Very Bullish Headlines Today

[pricedout]

Although I've been praying for a crash for years it certainly isn't happening round here at present.

A friend put his tiny flat on the market (Bath) a few days ago and has sold for 2K below asking price of £180K - FTBs supported by parents - so green the EA has them into to disclose all about their finances with their motgage advisor prior to them seeing the place. NOBS!

I think a correction will eventually happen, but ther VIs have lots more tricks up their sleeves to keep it all going, coupled with the pent up demand, nieve FTBs, rumours that IR will go down and prices will rise fast again - the office is full of it.

I've tested the water for some properties and price reductions seem to be off at the moment.

It's a sorry state alright and It looks like I'll be pricedout for a good while yet.

Still made a major milestone with the deposit this month, I'm sure my turn will come, there are winners and losers at every stage of the market and I am sure it will eventually turn, but can I wait that long?

I feel sick to my stomach just thinking about it.

Shit shit shit shit - f'ing shit.

[By-Tor]

Without a stimulus or a major event the housing market will creep up/down dependant upon where you are looking.

Any talk of a crash because of the massive debt burdon is not really going to cut much ice, this debt has built up over a period of years. In the main most people who have built up debt haven't said one day, "think i will borrow £35K" then realised the following day they cannot afford it and get their house repossessed.

For there to be a correction we need a stimulus. We can see quite clearly several possible things that may provide this stimulus, most of which are interelated, Interest rates, inflation, energy costs. But looking further down this route each of these again, just like the debt burden are just the fuel for the fire. Its what causes these to rise is what we are waiting for.

Energy prices have suffered due to hurricaines, Irans posturing, war in Iraq as well as other tinderbox's. We just need one major spark and the whole lot will go up, now it may not be energy prices, it may be another 9/11 on an even bigger scale maybe, or some other unforseen event.

Until it happens we will simply be in limbo with the market being shoved by the VI's (whether right or wrong) and not a lot of change.

But then again I could just be talking a load of cobblers and we have to raise our IR's along with everyone else and whoosh there goes the house of cards. Fortune telling is such guesswork eh. Whichever way I hope it just gets on with it because the missus is getting impatient to move.

[Yankee]

Perhaps people are buying so they can lock in a mortgage before interest rates rise again.

And rates are going to have to rise in Britain, given what's going to soon happen in Japan and the U.S. That means, of course, that house prices will fall.

I wouldn't buy in Britain (or anywhere) right now. The fundamentals are way, way too scary.

I smell a dead cat (bounce).

[shermanator]

Although I've been praying for a crash for years it certainly isn't happening round here at present.

A friend put his tiny flat on the market (Bath) a few days ago and has sold for 2K below asking price of £180K - FTBs supported by parents - so green the EA has them into to disclose all about their finances with their motgage advisor prior to them seeing the place. NOBS!

I think a correction will eventually happen, but ther VIs have lots more tricks up their sleeves to keep it all going, coupled with the pent up demand, nieve FTBs, rumours that IR will go down and prices will rise fast again - the office is full of it.

I've tested the water for some properties and price reductions seem to be off at the moment.

It's a sorry state alright and It looks like I'll be pricedout for a good while yet.

Still made a major milestone with the deposit this month, I'm sure my turn will come, there are winners and losers at every stage of the market and I am sure it will eventually turn, but can I wait that long?

I feel sick to my stomach just thinking about it.

Shit shit shit shit - f'ing shit.

Good lord, why is everyone here getting jittery?

HPI is now 0% from over 20% less than two years ago. It's all going pretty much to plan

1. Slowdown

2. Plateau

3. Edge Down

4. sucker's rally (we're here now).

So long as I've got a roof over my head, I'm alright. Is it any less of a roof because it's rented? No, in fact it's better because I'm saving, have a better apartment and the price is falling.

Interest rates are on their way up and it'll only need a little tightening to screw the indebted.

[beenhearingthisforyears]

This is typical of most people using this site anyway...not allowing a positive/favourable opinion on the housing market.

