the lack of bidding. Everything sold (that I stayed for) and there were some 'bread and butter' properties - 2 and 3 bed run-down terraces in the seedier bits of Reading etc. Getting the bidding started on each lot was painful (despite the huge numbers there) but when it did get going there were just enough nutters to bid the property up to a price that leaves no room for profit.

I have been to quite a lot of auctions - seems like a mug's game to me. With so many people interested in property and desperate to make a few bob, sensible prices are out the window. I watched a couple of properties reach a price where you thought 'okay, few months work and 10k invested would get you maybe 30k profit' - only for some moron to come in and bid the price up another 25k. It was for amateurs only. I always walk away from auctions thinking 'the seller just made the profit on that house - the buyer will work their nuts off for 6 months for nothing.' Only one worth having was a big 5 bed older detached place on 1/3rd of an acre that sold for £440k. With 100k spent on it - it would be worth £700k

Anyway, my point is that, despite the recent downturn/stagnation (call it what you like) over the last couple of years - half the population still thinks there is easy money in property. So, no bargains at auction - the exact opposite in fact.

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So 2007 has to be the year of high interest rates, and a crash in the latter part of the year.

I can't believe laurejon talking about crashes!

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My thinking goes like this.

In Yr 2000 property had risen some 100% since 1995.

On that basis and given that I am of the old school of thought (no miracle economies for me) there is a seven year economic cycle.

Now had September 11th not happened then I think interest rates would as usual been used to dampen the market. And I am sure that prices would have been far more subdued.

So in 1995 you could buy a two bed terrace for around 50K, in those days I earnt 80 quid a day. Today that same job would earn around 125 quid a day, yet the house would be in the region of 250k.

I reckon we skipped a recession by borrowing, both by the population and by the Government. If the Tories had been in power there is no way they would have allowed the massive trade deficits, and government borrowing we see today!!! and I would say the Tories were the masters of economics.

So 2007 has to be the year of high interest rates, and a crash in the latter part of the year. Rock bottom will be in 2014 rising up again for another seven years.

I dont think I would be brave enough to buy today, but I can see the attraction for those who have nothing to lose. Money is around, and interest rates are dirt cheap. To buy a bread and butter property at auction and turn it over quick smart after a little bit of TLC will for sure return a reasonable profit but you have to be quick and you have to do the work yourself. Building work is currently paying a premium in most areas so getting labour is difficult and costly.

bang on! agreed

sometimes you see something short and simple and you just know it makes sense

Edited by edshb5

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Thanks Laurejon.

Your post makes a lot of sense.

What does the economic climate hold for 2006 in your opinion? For instance, what do you feel is going on with a lot of companies either going into administration or reporting very poor sales? How long before we see this translating into major job losses etc? Also, how do you envisage the correction? Will it be hidden by rapid inflation or will we see nominal falls, if so, how much by?

Thanks.

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When bullish arguments are mentioned saying the market is rising, I just have to look on rightmove and I can easily find properties being advertised at the same level or less than 2004 in my area (Hampshire). Also, virtually all the HPI indices are showing falls in 2005 for Hampshire.

I have certainly not missed the boat.

The problem is I doubt it would crash until there is a shock, or the BTL start to run. A shock could easily come from a IR rise (+25base points should do it), unemployment or negative GDP growth (which looks like it is a possibility).

But if any of the VIs show a YoY fall I think the BTL crowd will start to sell up. By autumn i think we might get this. And the 'proper' crash might start.

Hopefully, all the rising areas like Northern Ireland should slow which is currently keeping the HPI data positive.

I think 2006 will turn out be a worse year for the property market than 2005!

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I can't believe laurejon talking about crashes!

Another bull turncoat? This is indeed an indicator of the end game.

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I would not describe myself as a turncoat, in fact I am sure you will find my posts consitant with my views as they stretch back some years on this forum.

Thanks Laurejon.

Your post makes a lot of sense.

What does the economic climate hold for 2006 in your opinion? For instance, what do you feel is going on with a lot of companies either going into administration or reporting very poor sales? How long before we see this translating into major job losses etc? Also, how do you envisage the correction? Will it be hidden by rapid inflation or will we see nominal falls, if so, how much by?

Thanks.

In my opinion 2006 will end the year end with IR's much the same. However trade figures will in my opinion become a political hot potato as the tabloids wake up to the importance of it all and start to report with unbiased opinions. Early 2007 will be the old tell tale signs with a credit squeeze by the banks who will be shaking in their boots when they step back and take a look at the loan books.

2006 will end with an additional 1M unemployed however the real cost will be that well paid jobs will be replaced with low payed low skilled jobs. This will have a direct impact on the Chancellors revenue and some panic taxes will be applied in April 2007. This will be the catalyst that really sets the place on fire. The BOE will be pressured both internally and internationlly to push us rates to stem inflation which will inevitebly be running at a 15yr high. I suspect that the cat will be out of the bag and the transition from Blair to Brown will be too late for most of the electorate as they wake up to the realisation that New Labour has in fact gone back to grass roots and really stuffed the country up.

A war with Iran in 2007 will not generate "The Falklands Factor" and this will cause huge international problems that will make the Labours parties position untennable.

Bleak Picture indeed, but I would put your money on it :-)

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Guest wrongmove

I would not describe myself as a turncoat, in fact I am sure you will find my posts consitant with my views as they stretch back some years on this forum.

In my opinion 2006 will end the year end with IR's much the same. However trade figures will in my opinion become a political hot potato as the tabloids wake up to the importance of it all and start to report with unbiased opinions. Early 2007 will be the old tell tale signs with a credit squeeze by the banks who will be shaking in their boots when they step back and take a look at the loan books.

