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halip66

Sentiment

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Been a lurker here for years so hello to everyone & thanks for all the entertainment & time wasting opportunities you have given me. In return here's a post..

From watching the property market for about the last 10 years the only things I have seen effect prices are IR & sentiment. Can't really comment on what IRs are going to do but something clicked recently in my head on the subject of sentiment. Which I think may go some way to explaining what’s going on at the moment.

Just been reading a post on the C4 forum about the rightmove figures for this month it said something like "this is the only year in the past 2 where it is widely believed that a crash will not occur". What has become obvious to me is, we, on this forum, don't share the same sentiment about property as 90% of the rest of the country. This is highlighted by the regular arguments with family & friends about house prices dropping etc.. If as the article says over the last 2 years there has been a fear about a HPC & this has now largely gone away for the general public, or for some of them at least, then this represents a fairly major shift in sentiment towards the positive. Although I would think most people still have nagging doubts in the backs of their minds about a crash.

I have been trying to explain away the recent upturn to myself & this is the only reason I can come up with. That because houses haven't crashed over the last 2 years then they wont crash this year so buy now suckers before it's too late... Hence it's boom time again..

As has been said on this forum many times a HPC takes years to come about, it's not a 50% drop in one month thing but that seems to be the perception of most people (including me until I started coming here.) Last years monthly price drops won’t be seen as anything to worry about by the majority of people.

So a few people who can afford it (there can't be many of them left) will get sucked in & buy at the wrong/worst time & come the spring/summer we will be back to stagnation. Except this time without all the people who couldn't make their minds up whether there was going to be a crash or not. Leading to a much worse period of stagnation/falls than last year.....and so on and so so....

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Hmmm.

So prices will always rise because it's a self fulfilling prophecy?

Not entirely true. They can in theory stagnate at the absolute brink of affordability.

But if nobody can afford to buy, then nobody can afford to buy.

The main reason I believe they will have to come down is because people in this country will become poorer over the coming two or three years.

If interest rates go down, maybe below the Fed, sterling will take a big hit. Since we are a net importer, we will see inflation accelerated by currency exchanges.

If rates go up people in debt will see their repayments go up.

The group best protected from rate movements are those in the green with widespread investments.

Since the BoE is charged with controlling inflation, I think it would be very foolish for them to lower rates.

Those in debt are facing a rate rise. Keep an eye on the Federal Reserve, the UK may be able to afford a weaker pound over summer. But as soon as next winter comes and our gas imports reach an all time record high we will require a strong pound, else those tankers might all head for Spain and the US again.

A weaker pound nine or ten months from now could hurt the UK quite a lot.

The only reason BG is offering a locked in gas price for the next three years, is because they believe the pound will not be allowed to weaken ahead of next winter.

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http://www.alexa.com/data/details/traffic_...ricecrash.co.uk

what people type into google is a good indicator of sentiment, january saw a boom in the people searching for 'house price crash' in google

IMO the graph shows a fall in 'crash sentiment' in the run up to SIPPS u turn, after the uturn people started thinking more about the crash, the rises and falls in the popularity of this site, seem to invesly match the wobbles in the housing market and sentiment.

Edited by moosetea

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"this is the only year in the past 2 where it is widely believed that a crash will not occur". What has become obvious to me is, we, on this forum, don't share the same sentiment about property as 90% of the rest of the country. This is highlighted by the regular arguments with family & friends

Hmmm... I am not sure. If you get shot down in flames, you have found a raw nerve.

I was thinking just this morning that seven years ago there was no man who stood up and told me that there will be this housing boom doubling prices. This includes all family and all friends.

So, I'm not prepared to believe anyone who now just says there will be no crash.

Of course, I don't believe anyone who says there WILL be a crash, I'm looking at the reports of what is going on, collecting factual information from the 'noise' on this site, and making a decision.

What is the market saying now? What was it saying last year? The year before?

What is the debt situation?

What is the salary rise situation?

Have house prices ever been above 5 times salary before? What happened?

Is it sensible to just compare prices over the years?

Do recessions appear to be related to housing booms?

Has there been any government interference in this market place?

How is this is the same as history?

How does this time differ?

Who are the buyers in this market place, what are their motives?

What barriers-to-entry exist for new entrants?

How is house purchase typically financed? What would change this?

These questions are why this site has been useful. NOT because this is a house price "Crash" site!

Some of my friends are fine about the situation, they are home owners, but are perplexed as anyone by what's just happened. Other "friends" are cocky smartasses who think they know it all, and now want to up-size the house at the top of a 6x boom, not realising that they are poorer because of all this.

Interesting times.

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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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