I wonder why 'hearing this for years' is surprised...

Anyway, I do agree that the market is not showing any signs of collapsing in london...and is not likely to unless the interest rates go up bu at least 1-2% (i.e., at least another couple of years)

not surprised in the least.....but just find it strange that a major news story that dominated HPC's news blog ALL day is not deemed worthy of discussion.

the bbc just had a programme about Russian investment in london......so lets blame the Russians......

Edited February 27, 2006 by beenhearingthisforyears

[pricedout]

Shermanator

I think you are probably right - some days I get so frustrated with all this, and this is one of them - I'm not after a mansion just something half decent at a price that won't cripple us

I am glad I found this site - everyone that I know are disciples of the great "they only ever go up " mantra, even those old enough to remember the last crash. -

I sometimes feel that commom sense has evaportaed in the UK and been replaced by something trivial, superficial, akin to the X factor or some other such crap.

Headline - Somerset Man's Head explodes due to HPC.

Cheers PO

[optimist]

Good lord, why is everyone here getting jittery?

HPI is now 0% from over 20% less than two years ago. It's all going pretty much to plan

1. Slowdown

2. Plateau

3. Edge Down

4. sucker's rally (we're here now).

So long as I've got a roof over my head, I'm alright. Is it any less of a roof because it's rented? No, in fact it's better because I'm saving, have a better apartment and the price is falling.

Interest rates are on their way up and it'll only need a little tightening to screw the indebted.

The reason why some people are getting jittery is simple..

...the longer it takes for this process (1. Slowdown, 2. Plateau, 3. Edge Down, 4. Sucker's rally, etc) to pan out, the longer a lot of the wannabee FTBs are paying their rents, and longer they are delayingg starting their mortgage.

If that is not clear in itself, please let me put it in numbers..

..If you are renting a place right now (and feeling rather smug about paying 'only' 4% rental yeild to the landlord), you need a 4% per year decline in property value to compensate for that lost rent. So if this process that you describe takes say 4 -5 years (well, it is already long due since 2003 accoring to some users of this website), then you need a 20% fall in property prices to compensate.

I am not too sure you are going to see property price falls of that magnitude unless there is a massive trigger (and I can't foresee one)

[undersupply]

..If you are renting a place right now (and feeling rather smug about paying 'only' 4% rental yeild to the landlord), you need a 4% per year decline in property value to compensate for that lost rent.

Keep it coming

Lost rent

Please give me an example whereby I buy an average London house 300k, rather than rent one valued at 300k today, but bought for 200k.

I know youre good at maths

Do you have a way of stopping me lose lost car and lost food and lost holidays?

An optomist says the glass is half fullof water

Undersupply says the glass is half full of air (Backslap, cheers, hurrah, go HPC hoo-ray, yee-haw!)

[SeenItAllBefore]

Anyone surprised by these very bullish headlines and the supposed strength of the market in the South at this time?

And i know some of you will say 'how can there be any buyers. No one can afford these prices"

Yet, even on this forum, many members speak of family/friends/acquaintances who are buying....even though members may have expressed their bearish concerns. People are getting mortgages and they are still buying it appears.

You wait until the “Interest Rates Set To Rise” headlines start to hit the press, and they surely will if HPI starts increasing again. This “revival”, if that is indeed what’s happening, will be dead in the water before you can blink. Our “debt-junkie” economy has gone far too far this time for there to be a soft landing from the excesses of the last few years – serious economic problems and a housing market crash are a 100% certainty now. You can find as many ways as you like to deny this inevitability but sorry, you won’t stop it from happening in the end.

[Red Baron]

If you are renting a place right now (and feeling rather smug about paying 'only' 4% rental yeild to the landlord), you need a 4% per year decline in property value to compensate for that lost rent.

Optimist

This is a specious argument; you really need to read up on opportunity cost.

Housing has a cost whether you rent or own. Even if you own a house mortgage-free it still costs you to live there because you lose the income you might have derived by investing the money locked up in the house; this is the so called 'opportunity cost' of the investment in that property.