2006 will end with an additional 1M unemployed however the real cost will be that well paid jobs will be replaced with low payed low skilled jobs. This will have a direct impact on the Chancellors revenue and some panic taxes will be applied in April 2007. This will be the catalyst that really sets the place on fire. The BOE will be pressured both internally and internationlly to push us rates to stem inflation which will inevitebly be running at a 15yr high. I suspect that the cat will be out of the bag and the transition from Blair to Brown will be too late for most of the electorate as they wake up to the realisation that New Labour has in fact gone back to grass roots and really stuffed the country up.

A war with Iran in 2007 will not generate "The Falklands Factor" and this will cause huge international problems that will make the Labours parties position untennable.

Bleak Picture indeed, but I would put your money on it :-)

So you reckon a 5x 110% IO mortgage on an off-plan 2 bed new build flat might not be "idea of the year" then ?

:lol:

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Guest muttley

In my opinion 2006 will end the year end with IR's much the same. However trade figures will in my opinion become a political hot potato as the tabloids wake up to the importance of it all and start to report with unbiased opinions. Early 2007 will be the old tell tale signs with a credit squeeze by the banks who will be shaking in their boots when they step back and take a look at the loan books.

2006 will end with an additional 1M unemployed however the real cost will be that well paid jobs will be replaced with low payed low skilled jobs. This will have a direct impact on the Chancellors revenue and some panic taxes will be applied in April 2007. This will be the catalyst that really sets the place on fire. The BOE will be pressured both internally and internationlly to push us rates to stem inflation which will inevitebly be running at a 15yr high. I suspect that the cat will be out of the bag and the transition from Blair to Brown will be too late for most of the electorate as they wake up to the realisation that New Labour has in fact gone back to grass roots and really stuffed the country up.

A war with Iran in 2007 will not generate "The Falklands Factor" and this will cause huge international problems that will make the Labours parties position untennable.

Bleak Picture indeed, but I would put your money on it :-)

Wow,that's very specific!! If you're right then I will nominate you for a Nostradamus award.

(Who's going to win The Derby?)

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"Confirmation that the UK housing market has returned to excellent health has come in the form of the latest survey from the Royal Institution of Chartered Surveyors (Rics)."

Whose survival depends on err? mmm... Ahemmm...

What a crock of S-H-I-T-E!!!!

At least your consistent...

VI's say all is well in La La Land...... :lol::lol::lol:

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Confirmation comes from the land registry. In terms of Volumes we are sailing a steady path!!!.

In my neck of the woods on the South Coast I have seen For Sale boards followed a couple of weeks later by a sold board.

I think it has returned to a market whereby low offers are no longer being accepted off the cuff. The market is currently looking quite healthy.

Obviously this will not last much past the summer as I just cannot see how on earth people are affording them. I guess many people sitting on properties purchased in 95 with a measly 40k mortgage are thinking of joining the rest of people and upgrading to something costing 100k more and taking on an average new mortgage of around 140k. That fact that I think they are foolish is of no consilation they will continue to fan the flames of inflation around the marketplace and stimulate the economy to a certain degree with thier actions.

Payday will come in the shape of high interest rates that are merely a slip away from becoming a reality. The pressure is on the get tidied up with the personal borrowing and button the hatches cos when it comes the bloodbath is going to be a sorry sight.

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I only hope Laurejon's predictions are right but suspect what he's predicting in 2007 may take a year or two longer to materialise.............

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Last quarter of 2007 is my prediction, and lets not forget that is the begining. Last recession didnt happen overnight, it took a couple of years before it really hit home hard affecting every household.

They usually start off with just a few people being hit, and others watching on said "Serves them right, they were asking for it with all those debts" but as time went on more and more people became victims of the interest rate vice grip.

And forget about not having any personal debt, it costs money to live and if you dont have a job with all the will in the world you will go under.

There is no way this government have the funds to borrow to pay millions to sit at home, they have exhausted all the coffers, their credit limit is met, they are up against the wall today having just had the best years of potential economic activity we will see in two decades.

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In my opinion 2006 will end the year end with IR's much the same. However trade figures will in my opinion become a political hot potato as the tabloids wake up to the importance of it all and start to report with unbiased opinions. Early 2007 will be the old tell tale signs with a credit squeeze by the banks who will be shaking in their boots when they step back and take a look at the loan books.

I would interpret that as a 'SELL WHILE YOU CAN' recommendation to any BTL Landlord, especially if highly geared.

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I guess many people sitting on properties purchased in 95 with a measly 40k mortgage are thinking of joining the rest of people and upgrading to something costing 100k more and taking on an average new mortgage of around 140k.

The problem with that analysis, Laurejon, is that some new FTB probably needs to be able to afford his property, or something in the chain.

Affordability is a problem for the market, regardless of whether your mythical buyer has a low mortgage.

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Confirmation comes from the land registry. In terms of Volumes we are sailing a steady path!!!.

In my neck of the woods on the South Coast I have seen For Sale boards followed a couple of weeks later by a sold board.

I think it has returned to a market whereby low offers are no longer being accepted off the cuff. The market is currently looking quite healthy.

Obviously this will not last much past the summer as I just cannot see how on earth people are affording them. I guess many people sitting on properties purchased in 95 with a measly 40k mortgage are thinking of joining the rest of people and upgrading to something costing 100k more and taking on an average new mortgage of around 140k. That fact that I think they are foolish is of no consilation they will continue to fan the flames of inflation around the marketplace and stimulate the economy to a certain degree with thier actions.

Payday will come in the shape of high interest rates that are merely a slip away from becoming a reality. The pressure is on the get tidied up with the personal borrowing and button the hatches cos when it comes the bloodbath is going to be a sorry sight.

Well, Well Old Laurejohn is back and has promted me out of the lurking to reply!

I would have to say that I agree wholeheartedly (never thought I would say that).

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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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