Renting is not 'dead money' if one can rent more cheaply than the opportunity costs associated with buying, particularly when property prices are stagnant or falling (as now). If property prices fell 4% in a year the notional gain by the renter, for deferring purchase, is very much a 'real' gain.

[munro]

and now the pathetic back slapping......the bully girls will be out next to threaten and abuse...........zzzzzzzzzzzzz

You big girl's blouse, you.

[optimist]

Keep it coming

Lost rent

Please give me an example whereby I buy an average London house 300k, rather than rent one valued at 300k today, but bought for 200k.

I know youre good at maths

Do you have a way of stopping me lose lost car and lost food and lost holidays?

An optomist says the glass is half fullof water

Undersupply says the glass is half full of air (Backslap, cheers, hurrah, go HPC hoo-ray, yee-haw!)

I am pleased that some frustrated people have at least this forum to jerk off and get some cheap laughs...

...no seriously, if you can get a £300 K property (at today's prices) for £200 K EVER in the future, i shall eat my hat.

It ain't going to happen mate...so stop deluding yourselves. Even in the great '90s crash (with IRs of 15%), the nominal price falls weren't as great as that.

[undersupply]

I am pleased that some frustrated people have at least this forum to jerk off and get some cheap laughs...

...no seriously, if you can get a £300 K property (at today's prices) for £200 K EVER in the future, i shall eat my hat.

It ain't going to happen mate...so stop deluding yourselves. Even in the great '90s crash (with IRs of 15%), the nominal price falls weren't as great as that.

Do you really not understand?

The difference between the amount of rent you pay each month living in a 300k property and a 100% repayment mortgage on a 300k property is a SAVING not aLOSS

Edited February 27, 2006 by undersupply

[SeenItAllBefore]

I am pleased that some frustrated people have at least this forum to jerk off and get some cheap laughs...

...no seriously, if you can get a £300 K property (at today's prices) for £200 K EVER in the future, i shall eat my hat.

It ain't going to happen mate...so stop deluding yourselves. Even in the great '90s crash (with IRs of 15%), the nominal price falls weren't as great as that.

There were people sitting on nominal falls of 30-40% all over London and the South-East last time. If you’re trying to deny this you’re the one who should stop deluding yourself.

[Guest Winners and Losers]

There were people sitting on nominal falls of 30-40% all over London and the South-East last time. If you’re trying to deny this you’re the one who should stop deluding yourself.

SeenItAllBefore - I am LOVING you!

[optimist]

There were people sitting on nominal falls of 30-40% all over London and the South-East last time. If you’re trying to deny this you’re the one who should stop deluding yourself.

Another thing I suppose we should do on this website is to seperate the discussions on the London property market from those from elsewhere. I do feel that they are somewhat different from each other (and in fact have seldom correlated with each other temporally). I for once could perhaps offer a reasonably informed opinion about the London market but have very little knowledge of say the west midlands or similar. There are several reasons why I think London's market is likely to outperform that of the rest of the country for the next few (5-10) years:

1. Net international migration underpinning rental demand (and hence at the very least) price levels due to invester demand

1. The disproportionate representation of the financial sector

2. the relative recent underperformance vis a vis the rest of the country

3. the international wealth that seems to find a 'safe haven' in the UK bricks and mortar

4. the various massive regeneration projects planned/ underway (Olympics, Kings Cross etc.)

In fact, this dichotomy in the behaviour of the two markets has already been mentioned in today's Hometrack report, amongst others

[rollercoaster]

I thought that the BoE had previously stated that thair aim was the inflation targets and not the housing market..... I'm surprised that the papers are now sayin that an interest rate cut is less likley not the housing market is increasing...

I'm pretty sure that the BoE couldn't really care about house prices on the way up - i just wonder if they'll be as inactive when (if) they ever drop!

[shermanator]

The reason why some people are getting jittery is simple..

...the longer it takes for this process (1. Slowdown, 2. Plateau, 3. Edge Down, 4. Sucker's rally, etc) to pan out, the longer a lot of the wannabee FTBs are paying their rents, and longer they are delayingg starting their mortgage.

If that is not clear in itself, please let me put it in numbers..

..If you are renting a place right now (and feeling rather smug about paying 'only' 4% rental yeild to the landlord), you need a 4% per year decline in property value to compensate for that lost rent. So if this process that you describe takes say 4 -5 years (well, it is already long due since 2003 accoring to some users of this website), then you need a 20% fall in property prices to compensate.

I am not too sure you are going to see property price falls of that magnitude unless there is a massive trigger (and I can't foresee one)

What's a mortgage then? Isn't interest 'dead money'? Basically with a mortgage you buy your house twice, do you not?

Your argument would only make sense if I had 300k in my back pocket and didn't require a mortgage, which I don't. And even then by about 2010 I'd be sitting on a huge nominal loss.

Question - by c.2010 who'll be better off. Me having saved a wedge of money by renting, don't owe a bean to anyone and made a few quid from investments OR the muppets piling into the market now, mortgaged up to the hilt, crippled by debt, and at the mercy of higher IRs?

Yes, that was a rhetorical question.

[Guest Charlie The Tramp]

The properties on my estate known as a popular and desirable area.

1988 selling for 80k

1990 selling for 120k

1994 selling for 86k

2000 selling for 109k

2002 selling for 120k

2004 selling for 249k

2005 sellng for 234k

2006 one just sold for 234k

1992 to 1995 brought five repossessions.

[undersupply]

The properties on my estate known as a popular and desirable area.

1988 selling for 80k

1990 selling for 120k

1994 selling for 86k

2000 selling for 109k

2002 selling for 120k

2004 selling for 249k

2005 sellng for 234k

2006 one just sold for 234k

1992 to 1995 brought five repossessions.

Surely you don't mean house prices didn't rise for 12 years

Can't happen this time tho cos the papers said so, and de limpics r cumin

[Guest Charlie The Tramp]

Surely you don't mean house prices didn't rise for 12 years

Can't happen this time tho cos the papers said so, and de limpics r cumin

My point is it took 12 years after they fell to return to their 1990 prices.

[Without_a_Paddle]

Question - by c.2010 who'll be better off. Me having saved a wedge of money by renting, don't owe a bean to anyone and made a few quid from investments OR the muppets piling into the market now, mortgaged up to the hilt, crippled by debt, and at the mercy of higher IRs?

You sound very confident.

Your plan may unravel if the govt decide to devalue the £ to get the economy out of any future difficulties.

This what often happens following an economic downturn. The devaluation brings inflation.

Therefore nominal house price falls may be minimal, in fact house prices may be higher in 2010 due to general inflation.

Interest rates WILL end up higher if this devaluation happens.

Compare this to the 2006 buyer who bought with a 10year fixed loan at 4.69% rate.

You could be faced with a 25 year loan at >6% rates in 2010 and a similar purchase price.

The 2006 buyer will end their (smaller?) mortgage 4 years sooner than you. They will spend 4 more years in their property than you. They will be paying less per month than you in 2010 due to the fixed rate.

We have had loads of economic downturns in the last 40 years ... and loads of devaluations of the £.

I assume you have thought of this alternative scenario and ruled it out as impossible.

Edited February 27, 2006 by Without_a_Paddle

[Guest Winners and Losers]

Have you been lurking WAP? I'm watching you...

[Waitingstill]

Even in the great '90s crash (with IRs of 15%), the nominal price falls weren't as great as that.

Werent they???

My flat in London bought at £72,000 with the prices already on the way down went down to £46,000 and took 10 years to go back up to £72,000 again...! Nah, not a great fall at all!!

Edited February 27, 2006 by Waitingstill

[Guest Winners and Losers]

Werent they???

My flat in London bought at £72,000 with the prices already on the way down went down to £46,000 and took 10 years to go back up to £72,000 again...!

I have posted before how I bought a flat in London in 1997. The vendor had owned it since 1988 and was still in negative equity when they sold it to me! Don't believe that it could never happen again.